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A Quarterly Magazine on Banking and Finance

Contents January - March 2015

volume 01 n issue 01

BFSI 26 Mohan Tanksale Chief Executive, Indian Banks’ Association

28 S K Roy Chairman, Life Insurance Corporation of India

30 Sushil Muhnot Chairman and Managing Director, Bank of Maharashtra

Banking the Unbanked – Economic Empowerment to Every Citizen

34 Ashish Kumar Chauhan MD & CEO, Bombay Stock Exchange (BSE)

36 K Venkataraman

government

Managing Director & Chief Executive Officer of KVB

38 C V R Rajendran Chairman & Managing Director, Andhra Bank

14 K P Bakshi Additional Chief Secretary, Department of Home, Government of Maharashtra

40 Bhargav Dasgupta MD & CEO, ICICI Lombard General Insurance Co Ltd.

42 N Jambunathan Deputy Managing Director and Chief Information Officer, SBI

44 Subrata Gupta Chief General Manager, NABARD

17 Aruna Sharma

46 Ajit Rath

Additional Chief Secretary Panchayat, Rural Development & Social Justice, Govt of Madhya Pradesh

General Manager-IT, Union Bank of India

49 Usha Menon General Manager - IT, Central Bank of India

50 Rohit Shukla Chief Security Officer, IDBI Bank

20 Dr Ajay

Bhushan Pandey

Deputy Director General, UIDAIMaharashtra

54 P K Chophla CGM & CVO, State Bank of Patiala

corporate 52 Sukesh Jain

22 Shree kant

Vice President, Enterprise Business Division, Samsung India

Singh

Principal Secretary, Department of Planning, Government of Maharashtra

56 Arindam Mukherjee Vertical Head - Banking & Financial Services, Cisco India & SAARC

58 Gaurav Vora Director, Dynaflex Private Ltd

24 Rajesh

Aggarwal Joint Secretary, Financial Services, Government of India

4/ BFSI | bfsi.eletsonline.com | january - march 2015

60 Deepak Khosla President - Asia & Australia, NIIT Technologies

62 Amit Chowdry CEO, PeopleLink

digitallearning

editorial

Well Begun is Half Done

t was in his first I-Day speech last year that Prime Minister Narendra Modi announced the launch of financial inclusion scheme — Pradhan Mantri Jan-Dhan Yojana (PMJDY), and it was days ago that the Guinness Book of World Records recognised the PMJDY’s achievement in terms of number of bank accounts opened under the programme — a whopping 11.5 crore. Unbelievable, but true!

The pace of opening accounts has been historic and the commitment shown by the stakeholders unprecedented. Indeed, the Indian business and finance sector is undergoing a process of churning and reinvention at a never-before scale. Similarly, the insurance sector has also been given a push by the government by making a provision for personal accidental insurance of Rs1 lakh besides a life insurance cover of Rs 30,000 for the account holders under PMJDY, though with certain riders. Also, by raising FDI ceiling in the insurance sector from 25 percent to 49 percent, the government has done its bit to help it generate more money and expand its capital base. In such a promising outlook for the country’s BFSI industry, we found it prudent and timely to come out with a magazine that not only understands and discusses issues facing the sector, but also speaks for it and advocates policy lines that could benefit both financial institutions and people at large. And, here we are with the maiden issue of Banking & Finance Post. Hope it fulfils the acutelyfelt need for a complete, holistic magazine dedicated to the sector. However, what apparently seems an all-rosy scenario has also tints of numerous challenges hampering the growth of the sector. Lack of adequate IT infrastructure and poor financial literacy being the main culprits, they act as dampeners for programmes like PMJDY. The Banking & Finance Post will also try to position itself as the vital link between the industry, policymakers and experts in the domain and come up with pragmatic solutions to vexed issues. In another exercise to understand the challenges facing the BFSI sector and discuss its future course, Elets Technomedia Pvt Ltd is going to organise ‘BFSI Leadership Summit & Awards 2015’ in Mumbai on 3rd February 2015. The occasion will see coming together of the four pillars of the Indian financial sector — Government, Regulator, Banker and Industry — from different parts of the country and deliberating on the roadmap for growth of the BFSI sector in India. The event will also acknowledge achievements and contributions of both individuals as well as institutions towards the growth of the sector through various awards. Be there to be part of the making of a financial giant called India!

ravi guptA Ravi.Gupta@elets.in

January - March 2015 | bfsi.eletsonline.com | BFSI

A Quarterly Magazine on Banking and Finance

january - march 2015 volume 01 n issue 01

Partner publications Chairman: Dr M P Narayanan Editor-in-Chief: Dr Ravi Gupta

Editorial Team governance Sr. Assistant Editor: Nirmal Anshu Ranjan Sr. Correspondent: Kartik Sharma, Nayana Singh, Souvik Goswami Correspondent: Gautam Debroy education Sr. Editor: Shitanshu Shekhar Shukla Programme Manager: Seema Gupta SALES & MARKETING TEAM National Sales Manager: Fahimul Haque, (+91 - 8860651632) Manager: Gaurav Srivastava (+91-8527697685) Subscription & Circulation Team Manager Subscriptions, +91-8860635832; subscription@elets.in Design Team Creative Head: Pramod Gupta Deputy Art Director: Priyankar Bhargava Sr. Graphic Designer: Om Prakash Thakur Sr. Web Designer: Shyam Kishore

digitallearning.eletsonline.com

dig

ita

ING

WEB DEVELOPMENT & IT INFRASTRUCTURE Team Lead - Web Development: Ishvinder Singh Executive-IT Infrastructure: Zuber Ahmed event team Manager: Nagender Lal Assistant Manager: Vishesh Jaiswal Editorial & Marketing Correspondence eGov – Elets Technomedia Pvt Ltd Stellar IT Park, Office No: 7A/7B, 5th Floor, Annexe Tower, C-25, Sector 62, Noida, Uttar Pradesh - 201309, Phone: +91-120-4812600, Fax: +91-120-4812660, Email: info@egovonline.net eGov does not neccesarily subscribe to the views expressed in this publication. All views expressed in the magazine are those of the contributors. The magazine is not responsible or accountable for any loss incurred, directly or indirectly as a result of the information provided. eGov is published by Elets Technomedia Pvt. Ltd in technical collaboration with Centre for Science, Development and Media Studies (CSDMS). Owner, Publisher, Printer - Dr Ravi Gupta, Printed at First Impression Corporate Services Pvt. Ltd., E-114, Sector-63, Noida.UP and published from 710, Vasto Mahagun Manor, F-30, Sector - 50, Noida, UP. Editor: Dr Ravi Gupta © All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic and mechanical, including photocopy, or any information storage or retrieval system, without publisher’s permission.

KNOWLEDGE

EXCHANGE, Jaipur GOA Higher Education

2015 Financial Inclusion & Payment Systems

Knowledge Exchange

GOA

digitalLEARNING / February 2015

egov.eletsonline.com | digitallearning.eletsonline.com | ehealth.eletsonline.com | events.eletsonline.com Write in your reactions to eGov news, interviews, features and articles. You can either comment on the individual webpage of a story, or drop us a mail: editorial@elets.in

6/ BFSI | bfsi.eletsonline.com | january - march 2015

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BFSI

cover story

Banking the Unbanked â&#x20AC;&#x201C; Economic Empowerment to

Every Citizen Well begun is half done. As the government gears up to cover every household in the country under banking services, the commendable achievement of opening bank accounts under PMJDY is just the first step. In future we will witness a plethora of products and services to reach every citizen as the journey unfolds for financial inclusion revolution in India

ndia reached a landmark number in its first step towards holding the promise of financial inclusion and economic empowerment to every citizen of the country. This was only made possible by the collaborative efforts of central government, state governments and bankers that have ensured that each household is included in the banking ecosystem. Applauding the commendable achievement of the Pradhan Mantri Jan Dhan Yojana (PMJDY), Honâ&#x20AC;&#x2122;ble Prime Minister Narendra Modi applauded the bankers on the extra-ordinary success of opening 11.5 crore new accounts in an extremely short time period and reach a coverage of 99.74 percent of all households in the country.

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And this is just the beginning of a revolution that is waiting to unfold to achieve the vision of financial inclusion in India. Efforts have already started to activate these accounts and offer variety of credit, insurance and pension services. And, the country will see banking, financial services and insurance (BFSI) sector play a pivotal role in nation building in the coming years.

Transactions Push Financial services should be made available for all sections of society. Now with the basic requirement being met by the banks, the next focus should be on financial literacy to make

BFSI

cover story these account holders aware of the products and services that are coupled with the account. As of January this year, 11.43 crore accounts were opened by banks across the country. And of this, 8.24 crore accounts had zero balance. Going forward the push for citizens doing transactions will really be the parameter of success for banks. These will be either through a banking branch or an ATM. The PMJDY already has mention of issuance of RuPay card that allows him to withdraw at ATMs. This ensures the basic tools for doing transactions is made available to every citizen. The next step is to get cash flowing into these accounts and for this the Direct Benefit Transfer (DBT) of selected government schemes have already started and are being deposited in the bank accounts of beneficiaries. The benefit of Adhaar card as an authentication tool to verify a beneficiary has also been widely implemented. As more accounts gets seeded with their respective accounts numbers there will be seamless cash flow under government schemes from the respective departments directly to the bank accounts. A major boost for bringing transparency, accountability and quicken the time for benefits to reach the beneficiary. It is only a matter of time that with large scale aggressive financial literacy campaigns on the ground, the citizen will realize the many advantages of being part of BFSI ecosystem.

Maharashtra - Leading the Way As the second largest state in India both in terms of population with 11.24 crore and with high percentage of urbanisation, the state has close to 55 percent of the state population dependent on agriculture and allied services. Thus it is no surprise that the state has a large network of co-operative banks that cater to the needs of urban and rural poor with financial services. More so, the branch networks and banking penetration are only increasing per year, further as per the RBI guidelines, the banks are now required to open 25 percent new branches in the unbanked areas. The state government has always laid its focus on reaching the last mile and more so on banking penetration. The mission of financial inclusion is spearheaded by the state level bankers committee (SLBC) and they have opened more that 73 lakh accounts under Pradhan Mantri Jan Dhan Yojana (PMJDY). UIDAI have also provided e-KYC facility for opening of accounts. The state has taken all the required measures to increase the penetration of bank accounts and have declared that the Maharashtra could be considered saturated. The Rupay cards have been issued to 61 lakh accounts and aggressive steps are on to achieve complete coverage. The state with its high number of Adhaar enrollments gives way to an easy seeding of bank accounts and come under the Direct Benefit Transfers (DBT) ecosystem. The focus of the state government is now to expand

The mission of financial inclusion is spearheaded by the state level bankers committee (SLBC) in Maharashtra and they have opened more that 73 lakh accounts under Pradhan Mantri Jan Dhan Yojana (PMJDY) the reach of banks and ATMs to the last mile to ensure that each beneficiary is able to carry out transactions and contribute to the economy.

Inclusion Revolution The central government has put on paper an aggressive strategy and challenging deadlines to push the efforts of the state government and banks and achieve 100% coverage of households with bank accounts. This was the prime disability that was keeping most of the rural and marginalized excluded from the benefits of financial services offered by the banks. The revolution will come into force when each citizen will use these accounts for their financial needs and make transactions, have savings, insurance and avail government benefits seamlessly using just a single bank account. The movement of cash economy being channelized through the banking ecosystem will also convert much of the informal economy into the formal channels. The future holds many opportunities and challenges, only consistent and sustainable efforts of all the stakeholders including banks, government and citizens together will help realize this dream for inclusive society. ď Ž

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/11

Special Interview

Devendra Fadnavis

Scripting Model

Banking State

Even as Maharashtra reaches near-saturation level in opening bank accounts for every household, Devendra Fadnavis, the Chief Minister, has his next task cut out for him â&#x20AC;&#x201D; reaching out to those whose records are not available with the government. Excerpts from an interview with Kartik Sharma of Elets News Network (ENN)

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Special Interview

Devendra Fadnavis Prime Minister Narendra Modi has launched a massive financial inclusion programme called Prime Minister Jan Dhan Yojana (PMJDY). The State of Maharashtra has reached almost saturation point in ensuring bank accounts for every household. What are your views on this? I must congratulate the bankers who have done a great job in reaching out to the last man. Bank accounts have been opened for each and every family, whose records were available. However, in our last meeting, we decided that we should not be satisfied by reaching the near-saturation level. We must reach out even to those people who have not been included in the survey. We have completed 99 percent of the task and now we are heading for 100 percent comprehensive financial inclusion in Maharashtra.

Maharashtra is the financial capital of the country with several banks having their headquarters here. How do you see the role of the State in expanding financial inclusion across the country? In my opinion, empowerment of people comes through expansion of financial institutions and financial inclusion. At the macro level, the network of financial institutions is very good in Maharashtra, but at the micro level, it is not sufficient. Therefore, we must expand the network of financial institutions. This is true especially for the areas like Vidarbha and Marathwada, where the network of nationalised banks and commercial banks need to expand. Right now, the credit-deposit ratio in these regions is poor. So, I have appealed to the banks to expand their network in Vidarbha and Marathwada regions.

How important do you think is the role of technology in financial inclusion? We are focusing on last-mile connectivity at the moment. Once that is achieved, we can use technology for expanding the facility of virtual banks even up to the gram panchayat level. So, we will try to use more and more technology in the framework of governance.

The Government of India is coming up with various schemes like Digital India, Make in India, PMJDY, etc. How do you see Maharashtra working in sync with these initiatives? These are very important initiatives of the Government of India and they hold true for the nation at large. I believe that if India has to grow beyond eight percent, Maharashtra has to grow beyond 10 percent, as it is one of the most developed states. We are celebrating the ‘Digital Year’, in which we will launch several digital initiatives. We launched ‘Aaple Sarkar’ platform on January 26, which is a portal like ‘MyGov’ at the national level. This portal will help people connect with the government.

If India has to grow beyond eight percent, the State of Maharashtra has to grow beyond 10 percent, as it is one of the most developed states

Maharashtra has huge number of cooperative banks, which play a crucial role in the economy. How do you look at this sector? Cooperative institutions are the backbone of our economy and we need to strengthen those. At the same time, we need to ensure that these institutions function in a transparent manner. In a recent incident, a cooperative bank collapsed for lack of transparency. In these institutions, there is a major role of trusteeship. We want to encourage such institutions and create a framework in which more and more cooperative banks and cooperative societies are created.

Please share your message for the Participants at BFSI Leadership Summit. For the development of an economy, a society or a community, there has to be a framework where the financial capabilities of societies, nations and economies are built up. Banks have a very important role to play in this context. Banks have also played a pivotal role in our nation building process. As India is a growing economy where people are willing to invest, we need good banks and financial institutions to expand our fiscal presence. I am sure, the BFSI Leadership Summit will provide impetus to the process of strengthening the banking system in the State and in the country. I wish the Summit all success and hope the stakeholders would benefit from the deliberations. 

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Policy

K P Bakshi

PMJDY will Take Benefits to Last Man Maharashtra has made huge strides in the field of financial inclusion by covering almost entire State under the programme, though there remain some areas of concern, K P Bakshi, Additional Chief Secretary, Department of Home, Government of Maharashtra, tells Kartik Sharma of Elets News Network (ENN). Excerpts from the interview

How do you see the state of financial inclusion in Maharashtra? The subject of financial inclusion is of utmost importance, because no matter how much of developmental activities are promoted, these activities would not be meaningful unless the benefits reach the last mile. All our activities must ensure that even the last person is enabled to take part in the process of development and benefits from it. In case, there is a section of the society that is left out, they might develop grudges against the government. Therefore, I strongly believe that all the financial instruments must be made available up to the last individual. As far as the State of Maharashtra is concerned, we feel that it has done reasonably well in terms of financial inclusion. If we find that any particular area does not have proper connectivityâ&#x20AC;&#x201D;whether of broadband, road or electricityâ&#x20AC;&#x201D;we consider the area not to be part of the financial inclusion programme. In Maharashtra, work needs to be done for upgrading the status of those who are living in hilly, tribal and Naxal-affected areas.

What do you think are the major challenges with regard to expansion of the financial inclusion programme? A major issue in Maharashtra is poor connectivity of roads, railways, mobile, broadband and unavailability of electricity in most of the remote areas. If these can

14/BFSI | bfsi.eletsonline.com | january - march 2015

Policy

K P Bakshi be overcome, developmental programmes will surely reach the last person in the society.

What are your thoughts on the Pradhan Mantri Jan-Dhan Yojana (PMJDY)? In order to ensure that every citizen has a bank account, Honâ&#x20AC;&#x2122;ble Prime Minister has launched PMJDY. All government benefits and other financial instruments would reach the beneficiaries through these bank accounts. This process eliminates the role of intermediaries, thereby, narrowing down chances of corruption. All the government programmes like subsidies, scholarships, Direct Benefit Transfers (DBT) can easily reach people with the help of these bank accounts. PMJDY is very relevant, and so far, Maharashtra has done a good job in this context. It can be said because 99.3 percent of the account opening target has been accomplished in this State.

What role do you think Aadhaar can play in this process? Aadhaar is a method by which identification of individuals can be done. By seeding Aadhaar with the bank data, validation of the accounts can be made. Thus, Aadhaar is the tool through which all fraudulent activities can be curbed. Therefore, by linking Aadhaar to the bank accounts, all financial benefits can be provided in a hassle-free manner, at cheaper costs and in a transparent manner. This will also make the system clean by omitting chances of pilferage, duplication etc.

What is the importance of insurance in the process of financial inclusion? The insurance sector in the country is growing at a very fast rate, yet we cannot confidently say that every citizen in the country is enjoying the benefits of insurance. Insurance in all forms, such as health insurance, crop insurance, property insurance, car insurance, etc., must be spread across the strata of the society.

What must be the one way to ensure safety and security in banks? There are various types of security agencies available in the country. They belong to both government as well as private sector. The Central Industrial Security Force (CISF) is an authority, which is under the control of the Central Government. The CISF personnel are deployed in the important undertakings of the Government of India, such as airports, Food Corporation of India (FCI), etc. We also have the Railways security forces to protect its property.

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In our State, we have the Maharashtra Security Corporation, which provides trained security forces for manning installations, like banks, ports etc. These forces are very well-trained and provide security to important institutions. It becomes vital to provide safety to the banks, which are located in remote areas. Further, it is essential to offer security cover to the cash, which is being transported from one location to another.

How do you envision the growth of the banking sector in the upcoming years? The banking sector of the country has been doing pretty well. In the recent past, most of the public as well as private sector banks have entered remote areas. This is to be looked upon as a great social change that

Financial literacy is a big challenge in India, but not as big as it appears to be. Even in rural India, people save money in traditional manner and that saved money is utilised in times of need has occurred. Five years ago, the nationalised banks as well as the private sector banks in Maharashtra were lagging behind the cooperative banks in terms of reaching out to the rural masses and providing agricultural loans. Today, the situation has changed. The private sector banks and the nationalised banks both play a significant role in providing crop loans to the farmers as compared to the cooperative banks. This is a remarkable change and the banks are also doing a wonderful job in providing small loans to the farmers, thus making their lives easier. ď Ž

Policy

Dr Aruna Sharma

Bricks & Mortar Banking Points

Across MP Soon Promoting financial literacy and setting up bricks and mortar financial institutions every 5 kms for ease of credit and insurance products is the way forward for PMâ&#x20AC;&#x2122;s Jan-Dhan Yojana, Dr Aruna Sharma, Additional Chief Secretary - Panchayat, Rural Development & Social Justice, Govt of Madhya Pradesh, tells Gautam Debroy of Elets News Network (ENN)

What steps have been taken by the Madhya Pradesh Government towards a comprehensive financial inclusion (FI)? The State of Madhya Pradesh has defined financial inclusion as a holistic approach focussed on access to financial services. Thus, it is not restricted to just opening an account but to ensure that the BC points/USBs/CSPs (Business Correspondents points/Ultra Small Bank/Customer Service Points) are opened in bricks and mortar. Space of 100 sq ft is offered free of cost in e-Panchayat rooms. It is mandatory to have name plates bearing names of bank branches and villages within the 5km radius it would serve. Thus, all financial institutions have their service area of 5km radius. Post offices are also being counted till the time BC points/USBs/CSPs become operative and proper banks are in place. Cooperative Bank being in core banking, it also caters to FI process. The next mandatory step is to have the account number seeded in the common database of the State, i.e. Samagra Database. Thus, for any G2P scheme, the account number of the beneficiary, along with the IFSC code, is available. Samagra Database enables cross-checking entitlement and G2P transactions. In 2013-14 fiscal, such transactions stood at `7,319 crore covering MGNREGA, scholarships spread across several departments, PDS system entitlements, housing, pensions, etc. Thus, the State is targeting for a holistic model. The focus is on financial literacy, ease of getting credit etc.

Tell us about the Samagra Samajik Suraksha Mission. The Samagra Samajik Suraksha Mission (SSSM) is a common database using census data as the base data. The database, prepared on the basis of door-to-door survey, has details of families. Therefore, SSSM gives each family a unique Family ID and individual ID number. This helps know the entitlements of a specific family. This has also check duplication. Nearly Rs350 crore has been saved in scholarships and 4 lakh pensions have been stopped. This database also helps in knowing the number of members of a family for PDS. Housing and sanitation is linked to the Samagra Family ID, thus preventing duplication.

What initiatives have been undertaken by the

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Policy

Dr Aruna Sharma

State Government for ‘Samruddhi’ (prosperity) of the people at large?

What policy-related suggestions would you make to push financial inclusion in the country?

There is a need to work out 'Samruddhi' line instead of talking about poverty line. The State is working out the details, like number of families with pucca houses, children going to school and not resorting to child labour, immunisation, drinking water etc. This will take people up the prosperity ladder. This is the concept, we are trying to evolve through our 'Samruddhi' plan.

The next step in the Pradhan Mantri Jan-Dhan Yojana is to ensure bricks and mortar financial institutions every 5 kms. Financial literacy with ease of credit and good stable insurance products is the way forward. If post offices are brought into core banking, it will give a boost as they have all financial products to accept credit. Mini banking licences will go a long way in promoting financial inclusion.

Have you fixed any time frame for achieving comprehensive financial inclusion? Under the PM’s Jan-Dhan Yojana programme, majority of the people have opened accounts. The target, there-

Under the Pradhan Mantri JanDhan Yojana programme, majority of the people have already opened accounts. The target is to make all the Business Correspondent points operative fore, is to make all the BC points operative. Already 2,415 are fully functional and another 2,000 in the offing. Thus, entire geographical area of the State is covered. Now, post-office (non-core banking) areas are to be replaced with banks, which will be complete very soon. But, financial inclusion in holistic manner will require to have on offer products like credit, insurance and their access to the account holders. RuPay debit cards with Samagra Family ID, individual ID and Aadhaar number wherever available have already been approved by NPCI (National Payment Corporation of India) and is being issued. We are first State that will have name of beneficiary in vernacular i.e. Hindi, as well. This task is targeted to be completed in the coming financial year with more and more departments joining with their G2P schemes.

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How do you operate the DBT scheme in Madhya Pradesh? As of now, using Samagra Database, already MGNREGA, Housing, Pensions, Scholarships etc., have been brought in DBT mode, i.e. straight from State Government account to the accounts of beneficiaries. More such schemes are dovetailing the same. This enables immediate disbursement and avoids parking of funds in various accounts. Under the system, departments draw required fund from the state treasury into their accounts and from there disburse directly into the accounts of beneficiaries.

What is the status of Swachha Bharat Mission in your State? There is a long way to go. This is one scheme where there is more of 'push' factor than the 'pull' factor. The ODF (open defecation-free) villages/panchayats tend to slip and, hence, there is a constant effort to awareness building. The strategy is to link ODF with the dignity of women and, hence, called 'Maryada Abhiyan'. The efforts are also on to ensure that demand is created to have toilets. Under ‘Panch Parmeshwar’ plan, enough funds are made available to panchayats, which has resulted in more than 2-3 lanes in every village being already covered with concrete structures having drainage facility. Thus, village/panchayat is motivated to maintain hygiene by having toilets at home, school, Anganwadis, etc., and maintain cleanliness and solidliquid waste management. 

Aadhaar

Dr Ajay Bhushan Pandey

What is the major area of focus for the Unique Identification Authority of India (UIDAI)’s Maharashtra regional office?

Aadhaar – Basis of

Banking Services Seeding of Aadhaar with PMJDY accounts will help banks deliver services at doorsteps and thus take financial inclusion programme forward, says Dr Ajay Bhushan Pandey, Deputy Director General, UIDAIMaharashtra, in conversation with Kartik Sharma of Elets News Network (ENN)

20/BFSI | bfsi.eletsonline.com | january - march 2015

At present, 80 percent of the population in Maharashtra has been covered under Aadhaar, which is amongst the highest in the country. In terms of total numbers, Maharashtra has contributed to Aadhaar around 9 crore at the national level. We are trying to cover the remaining 20 percent of the population in the State. Based on our analysis, it has been noticed that a large chunk of uncovered population is that of children between 0-5 years of age. Only 25 percent of this age group has got Aadhaar cards. So we, along with the Government of Maharashtra, are trying to do a focussed enrolment of children of that age group. The State Government will be launching a campaign soon. Aadhaar enrolment camps will be organised in various Anganwadis under this campaign. It is likely that most of the children in Anganwadis do not have Aadhaar enrollment. Once that is over, the left-out adults can also be covered. The problem is that if we do not cover these children, then in future, when they grow up, a large number of people would be there without the Aadhaar enrolment.

What other initiatives are on the anvil for UIDAI, Maharashtra? We are also focussing on establishing permanent enrolment centres at various places. As we know that the Government of India has issued directives to link Aadhaar with various schemes like MGNREGA, PDS, scholarships, pensions, etc. If Aadhaar is being linked to so many services, we have to ensure that the people who don’t have Aadhaar or the people, who want to update their Aadhaar data, should be able to go to a convenient centre and get the work done. The Union Government has also requested the state governments to seed their database with Aadhaar, so that the efficiency of delivery improves, leakages are minimised and duplication is eliminated. We are working with the State Government to get things done as early as possible.

Aadhaar

Dr Ajay Bhushan Pandey Prime Minister has also directed to use digital life certificates. It is based on Aadhaar. People now don’t have to go to bank to prove that he or she is alive for continuation of his or her pension. This has provided huge relief to a large number of pensioners. The introduction of Aadhaar-based attendance system in government offices is also a major initiative. It has for sure increased government efficiency. Even in Mumbai, most of the central government offices now have Aadhaarbased attendance system. In short, the first step was introduction of Aadhaar enrolment and the next, its usage in various services.

How UIDAI is partnering with the private sector for new technologies and innovations for Aadhaar? The entire Aadhaar ecosystem is a perfect example of public-private partnership. If we see the Aadhaar organization as such, we will find that there are very few people who are actually government employees. Enrolment agencies are from the private sector. Similarly, all the devices, like finger print scanners, enrollment machines, laptops, etc., are developed conforming to our standards by private players. We are here working closely with the private partners at every step.

Apart from these, the Government of India is also trying to link Aadhaar with their various services at the national level. One of the biggest examples of this is subsidy for LPG cylinders. We are trying to work with the Ministry of Petroleum & Natural Gas, Government of India, and other various oil marketing companies to ensure that people don’t face any difficulty during the programme. For this, we have also given our enrolment centre details to every gas distributor. It will ensure a smooth process for consumers without Aadhaar enrolment to know where exactly they need to go for the purpose.

How Aadhaar has helped in the Government of India’s financial inclusion programme, Pradhan Mantri Jan-Dhan Yojana (PMJDY)? PMJDY is also our focus area. I am told that more than 3 crore accounts have been seeded with Aadhaar and majority of these accounts have been opened using eKYC. Since the banks have been on-boarded the Aadhaar-based eKYC system, they should now open bank accounts and offer various banking services through their banking correspondents by using Aadhaar-based payment system or using Aadhaar eKYC process. This will help banks deliver services at the doorsteps and thus take financial inclusion programme forward.

eGov is organizing BFSI Summit. Please share your thought with us on this summit. This summit is very important. It is a BFSI Summit and being organized in the City of Mumbai — the financial capital of the country. Top leaderships from the finan-

The entire Aadhaar ecosystem is a perfect example of public-private partnership... Enrolment agencies are from the private sector and the devices, like finger print scanners, enrollment machines, laptops, etc., are developed by private players cial institutions like banks, regulator, NBFCs are present here. On the other hand, we are at a very crucial juncture of Aadhaar journey. We are going to cross the number of 75 crore in terms of Aadhaar coverage very soon. Considering that kind of coverage under Aadhaar and, at the same time, the continuous push from the Government of India’s side to use Aadhaar for the delivery of services and making people’s lives convenient, I think BFSI Summit brings in the opportunity to get top people together from this sector to deliberate upon the best possible way to take it forward. This can result in evolution of a common strategy to be adopted for getting the desired result. 

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Policy

Shree kant Singh

Maharashtra to Take

PMJDY to Next Level The State Government canâ&#x20AC;&#x2122;t stop just at opening PMJDY accounts, as its stronger linkage with the banking ecosystem is a must to make it a sustainable programme, Shree Kant Singh, Principal Secretary & Development Commissioner, Department of Planning, Government of Maharashtra, tells Sneha Mejari of Elets News Network (ENN)

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Policy

Shree kant Singh

Share with us your vision for taking the financial inclusion mission across the State? Our vision is to ensure that no eligible citizen is excluded from the development ecosystem. The State administration and the banks are geared up to work in close coordination to ensure that every beneficiary of financial benefits and entitlements is included under the financial inclusion schemes. The State has been aggressive in opening of accounts under the flagship Pradhan Mantri Jan Dhan Yojana (PMJDY). These would include RuPay Debit Cards, e-KYC based account opening, Aadhaar seeding and progress in the survey made in the rural as well as urban areas.

How have been the efforts towards PMJDY execution in the State? The State Government has always been taking aggressive steps towards financial empowerment of its citizens. These efforts got channelised under PMJDY and we are much ahead in terms of progress made in this direction. Bank accounts for every beneficiary will empower not only citizens, but also the State to direct the benefits of government schemes to the right person. It will also eliminate pilferage. We have currently opened additional approximately 74 lakh accounts and look forward to cooperation from the bankers’ community. The work of opening accounts of uncovered families would continue with the same zeal. I am glad to share that the State of Maharashtra could be declared a saturated State as far as opening of accounts under PMJDY is concerned. This has been possible by the hard work of bankers, the lead district managers and the State Mission Director for the achievement under PMJDY in Maharashtra.

How do you see the use of technology in addressing the challenges of geographical expanse

As a strategic move, we had launched our first online product in May 2012, as today’s young and tech savvy executives are looking for easy access to make purchases online and reach of banking services in the State? Also tell us about the role of Aadhaar in this regard. Technology is now engrained in every aspect of BFSI services and has become all-pervasive in our lives. Today, we hardly go to bank branches, as we prefer doing most of our banking-related work either online or on mobile. This trend is going to further escalate in the future. Aadhaar has emerged as an easy tool for eKYC that is now been widely accepted by the banks and as ID proof to avail various services. Maharashtra is again a leader in the number of enrolments and seeding of Aadhaar numbers with the bank accounts of beneficiaries. So, I envision that Aadhaar and financial inclusion efforts will go hand-in-hand, as they complement each other to achieve the goal, bringing about transparency and accountability in the government initiatives.

What, according to you, is the way forward for financial inclusion drive in Maharashtra? We are also exploring ways to extend the facility of credit to the needy in the remotest villages in the State. We are aware that our efforts cannot stop just after opening the accounts, as the critical step of linkage with the banking ecosystem is a must to ensure sustainability of the programme. There still remains a long road ahead on issuance of RuPay Card and sensitisation of customers in respect of its activation and usage. In the meantime, the banks would continue to open accounts of leftover families, who have emerged in the survey as being excluded. 

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Policy

Rajesh Aggarwal into the bank accounts. In all, nearly `1,25,000 crore from the State treasury goes straight into the bank accounts. In addition to it, the money coming from the public to the government is another big issue. The government receives money by way of electricity bill, water bill, municipality tax, etc. We are trying that people are able to pay these bills through net banking. Last year, the overall recovery of the Sales Tax Department amounting to `62,000 crore was done through net banking, out of which about `30,000 crore was collected through MahaOnline. Similarly, nearly `90,000 crore was transacted across India through net banking. Once you have done computerisation of transactions, it creates an automatic database.

What steps were taken to bring overall transparency in the government ecosystem? We have undertaken several initiatives to bringing transparency in the system, though states like Karnataka and Andhra started those initiatives much earlier. We have been doing it for the past four years by providing knowledge and training people on digital signatures. We have already started e-tenders to ensure transparency. From this year, we have made it mandatory that any

Maharashtra Govt

Services on Cloud Rajesh Aggarwal, Joint Secretary, Financial Services, Government of India, shares his experiences of working in Maharashtra as the Stateâ&#x20AC;&#x2122;s Principal Secretary-IT in an interview with Kartik Sharma of Elets News Network (ENN) In your previous capacity as Principal Secretary of Departmentn of IT in Maharashtra, what have been the highlights under eGovernance to make life easier for a common man Direct Cash Transfer is one of the major achievements which we are focussed on. It is a process in which maximum portion of a personâ&#x20AC;&#x2122;s salary is transferred to his bank account. We have been doing it in Maharashtra for many years and in the last two-three years, we have been very successful. We are trying to ensure that whatever money is paid by the government towards salaries, pensions, scholarships, flood and drought aid to farmers, etc., now goes straight to banks. Since banking structure is robust in Maharashtra, an approximate amount of `1,200 crore of scholarships goes

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tender above `3 lakh will be an e-tender in Maharashtra. For the first 10 months of this year, we are planning to have tenders worth `50, 000 crore. Likewise, any auction above one lakh would be done online. Transparency has been adopted in recruitments too. Inviting applications online leaves minimal scope for discrepancies in the selection of candidates. From filling applications forms to the declaration of results, everything is online.

Earlier, Congress party ruled both the Centre and the State of Maharashtra. Now, the same goes for BJP. In such a scenario, what opportunities and challenges did you face in regulating the government schemes? Whether it is the present government or the previ-

Policy

Rajesh Aggarwal ous one, IT has always been a priority. Luckily, the IT portfolio has always been with the Chief Ministers in Maharashtra. The former Chief Minister Prithviraj Chavan was computer-savvy and the same goes true for the new Chief Minister Devendra Fadnavis as well. We have started a good number of schemes from 1st January. On the first day, we started online RTI, on 15th January, we issued online passes for Mantralaya, and on 26th January, we started ‘Aaple Sarkar’ platform, a grievance redressal portal. Furthermore, there are various digital programmes under progress, like CCTV programme in the Home Department, CCTNS, jail computerisation, Revenue, Excise, Social Justice and Education Department, among others.

As the Principal Secretary-IT, you ware responsible for making other departments eReady. How challenging was the task? The first and foremost task of the Department of IT is to provide a good centralised system that helps every department. We have made a very good data centre and developed it into a Cloud-based structure, which doesn’t exist in any other state. We tell other departments to provide their software and assure them of arranging hardware within two to three hours. Otherwise, it takes two to three years to buy a server and other related processes. So, we commit to accomplish two years’ task in two hours now. We have informed all the departments that they can plug in with the Cloud, and have created the payment gateway and SMS gateway on MahaOnline. Consultant empanelment has also been provided to different departments for their IT requirements. We have also made processes and systems very simple by getting eGgovernance policy approved by the State Cabinet. Now, a Project Implementation Committee (PIC) will be there for projects costing less than `5 crore. Instead of rotating files for project approval, the interested department is just required to call the PIC and bring the agenda to other concerned departments like finance and industry. After recommendation from PIC, project goes to the Chief Secretary, who further helps in completion of the projects.

You are personally passionate about IT. How your interest in IT helps you leverage efficient delivery of your responsibilities? Nowadays, IT can be used in any area of life. When I came to this State, I was Secretary of the Animal Husbandry Department. You cannot imagine what could be the role of IT in such a department. Though, being from the IT sector, I used it to break a problem into simpler

pieces and then provide solutions. However, the real role of IT is in the banking, finance and insurance sector.

You are recognised as an expert on Cloud technology in India in various state secretariats. How do you see the growth of Cloud in India as a technology for the future? Cloud released various departments from thinking of the cumbersome process of hardware acquisition. In the last two-three years, co-operative and other banks have changed to Cloud technology for their core banking activities, and it has improved their efficiency. Previously, developing software and putting it on a server would take four to five years. There are two-three companies that provide Cloud solutions. It is simple like opening a Gmail account, which then is connected to a Cloud service provider, and soon after sendingreceiving of e-mails can begin. Simultaneously, banks have also started using core banking. So, if one wants

We are trying to ensure that whatever money is paid by the government towards salaries, pensions, scholarships, flood and drought aid to farmers, etc., go straight to the beneficiaries’ bank accounts to start any service or software, we can literally provide it in the next three hours on Cloud.

What will you miss about working in Maharashtra? In Maharashtra, in IT luckily, we had a very good team. Along with IT professionals from the government, there is a good team of young professionals even from different consultant firms, who are working in various government departments. More than IT, I will miss Mumbai as a city for its weather, people and level of professionalism. 

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Banking

Mohan Tanksale

Be it Internet Banking, Mobile Banking or banking through handheld Point of Sale (POS) devices, technology has facilitated the ease of banking like never before, says Mohan Tanksale, Chief Executive, Indian Banksâ&#x20AC;&#x2122; Association, in an interview with Poulami Chakraborty of ENN

Technology Enables

New-Age Banking Technology has been adopted across sectors. What is the ground reality of its implementation in the Indian banking sector? Technology has made it possible to deliver services within and beyond the bank branch network, providing instant updates on transactions, rapid movement of money, etc. Technology has also helped in efficient customer acquisition, better risk management and better customer service by bringing transparency in their operations. The introduction of ATMs in banks has transformed banking by providing banking services anytime, anywhere. To supplement the efforts of banks in providing banking services to people in unbanked or underbanked areas, non-bank establishments were permitted to install and operate ATMs with greater focus on Tier III and Tier VI centres. A total of 1,960 White Label ATMs (WTAs) were deployed by April 2014.

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The grid based Cheque Truncation System (CTS) in Chennai, Mumbai and New Delhi facilitate clearing of all cheques drawn on bank branches within the grid jurisdiction as local cheques, thus eliminating the levy of speed clearing charges/outstation cheque collection charges, etc. Technological advancements in Internet and mobile phone are now on the boom. Banking through Internet has emerged as a strategic resource for achieving higher efficiency, control of operations and reduction of cost by replacing paper-based and labour-intensive methods with automated processes thus leading to higher productivity and profitability. However, worldwide it has been recognised that mobile phone has the potential to universalise access to banking and payment services in a low-cost and seamless manner to the existing and potential customers. The Interbank Mobile Payment Systems (IMPS) is a mobile-based payments system that facilitates access to bank accounts and transfer of funds through mobile phones. Now the attempt is to provide front-end consolidation to banks in the form of common Unstructured Supplementary Service Data (USSD) platform to enable the users to use low-end mobile handsets that do not require any specific application to do mobile payments/ banking.

What innovative technologies can be expected in the Indian Banking sector in the near future? The Payment System Vision Document â&#x20AC;&#x201C; 2012â&#x20AC;&#x201C;15 of the Reserve Bank of India envisages to encourage electronic

Banking

Mohan Tanksale payment systems for ushering in cash-less society in India. The vision is to ensure that payment and settlement systems in the country are safe, efficient, interoperable, accessible, inclusive and compliant with the international standards. Certain major payment system initiatives, such as RTGS, NEFT and ECS, have been game changers helping millions of people transfer money faster from one place to another. The purpose of the proposed introduction of International Bank Account Numbers (IBANs) would be to facilitate domestic/ cross-border inter-bank electronic payments and avoid routing errors in domestic/crossborder payments, among others. The Bharat Bill Payment System (BBPS) is a major component of the retail payment transactions. BBPS will function as a tiered structure for operating the bill payment system in the country with a single brand image providing convenience of ‘anytime anywhere’ bill payment to customers.

What are the operational challenges that the banking industry is facing in Tier II and Tier III cities? Generally, in these cities infrastructure bottlenecks, like proper road, transport and connectivity issues, are the major problems. Further, petty crimes and other social unrest also affect the operations of the banks. Low volumes of transactions and lack of financial awareness of the people about banking products are also a challenge to the banks.

Share with us your views on Pradhan Mantri Jan Dhan Yojna. Pradhan Mantri Jan-Dhan Yojna (PMJDY), an ambitious programme on financial inclusion to cover about 7.5 crore unbanked households in the country, was launched by the Hon’ble Prime Minister within a target deadline of 26th January 2015. PMJDY envisages provision of affordable financial services to all citizens within a reasonable distance. It comprises the following six pillars of universal access to banking facilities: providing basic bank accounts with overdraft facility and RuPay Debit card to all households; financial literacy programme; creation of credit guarantee fund, micro-insurance and unorganised sector pension schemes like Swavalamban. The major shift in this programme is that households are being targeted instead of villages or population density-based parameters. Moreover, both rural and urban areas are being covered this time as against only rural areas targeted earlier. The present plan pursues digital financial inclusion with special emphasis

on monitoring by a Mission headed by the Finance Minister.

What more steps would you suggest for better implementation of financial inclusion plan? The current policy objective of inclusive growth with financial stability cannot be achieved without ensuring universal financial inclusion. Our experience suggests that the banks alone will not be able to achieve this unless an entire support system partners them in this mission. The support of policymakers, regulators, governments, IT solution providers, media and the public at large alone can bring about a universal financial inclusion. Financial inclusion of the unbanked masses is expected to unleash the hugely untapped potential of the sections of the society that constitute the bottom of the pyramid. However, in pursuing the FI mission, the normal banking model has been found wanting in terms of cost, scalability, convenience, reliability, flexibility and continuity. To ensure that the banks give adequate attention to financial inclusion, they must view this as a viable business proposition rather than as a corporate social responsibility or a regulatory obligation.

ATM density in the Tier II and Tier III cities is very low. How can this issue be resolved? Each bank branch is provided with an onsite ATM, with 60% of them located in the urban and semi-urban areas. As per the statistics of October 2014, the total number of ATMs and POS terminals is as follows:

The figures indicate that there is no deficiency. Nevertheless, BCs are operating at fixed points or are mobile, providing services to customers through micro-ATMs (POS), which is interoperable.

What measures should be taken to increase financial literacy among people in smaller cities? With rising population and growing middle class, empowering citizens through financial education is imperative. Institutions should facilitate responsible intermediation and management of long-term financial obligations. The financial products of banks, mutual funds and insurers are the means to achieve financial inclusion. While these goals have to be primarily set by the individual, it is the obligation of all financial intermediaries to give proper advice. 

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Insurance S K Roy

Pioneer Remains Market Leader Despite stiff competition from private players in the insurance space, the Life Insurance Corporation of India has been a market leader for the last 58 years, asserts S K Roy, Chairman, Life Insurance Corporation of India, in an interaction with Kartik Sharma of Elets News Network (ENN) Give us an overview of LIC's operations. The Life Insurance Corporation of India came into being on September 1, 1956 with the objective to serve the individual as well as the state. A solemn vow was taken and captured by the motto ”Yogakshemam Vahamyam”, meaning “Your welfare is my responsibility.” For the past 58 years, LIC has been playing a significant role in spreading life insurance widely across the country. LIC is the largest insurer in the country, with over 30 crore live policies and an asset base of around `18 lakh crore. Despite a stiff competition in the insurance space, the LIC of India retained its market share of 75.33 percent in premium and 84.44 percent in NOP in New Business in 2013-14. Today, LIC serves its customers through eight zonal offices, 113 divisional offices, 2,048 branches, 1,346 satellite offices and 1,242 mini offices, with more than

Please shed light on the initiatives being undertaken by LIC in terms of providing life insurance to financially excluded people.

LIC's Vision 2020 envisages covering all the insurable population of our country by 2020. This is an initiative undertaken by LIC spreading life insurance to the farthest corner of our country. We have opened 1,242 mini offices, so as to make our presence felt in hitherto unrepresented areas and reach out to all insurable population of the country. As per the regulatory requirements, we have introduced some new products which have been well received in the market. Some more products are in the pipeline. Once these are also introduced, our customers will have a wider basket of products to choose from. The Ministry of Finance has envisaged a two-phase rollout of the financial inclusion programme. In the first phase, universal access to banking LIC has always been in the forefront of facilities will be provided to every household. In the second phase, a Credit Guarantee financial inclusion and empowerment initiatives of the Government of India. Under Fund will be created and penetration of micro insurance and ‘Swavalamban’ will be our micro insurance channel, we have enhanced. The Pradhan Mantri Jan Dhan Yojana already covered more than 1.78 crore policy (PMJDY) is a very effective medium to reach holders in the last eight years the masses. The scheme has been started with a target to provide 'universal access to banking 1,20,388 lakh employees and 11,95,916 lakh agents. facilities' starting with ‘Basic Banking Accounts’ with overBesides life insurance, through its various subsidiaries, draft facility of `5,000 after six months and RuPay Card it is also involved in providing various financial services, with inbuilt accident insurance cover of `1 lakh and RuPay including Pension (LIC Pension Fund Ltd.), Housing Kisan Card. There is also an inbuilt life insurance cover of Finance (LIC HFL Ltd), Mutual Fund (LIC Nomura MF), `30,000 for one person in the family, which is being adminetc. It also provides insurance services in several counistered by LIC. tries abroad through its branch offices, joint ventures and LIC has always been in the forefront of financial incluwholly-owned subsidiaries. sion and empowerment initiatives of the Government of

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Insurance

S K Roy

India. Under our micro insurance channel, we have already covered more than 1.78 crore policy holders in the last eight years. We have set a target of 24 lakh micro insurance policies for 2014-15. We also plan to recruit at least 750 agents under this channel to deepen our penetration in the semi-urban and rural areas.

How is your organisation leveraging technology for providing better services to the clients? As a strategic move, we had launched our first online product in May 2012, as today’s young and tech savvy executives are looking for easy access to make purchases online. The second online policy, which is a purely term assurance policy, was launched in May 2014. We have, in a span of eight months, achieved 5,373 e-term policies. We are always in the forefront to provide the benefit of latest technology to our customers. We have already digitalised more than 30 crore policy records through our Enterprise Document Management System. With this initiative, records of our policies can be accessed all over India to provide services to the policyholders. Also, many of the services of LIC are available through SMS. Policyholders, who are registered in our Customer Portal on our website, receive premium intimations, loan quotations and other services through SMS. Premium payment facilities with Debit/Credit card and internet banking is also available on the online platform.

You have been a leader in this space. Please share your vision about the future of insurance industry in India and the go-to-market strategy of LIC. Being the largest life insurance company in India, LIC strives to introduce a variety of products, so as to cater to the evolving needs of the society. We provide products for different business segments, such as pension and group insurance, individual life insurance, health insurance, micro insurance and products for online business. We would like to be present in the space for different customer segments, such as plans for children, high net worth customers, etc., under the individual business and some niche products under the group segment. In the light of customer-oriented market conditions and also with a vision to provide financial inclusion to the rural masses and to pool their resources into the nation building process, there is a need to sensitise the workforce towards these issues. Technology plays an important role in providing customer service today, particularly because of the large volumes we handle. Workforce needs to be trained

to adapt to the changes and upgradation in technology to meet the rising customer aspirations. We are seeing a growth in the economy in the current fiscal. It is a slow moving uptrend. So, the life insurance industry will continue to perform well and the initiatives taken by the insurers and the Regulator will go a long

As a strategic move, we had launched our first online product in May 2012, as today’s young and tech savvy executives are looking for easy access to make purchases online way in increasing the insurance penetration and density in India. LIC is a market leader and, hence, we will definitely benefit from the growth of the economy. We will claim our stake in the growth trajectory for sure. The challenge for LIC is to continue on track with the happenings and the developments in the financial market and changes in customer’s profile and preferences. But we have our systems in place — best technology and a dedicated workforce to meet these challenges. We are exploring all segments and markets and upgrading the resources constantly to flow with the tide. 

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Banking

Sushil Muhnot

Banking with Least Human Intervention Technology-based banking without any visible human intervention will replace the present system of banking with human assistance, says Sushil Muhnot, Chairman and Managing Director, Bank of Maharashtra, in conversation with Kartik Sharma of Elets News Network (ENN)

Please brief us about the financial inclusion initiatives undertaken by the Bank of Maharashtra. The Pradhan Mantri Jan-Dhan Yojana (PMJDY) is a major initiative of the Government of India that has led the banks to work towards achieving comprehensive financial inclusion in a massive way. PMJDYâ&#x20AC;&#x2122;s emphasis is on ensuring that every family in the country joins the banking mainstream by opening accounts. All the states have done a good work in the PMJDY and the State of Maharashtra has become almost saturated in terms of opening accounts under the scheme. The Bank of Maharashtra has also achieved the assigned target successfully. The first step was to bring everyone under the canopy of financial inclusion. After achieving that, we can extend various financial services to people. Work in this area has already been started. PMJDY can be of great benefit to the women population at large. The scheme has sociological implications as well. It leaves no room for shopkeepers under the PDS system and other government schemes to discriminate against beneficiaries, as the money comes to their bank accounts directly, thus leading to empowerment of the poor.

What, according to you, is the role of technology in financial inclusion? Technology is a great enabler for financial inclusion. Technology can take financial inclusion to the remotest areas across the length and breadth of the country. It is cost-effective to use technology for delivering various financial services. Opening bank branches in the remotest parts of the country is an expensive proposition. So, the Business Correspondent model is the best alternative for opening bank accounts there. Mobile banking, the next big phenomenon is again based on advanced technology. It helps in bringing down the cost of

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Banking

Sushil Muhnot

accounts must be seeded with Aadhaar to prevent bogus accounts. Aadhaar will also help in preventing all duplications.

How do you visualize the future of the banking industry in the coming times? The banking industry will undergo drastic changes in the next five years. If we visit a bank branch, we see transactions happening and the staff of the bank managing the transactions. In the coming five years, these transactions will be taking place outside the bank branches. Technology will be deeply ingrained in the banking system. There will be total elimination of human interface. Banking will transform from a transaction banking orientation to a sales and service orientation. The Bank of Maharashtra is preparing itself for this transition which will come sooner than later. Sometime back, we introduced the concept of Technology is a great enabler for financial â&#x20AC;&#x2DC;click to bankâ&#x20AC;&#x2122; for our customers. The essence of this initiative is to create an infrastructure where inclusion. Technology can take financial people can do transactions without human help. inclusion to the remotest areas across the It is a setup with an ATM, a cash deposit machine length and breadth of the country and a cheque deposit machine. At some places, we are also introducing kiosks. In order to reach out to the rural population, we are employing the operations and gives the same benefits to the customers as Business Correspondent (BC) model. in the bricks and mortar model. It is also creating a robust payment infrastructure that is equally important for successful implementation of PMJDY. Recently, Prime Minister Narendra Modi

How do you perceive the role of Aadhaar to give a boost to financial inclusion programme in the country? Aadhaar will play a critical role in financial inclusion. It will form the basis of all transactions. Further, all the bank

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expressed his vision for cashless banking. What is your view? It is possible for us to migrate to a cashless form of banking with every citizen having a bank account, RuPay card and with the help of mobile banking. This will help the process to be seamless as well as faster. ď Ž

Financial Services

Ashish Kumar Chauhan

Protecting Small Investors'

Interests For 140 Years BSE has been at the forefront of fund raising activities for the industry and protecting small minority investors for almost 140 years, Ashish Kumar Chauhan, MD & CEO, Bombay Stock Exchange (BSE), tells Kartik Sharma of Elets News Network (ENN)

BSE assumes a critical role in view of the Government of India’s stress on programmes like ‘Make in India’. How do you see the role of BSE in making India investor-friendly? There are various aspects which need to be taken care of if we wish to make India investor-friendly and raise its ranking from 142nd to 5th or so as an investor-friendly state. It requires a robust framework for providing transparency to the investors and a mechanism for the entrepreneurs to raise funds. India needs to create around 1.5 crore jobs annually for the coming 20 years, taking the number of new jobs to 30 crore. This can happen only if more and more new entrepreneurs come forward. Therefore, it is vital that funds are arranged for them through angel funding, venture capitalists, incubation and the main board. Therefore, we are working in all these areas. We are trying our best to ensure that no good project remains neglected. We have to create an ecosystem where these projects can flourish. BSE has been at the forefront as far as fund raising activities for the industry and protecting small minority investors are concerned for almost 140 years. So, this is the perfect time for BSE to find out what can it do for the country to nurture entrepreneurs. These entrepreneurs will create jobs in every walk of life. Out of $600 billion dollars of the country’s savings, almost 30 percent is saved. Out of this, hardly 10 percent is given to financial instruments like banks, mutual fund companies, micro finance etc. We need to educate people so that they go for formal finance and get better returns for themselves. We need to generate confidence among foreign investors to come and invest in India and protect minority investments. These measures are of utmost importance to the Government of India and the regulatory bodies. We need to instill confidence in them, so that they can park their money here. In the last 20 years, India has received only $225 billion investment and bought gold worth $200 billion in the last four years. We are expanding our gold holdings which are serving no purpose at all. The foreign investors have made small investments in India. Therefore, BSE assumes a primary role in raising those funds for the private sector and for the public sector, as also for the government.

According to many experts, lots of base activities are yet to be completed. So, when do you see the real action taking place? In recent past, the government has taken various measures, which include the PM’s Jan-Dhan Yojna, Ordinance in Land Reforms, Ordinance in Labour Laws, Clean Ganga Project, Swachh Bharat Abhiyan, Beti Bachao etc. Our society has some critical issues which need to be

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Financial Services

Ashish Kumar Chauhan

solved. Unless this happens, the commercial policies will not be fully effective. There were some loopholes in the system in the past. There were many policies which got the government nod, but no action followed. With the new government coming to power, a holistic approach for reforms has been adopted. There is a proper business framework in place now and the government has announced ordinances on the subjects of Insurance, Land Reforms etc. The challenges of the Indian society, such as contradictory archaic laws, red-tapism, etc., pose hindrances. The responsibility of reforms also lies with individuals or corporations, along with the government.

The concept of savings in India is at times restricted to household savings, or investments in gold, etc. How important is it to bring them in the banking fold? Including unbanked under the purview of bank has many advantages in modern-day economies. The western economies did it early enough. Technology must be adopted in the way money is handled, transactions, etc., are made. The Jan-Dhan Yojna will allow subsidies to be transferred directly into the bank accounts of beneficiaries. It will help in smooth movement of people across the country and nullify the role of intermediaries. It is a phenomenal concept. In my opinion, if we are able to bring 11.5 crore households in the banking mainstream, that itself will increase the GDP of India by one or two percent points within five years. This will happen as a result of bringing the hidden wealth into the mainstream and channelising the subsidies into a framework which is more

targeted. This will create a huge demand at the bottom of the pyramid which will create growth in consumer goods, need for infrastructure, housing etc. It can be a way to empower people.

What are the latest initiatives of BSE in terms of creating jobs, capital formation in India or creating formal finance? BSE conducts 2,500 programmes of investor awareness

India needs to create around 1.5 crore jobs annually for the coming 20 years... This can happen only if more and more new entrepreneurs come forward every year across the country and reaches out to 3.5 lakh people directly. We use the print medium to expand our reach of people, educating them about Dos and Donâ&#x20AC;&#x2122;ts of investments. BSE also has a training institute through which it awards certificates. We have also set up an SME segment, in which we have 83 companies listed. This is our effort to bring small and medium entrepreneurs to the mainstream. We are also expanding our range of work from just stock exchange to derivatives, equity derivatives and currency derivatives. According to us, the SME market creates the highest number of jobs for every crore rupees invested. ď Ž

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Banking

K Venkataraman

IT at the Core of Modern Banking The Karur Vysya Bank (KVB) has effectively blended IT with its services for providing customers a convenient and comfortable banking experience, says K Venkataraman, Managing Director & Chief Executive Officer of KVB, in an interaction with Poulami Chakraborty of Elets News Network (ENN) What is your view on Pradhan Mantri Jan-Dhan Yojana (PMJDY) and how effective has this initiative been with respect to the Indian economy? The Pradhan Mantri Jan-Dhan Yojana is a national mission encompassing an integrated approach to bring about comprehensive financial inclusion in the country. The scheme has been very effective towards bringing all the households in the banking mainstream by opening more than 11 crore accounts to date. This will augurs well for the Indian economy, since this will enable each household to save money in their account. Further these accounts will enable the government to route various subsidies directly to eligible beneficiaries, thereby, reducing the subsidy burden for the government by eliminating ineligible beneficiaries.

What initiatives has the Karur Vysya Bank undertaken as a financial institution to ensure successful implementation of the PMJDY programme? So far, our bank has implemented the financial inclusion

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Banking

K Venkataraman scheme in 117 villages as per the allocations received from the respective State Level Bankersâ&#x20AC;&#x2122; Committees (SLBC). Moreover, we are also implementing financial inclusion programme in 409 wards in urban areas under PMJDY. We are using the Business Correspondence model (Bank Mitra) for providing banking services to both villages and urban poor through handheld devices using smart card/RuPay Card. Under the scheme, we have so far opened around one lakh no-frill accounts with a total balance of `2.40 crore. All these account holders are provided with RuPay Cards, and 56 percent of the PMJDY accounts have already been linked with Aadhaar.

Information Technology has become an integral part of growth of any organisation. How efficiently has it been utilised in your areas of operation? Information Technology is definitely an integral part of any organisation, particularly the banks. All banking services are provided to the customer through extensive use of Information Technology. It has enabled more efficient delivery of services to customers and provided a vast range of convenient banking facilities. In our bank, we have effectively blended information technology with our services for providing customers a convenient and comfortable banking experience.

What technological innovations, according to you, are going to be introduced in the Indian banking sector in the next financial year or after that? With the number of tech-savvy customers increasing with each passing day, digital banking is going to be the future of banking, with mobile banking taking the lead sooner than later. Biometric authorisation for transactions will be the game changer as far as financial inclusion is concerned. With ever-increasing mobile device penetration in rural/ semi-urban areas, low-cost biometric-enabled devices would encourage people to migrate to cashless transactions.

What are the challenges that the industry is facing while operating in Tier II and Tier III cities? Connectivity and cost of bandwidth are the major constraints. However, with the present government pushing for digitisation, these challenges will be addressed in not too distant future.

Our bank has implemented the financial inclusion scheme in 117 villages as per the allocations received from the respective SLBCs, and we are also implementing financial inclusion programme in 409 wards in urban areas What initiatives, according to you, are ideal but yet to be taken for better implementation of financial inclusion programme? Though every household has been covered under the financial inclusion scheme, the next important initiative should be the financial literacy programme. Financial literacy is crucial for India, as it is a developing country riddled with poverty. It is also a must for promoting financial inclusion, which will ultimately lead to financial stability. In India, the need for financial literacy is more considering the low level of literacy among large sections of the population.

How can we solve the issue of poor ATM density in Tier II and Tier III cities, and how distant India is from becoming an entirely cashless economy? With the introduction of Cash Recycling ATMs, banks will be encouraged to extend the network in Tier II and III cities. As low-cost biometric devices are adopted, gradually people will move to cashless transactions. Connectivity is also going to improve in the days ahead and bandwidth cost is also sure to come down.

What measures should be taken to raise financial literacy among people in Tier II and III cities? Providing direct credit of all types of benefits into their accounts, providing a wider range of simple, cost-effective and convenient banking facilities and aggressively promoting financial literacy, especially focusing on the benefits of bank account operations, can make banking an inevitable part of the lives of the people of all strata of the society. ď Ž

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Banking

C V R Rajendran

Andhra Bank Offers

Banking for Gen-Next The idea of branchless banking will lead to a time when the customer will come to bank only for ancillary services like locker operations, says C V R Rajendran, Chairman & Managing Director, Andhra Bank, in conversation with Kartik Sharma & Sneha Mejari of Elets News Network (ENN)

enabling devices. Latest technological products, like opening of accounts through e-KYC, payments based on Aadhaar numbers etc., are available with Business Correspondents (BC). Our bank reigned supreme during September-December last year in opening accounts using e-KYC.

What are the different mediums used by the Andhra bank to ensure robust payment infrastructure and transactions? We have successfully implemented Aadhaar-enabled Payment System in all devices of Bank Mitras. Now, we are in the process of implementing payments using RuPay Cards, which will be completed in a fortnightâ&#x20AC;&#x2122;s time. At present, Bank Mitras are depending on smart cards, along with bio-metric authentication of the customer, for effecting payments/ getting receipts.

How is the bank contributing towards PMJDY? Andhra Bank is one of the pioneers in taking banking to villagers in remote areas using financial inclusion. What were the challenges faced by the bank in practising FI and how were those overcome? RBI gave permission for use of intermediaries for financial inclusion purposes way back in 2006. Since then our bank has in the forefront extending banking facilities at doorsteps of uncovered households in remote villages. With a view to transferring various government benefits directly to the accounts of customers, there has been a major thrust on financial inclusion. As per the directives of the government, our bank covered all the 1,149 allotted villages with over 2000 population before March 2012. Initially, intermediaries faced problems in appointing Bank Mitras due to lack of awareness. However, intermediaries, in association with banks, have now trained the Bank Mitras and stabilised financial inclusion activities.

How is Andhra Bank leveraging technology for financial inclusion? We have utilised ICT-based technologies for implementing financial inclusion. Further, we had engaged end-to-end solutions like providing hardware and software to the service providers to install financial inclusion

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Out of 11.50 crore accounts opened throughout the banking sector industry under PMJDY since 15.08.2014, our bank opened 16.65 lakh accounts, covering all uncovered households in the allotted villages/ wards within the stipulated time, until 31.12.2014. We have issued RuPay Cards to all the 16.65 lakh account holders except minors. As a measure to popularise financial literacy among villagers, we are conducting magic shows and literacy camps at selected locations. We are releasing press releases duly highlighting the usage of RuPay cards for getting the `1 lakh accidental insurance coverage and advising account holders to operate the accounts at least once in 45 days.

Please share your vision on the future of banking services in India. With the advent of internet banking and mobile banking, the concept of branch banking has given way to branchless banking. The present day new-gen customers do not want to visit bank branches and spend time at bank counters. The day is not far when customers will come to branch only for ancillary services, like locker operations, as their credit needs will also be taken care of through technology. Today, various means of reaching out to customers, such as mobile phone or BCs, do not mean much in terms of physical proximity to him. What is important is technological proximity, or proximity via BCs. To this end, RBI has liberalised the norms on BCs to encourage banks and mobile companies to form alliances and start the process of licensing payment banks. In order to improve public services, especially targeted at the poor, financial inclusion has a pivotal role to play, which is going to be an important part of future government policies and RBIâ&#x20AC;&#x2122;s plans in the coming years. ď Ž

Insurance

Bhargav Dasgupta

FI Way to Banking, Insurance Synergy PMJDY holds great promise for the insurance industry, as the sector has faced challenges in reaching out to micro markets in a cost-effective manner, says Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance Co Ltd, in conversation with Rachita Jha of Elets News Network (ENN)

compared to other developed and BRIC countries. This kind of opportunity keeps us excited always as the market is still under penetrated. The economic progress increases per capita income and that always results in higher penetration into the insurance sector. Global studies have showed it. That is why we are very optimistic about the growth in the penetration level. Our focus has been to serve our customers in a sustainable and stable way, as well as making our business models viable. By putting in efforts in analytics for risk selection and by using technology, we are always trying to make the business viable. We believe in technology and we are by far ahead of others in terms of online insurance sector. We are also focusing on using the mobile space.

How much of innovations are taking place in backend to create products in terms of crop insurance, health insurance,etc?

Give us an overview of the insurance industry in India and ICICI Lombardâ&#x20AC;&#x2122;s position. It has been 15 years since the insurance industry opened up. It is more than `80,000 crore industry and showed healthy growth over the years. Only in the last year, growth saw a little slow pace. I think opportunity is huge. In terms of penetration and global scenario, in India, it is still less

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In the last five years or so, maximum number of innovations have taken place in this area in reference to the insurance sector. Let me give you an example of crop insurance. The traditional crop insurance, that was prevalent, basically was more about claim reimbursement product. But it was a time consuming process. sICICI Lombard brought in parameterized weather insurance. This was one of our innovations. It started ten years back, but gained steam in last five years. It is based on correlation and we analyze the pattern of rainfall in a particular area. So if the rainfall is less than 20 percent, one automatically gets 50 percent of the claim. It has made the cash flow much faster. It is a big innovation in respect to crop insurance.

Insurance

Bhargav Dasgupta In the field of health insurance, I must say that the Rashtriya Swasthya Bima Yojana(RSBY) initiative was a remarkable innovation which has been globally recognized as a brilliant social insurance scheme. It is an innovative way of looking at health insurance.

Vision followed by action. This seems to be the mantra for the new government. “Pradhan Mantri Jan Dhan Yojana (PMJDY)” has helped the new government to open record numbers of bank accounts in short span of time. Where do you see the entire program going forward and how insurance sector can play the role of an effective partner in Government of India’s new vision for financial inclusion? It is an amazing development in terms of penetration that has been done by PMJDY. This is a very important first step for effective financial inclusion and getting more people to be included in the commercial banking eco system as one cannot do anything without the banking element in it. That is the foundation for any kind of financial services. I think that the initial efforts will focus more on remittances, DBT and getting these accounts transactional. There is huge scope for the insurance sector thereafter. In past, we have faced challenges in terms of distribution (as in reaching out to the micro markets) in a cost effective manner particularly in rural markets and in terms of payments. There are lots of challenges when we deal with cash mode of payments. If we can make a system of payment through banking eco system, it will make all of our tasks easier. So together all of these make a strong foundation for insurance sector. It was announced that the customers will be given insurance when they open new bank accounts under PMJDY program. It has made the account opening prospect more attractive. But I am seeing the larger opportunities thereafter. With the banks opening these kinds of accounts, it will bring opportunity for us also to work with them closely. I must admit that in the last few years, the government has really made a healthy progress in terms of social insurance. People who are staying below the poverty line, the biggest day-to-day worry for them is livelihood and post livelihood span. People first think about some sort of micro savings, thereafter, they take a step with regard to insurance.Studies show that micro insurances are very important element for the long term economic stability for the poor section of the society. Social insurance plays an important role in this scenario, where usually the government steps in with some amount of premium subsidy and the balance is paid by the individual and the insurance companies can then go and distribute their products.

So I am looking at that entire roadmap and that is why I am saying that PMJDY is a positive first step.

Do you think that it is viable for your organization to partner with banks rather than following a standalone distribution model? We always focus on doing things in partnership. The entire crops insurance sector, where ICICI Lombard plays a big role, most of the distribution is done through cooperative banks and that is the biggest channel of distribution. Oth-

It was announced that the customers will be given insurance when they open new bank accounts under PMJDY program. It has made the account opening prospect more attractive erwise the cost of distribution will increase. New models of distributions are also evolving. Insurance Regulatory and Development Authority of India (IRDA) has allowed Common Services Centers (CSCs) to distribute simple insurance policies. It is still early days and we have to see how it scales up. On the other hand, cash management and payment mechanism system is getting Philip as it is being done through banking eco system. I think that the payment part in the insurance sector is moving towards more on cashless transactions mode and even on the claim side, some of the social insurance policies are largely cashless.

What is your expectation from the State government to help increase the penetration index in terms of crop insurance, health insurance and other forms of insurances? I think that the government should continue to focus on the entire economic growth of the state. Insurance follows economic growth. On the other hand, insurance on catastrophe and insurance for those sections of the society, who focuses more on livelihood first, should be emphasised too. 

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Banking Technology N Jambunathan

Biometric-Enabled Mobile Banking Is The Future At a time when the State Bank of India plans to invest heavily into technology to beat competition from the private sector banks, N Jambunathan, Deputy Managing Director and Chief Information Officer, SBI, in conversation with Kartik Sharma of Elets News Network (ENN) talks about the past achievements, present-day needs and future course of the largest public sector bank Starting off as a Probationary Officer in 1978, you have had a long inning with SBI. How do you see the future of banking Industry in India?

Donâ&#x20AC;&#x2122;t you think that the available infrastructure with the banks to accomplish this task is grossly inadequate?

When we started banking 35 years back, it was entirely manual. But in the last 10 years, since 2002-03, banks have invested heavily in technology and channel partners. Also, banks have created infrastructure in the form of channel partners, ATMs, internet banking, mobile banking, etc. In future, bank transactions will rise exponentially. In the recent past, because of government subsidies, additional 8-9 lakh transactions have been added to the SBI data. When all government payments will be made electronically and more people are added to the workforce, number of volumes of accounts and transactions will shoot up. The banks need to gear up for this volume of work.

No, SBI has enough scalable infrastructure model to handle this pressure. At present, we have 55,000 ATMs and can manage 80,000 ATMs easily. With regard to our core banking, it is a modular structure. We are benchmarked for handling 1 billion accounts.

You have branches in the rural and remotest areas in the country. What type of challenges do you face in handling these accounts? The main challenge in rural India is lack of communication infrastructure. Even in SBI, around 3,000 branches are connected through VSAT. VSAT is slow, as it has very limited bandwidth. So, we need to take our digitisation further and get lease line connectivity. As the upgradation of these twothree thousand branches will happen simultaneously, newer branches will remain crippled due to poor infrastructure. This is one big issue that requires to be addressed. In rural India and other far-flung areas, distance is a concern...it renders rural branches unapproachable.

Is hardware maintenance an issue? Yes, hardware maintenance is an issue in rural areas. In case of breakdown of an ATM, it cannot be repaired for two-three hours. First, a technician has to visit the location and find the fault there and then will report back to solve the problem. This way, it takes too much downtime in rural areas in getting a banking device repaired.

Can you throw some light on the recent IT tool deployments that have brought about significant changes? SBI recently started InTouch branches at 67 locations. These branches are completely digitised and ensure that all the tasks of bank account opening, personalised internet banking, personalised debit card, etc., are accomplished in 10-15 minutes. We also provide opportunities to customers

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Banking Technology

N Jambunathan

to check that the financial tools for loans and other service are available to them. There are also remote web centres, where SMEs (subject matter experts) on products as personal loan and home loan can be consulted. In general banking branches, we can’t offer experts for all the banking products. However, at inTouch branches, video chat option is available. Recently, at some branches, passbook printers were installed for the customers, so that they do not have to depend on any bank assistant for the passbook printing.

You just now talked of kiosk banking. Is it a success at SBI? Originally, we started with small mobile-like devices. But later, the prices of PCs came down and communication improved with 2G. It was initially thought that full-fledged PC-based systems can help in financial inclusion. So, we started with the kiosks with limited facilities. But now there are Internet-based kiosks in branches, where you can do a lot of transactions. You can carry out 15 to 16 personal banking transactions, easily. Internet-based mobile devices also work as micro kiosks that can serve four-five villages in the coming times. Mobile devices with biometric facility are the future of banking.

Is biometric facility already available in the kiosks? Yes, biometric is already there in the kiosks. However, tablets needed to be integrated with biometric facility. As tablets are handheld devices easy to carry, those are the best suited devices for the banking needs of the future.

There are lots of accounts, transactions and data. Is the technology like Big Data relevant for handling those data in the future? Big Data will be used internally for decision making and externally for doing business. SBI is doing a Big Data project for data warehousing with a huge investment. The bank has invested in the server hardware on trial basis for data analysis. The bank is also participating actively on the social media platforms like Facebook, Youtube and Twitter. Lots of information is there, which will be analysed for future use.

With so much happening online in the banking sector, do you think, there is a security issue? Most of the online activities are password-based, which in turn are mobile phone-dependent. As long as you don’t lose your mobile phone, your transaction is secure. With respect to fund transfers, there are strict norms and procedures, so it is not easy to breach security.

With the advent of new technologies, the regulatory environment in banking is also

changing. Do you see any change in the role of CIOs in the new environment? The role of CIOs has changed several times. They should lead the business in IT activities. The relation between information technology and business should be of cooperation. The IT should be enabler and knowledge partner for the business. IT analyses the data and we will use it for the growth of banking business. In present circumstances, a CIO must know his role and duties, otherwise, he will remain only an IT solution provider.

The Government of India has launched a Financial Inclusion programme, called PMJDY. How do you envisage the role of SBI in promoting PMJDY? SBI has opened more than two crore accounts under the Pradhan Mantri Jan-Dhan Yojana. It is a good scheme that targets subsidies and assures banks of better deposits. In the entire banking sector, around 30 lakh bank subsidies are taking place currently. Other subsidies, when transferred to banks, will play an important role in enriching bank coffers. PMJDY is a good scheme and will generate good number of deposits and transactions for the banks.

What role do you see for the private sector towards expansion of financial inclusion in the country? They have opened very limited number of accounts...only 25

SBI has opened more than two crore accounts under the Pradhan Mantri Jan-Dhan Yojana. It is a good scheme that targets subsidies and assures banks of better deposits lakh accounts. There should be provision for penal action— like slapping of extra taxes—against the institutions, which do not help in promoting financial inclusion. There should be a level playing field.

When do you think India will see complete and comprehensive financial inclusion? Most of the people will have back accounts by the end of January. But, when the people will become financially literate and be able to invest appropriately in different financial products like insurance, loans, etc., they will be financially included in the true sense. Nonetheless, it will take two to three years to make people financially aware and make the society financially inclusive. 

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Inclusion

Subrata Gupta

Financial

Literacy Must

for PMJDY Success

The Pradhan Mantri Jan-Dhan Yojana is a landmark achievement of the government, but the challenge is to keep those accounts operational, observes Subrata Gupta, Chief General Manager, NABARD, in an interaction with Kartik Sharma of Elets News Network (ENN)

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The Government in India has given a push to financial inclusion drive. Do you think we have enough infrastructure to support the programme? Pradhan Mantri Jan-Dhan Yojana (PMJDY), initiated by the NDA Government, has moved things to the next level. It doesnâ&#x20AC;&#x2122;t mean that the previous governments did not make any efforts towards it. However, the banking sector has certainly evolved over the last few months with the opening of more than 11 crore accounts under PMJDY.

Inclusion

Subrata Gupta But somehow, not much financial transaction is happening in these accounts, so there is a need to modify to keep the accounts active. Through Direct Benefit Transfer (DBT), at least once in 45 days, these accounts should be kept operational. If the accounts are active, we will not have enough financial outlets to serve all the accounts. Although the programme started by Prime Minister Narendra Modi with a noble intention, insufficient number of ATMs and micro-ATMs to cater to such a huge population is another important issue. It can only be resolved by setting up new ATMs, micro ATMs, and commercial banks.

As PMJDY has received overwhelming support, with the states also participating enthusiastically in the initiative, what do you think is the next step in this direction? DBT is the next step. The accounts are going to be Aadhaar-linked. Once the accounts are Aadhaar-linked, the DBT will start flowing into these accounts. As most of the people are below the poverty line, they require some subsidy in the form of cash transfers. So, some money needs to be transferred into those accounts. By the way, the LPG subsidy has started reaching directly into these accounts since 16th January. Another advantage of PMJDY is overdraft facility up to Rs5,000. After observing the banking behaviour of a person, he can be provided the money, and if he returns the money on time, his banking credentials can increase and become eligible for higher loans. With good credit history, banks would have better opportunities to do business with those account holders.

The urban population is familiar with the bank services, but how will you make rural population financially literate? Financial literacy is a big challenge in India, but not as big as it appears to be. Even in rural India, people save money in traditional manner and that saved money is utilised in times of need. To avail the insurance benefits, it is advisable to those cwho have opened accounts under PMJDY to do transaction once in 45 days. One lakh cadres are to be trained through CSC (Common Services Centres). With the surge observed in the number of accounts, the need for financial literacy is being acutely felt.

What is the role for co-operative banks in PMJDY? Co-operative banks are not restricted from issuing the cards. They are participating in the financial inclusion drive, though their visibility is low.

Self Help Groups (SHGs) also come under the purview of PMGDY? SHGs are different from PMJDY. The motive of SHG movement was completely different from PMJDY. They have the goal of empowering the people at the grass root level. SHG enable them to access the financial services at any point of time at lesser costs of operation and self help. PMJDY is more of a technology-oriented entity, where there are cards, micro-ATMs, servers and other technologies involved. It is more of an individualistic approach. SHGs do not stop the members from opening individual accounts. An SHG member can operate on both individual as well as group accounts, simultaneously.

With reference to the role of co-operative organisations in PMJDY, there is still lot of awareness yet to be raised. What is your opinion? Yes, the transactions of co-operative bodies are going to be digitised very soon. Once banks are able to do e-track-

Financial literacy is a big challenge in India, but not as big as it appears to be. Even in rural India, people save money in traditional manner and that saved money is utilised in times of need ing of the SHG transactions, it will become accessible to every branch manger. Then they would know who is doing what. And, once SHG accounts are linked with Aadhaar, it would be easier for others to know the activities of an SHG member.

PM Modi has advocated in favour of cashless society. What do you think about it and what are its challenges? I will be very happy if this happens. However, the tendency towards hoarding black money is one big challenge. Apart from that, having touch points at every place and spot is also an important issue.

How do you visualise the situation when schemes like PMJDY will be truly realised and be in full flow? After opening of the account, other issues like issuance of cards on time, etc., will have to be fixed. It will take one-to-two years when all the accounts opened under the scheme will be settled and will start proper banking activities. ď Ž

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IT in Banking Ajit Rath

Technology Driving Financial Inclusion Technology is serving as a vehicle to reach out to the financially excluded people living in the remote areas, says Ajit Rath, General Manager-IT, Union Bank of India, in an interaction with Kartik Sharma & Sneha Mejari of Elets News Network (ENN) How the Union Bank of India is leveraging technology in expanding financial inclusion? The Union Bank of India (UBI) is the front-runner in technology implementation in the field of last-mile and backend connectivity. For last-mile connectivity, we have tied up with many technology solutions providers. They are technology-cum-banking correspondents in the field, who provide either biometric-based technology or the RuPay Card-based one. As we provide biometric cards that are authenticated on micro-ATMs, the cash transaction is done. We have been providing all these services even before the start of Direct Benefit Transfer (DBT) scheme. After the DBT guidelines from the Department of Financial Services (DFS), we converted the micro-ATM technology into RuPay Cards. For converting micro-ATM technology into RuPay

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Cards, we have used a PIN-based authorisation. The data was tested by putting the application on micro-ATMs and making the PIN micro-ATM compliant. At the back end, we have the ATM switch that we have already given to 2.5 crore customers. FI gateway is responsible for routing the FI transactions to our servers and other technologies for authentication. As a customer swipes a RuPay Card, the transaction is routed to the FI server. Thereafter, it goes to the ATM server, and a PIN-based transaction is generated. It is then directed to the core banking. That is how last-mile as well as back-end connectivity works.

The number of ATM transactions is increasing with each passing day. What type of innovations do you foresee in the ATM technology in future? ATMs today are serving a major chunk of the customer

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IT in Banking Ajit Rath

tions is not very high, therefore, the number of ATMs is on the rise.

The Government of India has started an ambitious financial inclusion programme — PMJDY. What role do you see for IT in reaching out to the unbanked lot?

base. Since 2007-08, the number of ATMs has risen manifold. UBI alone boasts of as many as 20,000 ATMs catering to our customers through 4,000 branches. India is a vast country, and in spite of there being over 1.5 lakh ATMs, there is still huge scope to open more in different parts of the country.

The success of Pradhan Mantri JanDhan Yojana (PMJDY) is heavily dependent on the use of information technology. Without proper implementation of IT tools, it will be difficult for the banks to reach out to the financially excluded masses residing in the distant areas of the country. It was only after the onset of IT times that the last-mile connectivity could became a reality. With the deployment of right type of telecom network and hardware gizmos like GPRS, it has become possible to bring the unbanked people in the remote areas into the banking mainstream. Before PMJDY, standardisation was lacking in biometric and other types of transactions. Ever since the implementation of RuPay Cards and PMJDY scheme, the standardisation has been put in place. In our country, where everyone is number literate, even if one cannot read or write, one is capable of entering a PIN number for transactions. Thus, IT has made it possible for every person to take benefits of from the new-age banking system.

The Union Bank of India alone boasts as many as 20,000 ATMs catering to our customers through 4,000 branches...in spite of there being over 1.5 lakh ATMs, there is still huge scope to open more An ATM has two capabilities, first it can dispense cash, and secondly, it is enabled for doing online transactions. India is a cash-oriented society, as most of the transactions—nearly 86 percent, take place in the form of cash. The trend is, however, likely to continue for some time to come, until people fully embrace online transactions. If we compare India with European countries, it has a lot of potential to increase its e-transactions, which will push the financial inclusion further. The Business Correspondents and merchants have also been roped into cashless transactions mode. Therefore, we are capable of heading towards a cashless society, which will eventually bring down the number of ATMs. However, as of now, the number of cashless transac-

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How do you envision Indian banking industry five years from now, and what would be the role of IT in developing Indian banking sector?

For the last one decade, we are witnessing an increasing use and penetration of IT into the banking sector. We have seen deployment of IT in banks, starting from core baking processing and further easing complexities of payment gateways, connecting with application solutions and third-party database for payment verification as credit scores from CIBIL etc. Most of the transactions are done online; even the cheques get cleared through an automated process. The user is fast getting acquainted with the system. In addition to it, the digital certificate and such approvals have gone online, thus, integrating various organisations. Also, PMJDY and payment banks offer even better opportunities, as Business Correspondents and merchant bankers are expanding banking infrastructure. All this can help banks improve their efficiency and reduce operational costs. 

IT in Banking

Usha Menon

Banking Sector Soars High on IT

The present-day banking has turned technology-driven, and without technology, many innovative services would not reach people, Usha Menon, General Manager - IT, Central Bank of India, tells Poulami Chakraborti of Elets News Network (ENN) What is your perspective on PMJDY? What initiatives have been taken in this direction by the Central Bank of India? The Pradhan Mantri Jan Dhan Yojana (PMJDY) announced by the government states that each household in the country needs to be financially included by opening at least one bank account per household and they are to be provided with RuPay debit cards. Initiating projects on mission mode by the government definitely gives an impetus, especially when it is declared by Honâ&#x20AC;&#x2122;ble Prime Minister on the Independence Day. While bank accounts have been opened under financial inclusion plan for the last couple of years, the accounts opened this year are phenomenal. Till Jan 26, 2015, banking benefits under PMJDY reached around 11.5 crore people. To achieve this goal, every bank has facilitated USBs, BCs with hand-held devices, ATMs etc. This is a very positive step taken by the government. The benefits of both Banking and Insurance are provided to the unbanked customers. The Central Bank has also opened accounts in all allotted areas with a view to cover all households at such locations. Cards are being issued to all such account holders and technology platform is geared up to enable all touch points to enable the customers to transact. The bank has proactively opened more than 40 lakh accounts exceeding the target assigned. A recordbreaking 35 lakh debit cards were issued within a period of three months. Besides, customer awareness camps were organised throughout the country.

IT has been adopted across sectors in India. How vigorously it has been implemented in the banking sector? The banking industry has adopted every technological innovation in hardware, software and networking. The entire banking is now technology-driven and without technology many innovative services would not have been possible. Banks boast of one of the best-in-class Data Cen-

ters (DCs) and DR sites. We have moved to paperless work in many areas. Our DCs and DRs are ISO certified for Information Security and Business Continuity.

What new IT initiatives is the Central Bank of India going to take in the days ahead? We expect that initiatives will be more in delivery channel products. With the issuance of debit cards, all customers will be in a position to access the ATMs/kiosks, etc. Since mobile banking is coming up in a huge manner, banks are introducing value added services like Passbook on Mobile, IMPS etc. Social media is also being considered as an option by banks for transacting business.

According to you, what should be the benchmark for the industry for adopting best IT infrastructure and practices? Ensuring that the IT Infrastructure set up is totally compliant to the best practices in the industry is essential. Governance is taken up with utmost priority by banks to provide safe banking to the customers.

What are the challenges that your department faced while implementing IT initiatives in Tier II and Tier III cities? Basic infrastructural issues like unavailability of electricity, inadequate network, lack of support systems and basic amenities etc., are the biggest challenges. These get worsened during adverse weather conditions.

Low ATM density in Tier II cities has posed a severe challenge. What can be done to provide seamless service to people in such areas? Providing basic infrastructure is essential. Promoting White Label ATMs (WLAs) may be an option. ATMs installation on a shared basis may also work considering the high capital involved and the challenge of low hits. ď Ž

The Central Bank of India has opened more than 40 lakh accounts exceeding the target assigned and issued a recordbreaking 35 lakh debit cards within a period of three months

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Security

LT Col Rohit Shukla

Giving Security Cover to Financial Institutions In the age of cyber attacks, adoption of Resilience, Deterrence, Intelligence and Mitigation (RDIM) mechanism is the way forward to ensure physical security of financial institutions, writes Rohit Shukla, Chief Security Officer, IDBI Bank For instance, physically the site must be located in busy areas, close to law enforcement agencies, architecturally designed not to allow quick-paced movement, should have multiple ingress points etc. Similarly, normatively, such sites should stress on minimisation of cash transfer, create multiple strong points for storing cash and cultivate a culture of description amongst its employees, thus making it hard for a casual observer to learn its functions through surveillance. For deterrence, sites should employ a mixture of real and fake security measures to deter the would-be attackers, yet be cost-effective. These might include dummy surveillance cameras, fake weapons and boards, which claim security measures that may, in fact, not be in place.

ith issues like cyber security emerging on the scene, it is easy to forget that the primary threat for any financial institution is to its physical security. A physical attack is not only the easiest way to obtain an institution’s valuable assets and its data, but it also attracts terrorists, which a slow-moving, secret cyber-attack simply cannot prevent. With fast expansion of physical sites of the industry in the form of new branches and ATMs, concerns about their security have become all the more pertinent, as it may not be financially viable to ensure blanket security cover for every site. So, the need of the hour is that of a hybrid strategy for the security systems that would protect such institutions. An apt strategy to tackle the menace would be RDIM—Resilience, Deterrence, Intelligence and Mitigation mechanism.

Resilience & Deterrence Under the mechanism, certain security measures should be in-built in the system to ensure that every site can withstand a physical attack and remains capable of resuming its function after an attack incurring minimum damage. Some of these strategies are physical and some more normative.

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Intelligence & Mitigation Employees of the sites should be provided extensive training to provide counter-surveillance against any potential assailant. The greatest preventive measure against an attack is alertness and looking out for surveillance. Surveillance is an integral part of the planning process for almost any type of attack. The primary objective of surveillance is to assess a potential target for value, security measures and vulnerabilities. It is one of the weakest points in an attack cycle and the one which can be easily detected. Given that surveillance is a complex tradecraft requiring years of practice and training, the would-be attackers are almost always bad at it, making it easy to identify them. While there are several complex principles involved in detecting surveillance, in its core, it simply means looking out for a person, who doesn’t belong, doing things that he shouldn’t be doing. Finally, if an attack happens, the security system should be able to mitigate the damage. Accordingly, the site should have appropriate elements like ‘safe rooms’ for the employees and customers to hide in. Further, they should be trained in appropriate responses in case of an attack as well as in the leadership techniques to calm the customers. 

Corporate

Sukesh Jain

Offering New-Age

Banking Experience Samsung can help BFSI sector meet the growing demands of digitally-savvy customers by providing the ‘New Finance Experience’, says Sukesh Jain, Vice President, Enterprise Business Division, Samsung India, in conversation with Souvik Goswami of Elets News Network (ENN)

BFSI is one of our focussed industry verticals, with dedicated teams working on providing banking and insurance institutions with an integrated, multi-channel and interactive experience that appeal to today's empowered customers. Samsung can help the BFSI sector meet the growing demands of digitally-savvy customers by providing a ‘New Finance Experience’, wherein branch experience can be enhanced with digital services, work efficiency and operations can be improved with digital solutions, and sales representatives in the field can be empowered with secure mobile solutions like Samsung KNOX for secure access to documents while on move.

What kind of opportunities India offers for Samsung with regard to the BFSI sector? Increasingly, customers are demanding convenience and flexibility for any kind of services they consume. Even for banking, they prefer to have services at a time and place convenient to them. Rising consumer aspirations, emergence of new private banks and government’s push to financial inclusion are driving banking services to Class B and C cities and beyond. In fact, India is undergoing a digital revolution. We at Samsung believe that these are powerful trends and we are uniquely positioned as a leading consumer brand and technology company to offer financial institutions end-to-end devices and solution offerings to get that first mover advantage.

Give us an overview of Samsung’s operations in the BFSI sector. Samsung Enterprise Business caters to the B2B customers globally with a vast portfolio of products like smartphones and tablets. Besides, the company is also known for professional displays, printers, memory and system air conditioning. We provide smart offerings encompassing these devices and solutions tailor-made for all business needs, solutions that help you move information efficiently and securely, solutions that integrate technology with relevant industries for a smarter ecosystem and facilitate necessary collaboration.

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Shed some light on Samsung’s solutions and services for the banking industry. Samsung works on multiple fronts with its banking customers to provide new-age services to customers, be it in-branch services or mobile-based banking operations. For in-branch services, Samsung offers a digital and customer-centric experience with the help of our interactive professional displays, where customers can acquire information on various products, loan rates and special offers at Samsung interactive kiosks, run hypothetical portfolio

Corporate

Sukesh Jain simulations or seek financial advice remotely through a subject matter expert via video conferencing. This brings alive the concept of digital and self-service branches driving down cost of operations, and offers an engaging experience to the branch customers. With the current thrust on financial inclusion, Samsung has launched its ‘Chhota ATM’ or ‘Micro ATM’, which can be used to serve the rural population by bringing banking services to their doorstep through a Samsung tablet, handheld printer and scanner. For sales staff constantly out there in the field, we have solutions on mobile devices that make them more productive and efficient. For example, our eKYC solution helps financial institutions capture, store and process information faster and simplify procedures for customers. Lengthy and time-consuming procedures like Aadhaar authentication, verification of proof of identity and proof of address can now be made shorter and simpler with the help of innovative technology. Another solution is the Samsung e-Brochure, where a relationship manager can find customer information on a tablet on-the-go and prepare a proposal for him. On printing front, we have certain unique offerings like Samsung SecuThru™ — a secure solution that provides a safe printing environment for handling of confidential documents by ensuring that only authorised users have access to documents at the point of print. Also, being Samsung, one of our major advantages is unparalleled spread of service centres across the country.

Brief us about the eStamping project. We have a solution called eStamping, which is a project of the Central Government run by the Stock Holding Corporation India Limited. It is a process to replace physical stamp paper/ franking by a secure electronics and computer-based application of stamping documents. SHCIL software works with original toners and specific Samsung printer models for securely sending the encrypted information for verification on SHCIL servers and printing the e-stamp papers with tamper-proof holographic images.

As a global company, how can Samsung bring the global best models/solutions to India? We have a strong R&D setup in India which helps us customise global solutions as per our requirements here. Besides, it is our in-house solutions team that works directly with customers to build solutions locally. Banking-on-the-go is stalked by inherent data risks. How can Samsung help address the issue? As mobility becomes more prevalent, the risk on security

and data breaches increases exponentially. Samsung has introduced KNOX, which is an Android-based solution specifically designed to enhance security of the current open source Android platform. KNOX offers Cloud-based Mobile Device and Application Management for all Android and iOS devices. For customers looking for even higher level of security, we have KNOX Workspace, which is a manageable, on-device mobile security solution that works at kernel level securing your data right from hardware layer and upwards, unlike regular MDMs.

How can Samsung fit into the scheme of things with regard to the Government of India’s new financial inclusion programme? Samsung has a 3-point initiative to help the government realise the vision of ‘Bank Account for Every Indian’ — • Bringing banking services to every Indian: Samsung has integrated banking solutions in its devices and can offer a proposition from `4000 to 40,000 per device. Since most of these new accounts will be upcountry, we have set up the most comprehensive service network in the country for any service-related issues. • Innovation on integrated devices: We have integrated Aadhaar authentication with biometric capabilities of our devices. This reduces requirement to carry and service multiple devices.

We want to work with the banking industry to enable every Indian to have access to formal banking system and let them bank at their convenience with the help of technology • Ecosystem profitability: To make the Business Correspondent (BC) ecosystem viable, it has to be profitable and capable to offer multiple services. Samsung devices with integrated solutions give this opportunity as they enter Class B & C cities. With these innovative solutions coupled with our extensive service network, Samsung focusses on increasing operational efficiencies, reducing cost of operation and, most importantly, provide an engaging customer experience.

What is your vision for Samsung with respect to its India positioning? We have a very simple vision…we want to work with the banking industry to enable every Indian to have access to formal banking system and let them bank at their convenience with the help of technology. 

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Banking

P K CHOPHLA

SBOP: In the Forefront of

financial inclusion At a time, when the government is determined to achieve comprehensive financial inclusion in the country, there is an urgent need to make people banking and finance-literate, especially in Tier II and Tier III cities, observes P K Chophla, CGM & CVO, State Bank of Patiala, in an interaction with Elets News Network (ENN) What is your view on PMJDY? How effective has this initiative been, with respect to the Indian economy? PMJDY has been effective up to now as a drive to initiate higher level of financial inclusion (FI). Its impact on economy should be visible only in the medium term. This programme shall need hand-holding and constant monitoring to make it robust, sustainable and effective in positively impacting a large economy like ours where numbers are ‘skewed’ i.e. a large number of people (whom we are covering in PMJDY) have, as on the day, proportionately much less economic power translated into financial terms. Collectively, this class has the potential to be a powerful engine for participation in growth and prosperity after such initiatives are sustained for some time.

What are the initiatives, State Bank of Patiala as a Financial Institution has taken to emphasize on successful implementation of the PMJDY? SBOP has been in the forefront of PMJDY implementation in its core areas of operation. 10.73 lakh accounts have already been opened under this scheme and RuPay Debit Cards also issued in 96 percent cases. SBOP has started e-KYC facility to open an account by incentivising BCs by paying additional Rs5 for each accounts opened using e-KYC. Also, centralised data

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uploading is done for issuance of cards rather than each branch punching the request. This saves cost and time.

IT has become an integral part of growth story of any organisation? How efficiently has it been utilised in your sector? Utilisation of IT in various spheres of banking, like account management, risk management, financial management, etc., can bring efficiency to the entire banking ecosystem. The efficiency, if seen holistically, has been keeping pace with the changing environment.

What technological innovations do you see coming in the banking sector in the days ahead? There are several innovative plans – • Bharat Bill Payment System: BBPS is proposed to be a pan-India system for running the bills payment system in the country, which is an interoperable bill payment system for millions of customers in the country. • Trade Receivables Discounting System: TReDS aims at addressing concerns related to efficient financing options for the MSME segment, and eligible invoices and bills of MSMEs will be placed on the system for acceptance by the buyers. • Account Number Portability: Unique bank account

Banking

P K CHOPHLA numbers/reference numbers for customers may be issued in the future. • Interoperability and use of contextual technologies may be achieved by using different tech at, say, points of delivery, rather than sticking to same prescribed tech platform/ model to meet business objectives. • Cloud technology may be adopted for storage purposes. This will lead to efficiency in data storage/ access. Near-field Communication: NFC technology • may be used for payment system across usage domains.

What initiatives, do you think, are desirable but yet to be taken for a better picture of FI implementation?

SBOP has been in the forefront of PMJDY implementation in its core areas of operation. 10.73 lakh accounts have already been opened under this scheme and RuPay Debit Cards also issued in 96 percent cases

In my view, all subsidies linked to food, fertiliser, kerosene, etc., currently available through public distribution system (PDS), and old age pension should be routed through the beneficiaries’ accounts opened under PMJDY, which will reduce distribution overheads and impact more people. Besides, steps may be taken to quickly move towards a system where cost per transaction is ‘less’ at the POS, and other tech models. Volume rather than value-based charges on transactions would make the same economical for all — banks, customers and small retailers.

According to you, what challenges does the industry face while operating in Tier II and Tier III cities? Mainly, there are three basic issues — infrastructure, including power, transportation, data and related services, and trained manpower; cost issues in an open and competitive economy; and poor customer awareness and convenience.

How do you think this issue can be addressed? ATM density will soon cease to be an issue with the latest initiatives to have an ATM in each branch, besides offsite

ATMs, Brown Level and White Level ATMs, and payments through BCs. These initiatives are expected to take customers away from cash transactions.

What measures need to be taken to make people banking and finance-literate in Tier II and Tier III cities? The key to making people banking and finance-literate in Tier II and Tier III cities is communication – clear and regular, in a planned and systematic manner. For example, there should be clear customer segmentation to focus the relevant communication effectively. Further, students in all streams should be targeted first, possibly by incorporating the subject in their curriculum.

How far do you think we are from becoming a cashless economy? Becoming an entirely ‘cashless economy’ could prove to be a utopian thought. Even having a ‘less cash’ economy involves several issues, like cost per transaction, security, better communication infrastructure and customer awareness, among others. Those need to be addressed first. Given the current scenario, we are at least five to seven years away, as far as ‘small cash’ transactions are concerned. For all transactions, it may take a bit longer. 

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RNI NO - UPENG\2008\25234

UP/GBD - 71/2012-2014

Corporate

Arindam Mukherjee

Where There’s Banking

There’s Cisco We are forming partnerships with companies to develop technologies for better data analysis to make banking a high-tech experience, says Arindam Mukherjee, Vertical Head - Banking & Financial Services, Cisco India & SAARC, in an interaction with Rachita Jha of Elets News Network (ENN)

Most difficult times for the IT industry are behind now, and terms like business and expectations are becoming common these days. Do you think it is the right time to enter the BFSI sector? It is an exciting time in India for IT industry to explore and expand into the BFSI sector on account of two reasons: one is the tax structure and second, the BFSI sector is looking up in India. Technology in business process is causing revolution globally, especially in retailing like e-commerce and others. However, there is a different aspect to this technology revolution, too; it is playing a disruptive role in every big business’ conventional way of working. It took around 110 years

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for a phone to reach 1 billionth customer, 40 years for the television, internet took 12 years and for smartphone, it was barely seven years. So, the technology is expanding rapidly. It is the banking and insurance sector that would be hugely impacted by the nature of technology expansion. The proliferation of data is occurring in the market, as it is coming from multiple places and sources. A person can do banking from anywhere and with any device, thus making it difficult for banks to understand a consumer’s banking behavior.

How is technology expanding the banking sector in India? Technology has made banking data-driven. The person, who is sitting on the top of the things, can observe everything, ranging from data, devices to Cloud while carrying out a banking transaction. Since July last year, the new government has been putting in efforts to improve financial inclusion in the banking sector. Every senior executive in the industry dis-

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Arindam Mukherjee

cusses about the challenges of achieving the government’s goal. The infrastructure spend is the main challenge for banks to achieve this goal. For banking activities like customer acquisition and operations, technology would be used extensively. Hence, it is an exciting time to use technology in the expansion of banking sector in India.

What technology Cisco has been offering to banks and what other technologies you are planning to offer in future? Big Data and device proliferation are the technologies that will be coming to the forefront in the banking sector very soon. For example, a leading bank in Turkey is using a GPS-based location spotting application that offers a consumer better buying options at his location, while an augmented realty app used by the Bank of Australia covering 90 percent of Australia’s property offers suggestions. Cisco is betting on all such devices that can offer Big Data and is forming partnerships with companies for the development of this application for better data analysis and other technology requirements. Big Data is one area pushing technology expansion and the other is the world of devices. Remote advises, wealth advisor or video calling are the devices that will be used for communication in the BFSI sector in the coming times and will transform the banking methods. These devices would help a consumer avoid frequent visits to a bank branch by providing entire information instantly.

How are banking and financial institutions reacting to the new technology offerings sweeping their working environment? It has become very important for banking and financial institutions to use these new technologies to remain

in business and have a competitive edge. In future, banks would have a complete digital branch, enabling fully digitised transactions. To open an account in these branches, it would be mandatory for a consumer to have a mobile account. Niche boutique services is another core area that would be offered by banks, like payment banks, small banks, etc. Cisco will play an important role as a technology provider for the above-mentioned tech integration into banking ecosystem. Even today, in banks, if you are withdrawing money or doing any transaction, most of the time it is Cisco device through which it is accomplished. In banking sector, 99 percent of the devices used are Cisco devices, whether it is mobile device or ATMs. Data centers, branch offices, head offices – all run on Cisco devices.

How do you handle the security issues with respect to the services you offer to banking and other sectors? At present, while doing business, more people are getting engaged on mobile and digitally. In such circumstances, security has become a matter of paramount importance and is providing an environment of architecture play that is carefully crafted for various security needs of an organisation. Security depends on how fast and quickly you determine and prevent a breach from proliferating and expanding further. It is another big area of our focus on which we are working. It is possible with the help of a multiple set of architecture products, like inclusion products, network behavior

In banking sector, 99 percent of the devices used are Cisco devices, whether it is mobile device or ATMs. Data centers, branch offices, head offices – all run on Cisco devices analysis tools, firewalls, and web and e-mail security appliances. We are also planning to offer video service solutions, which are becoming increasingly popular with every passing day. Nobody wants to read the text, and they are preferring videos for advisories and suggestions for live demos, product reviews and consultancy services. In future, banking will be used through talking while seeing instead of talking while listening. So, Cisco is planning to enter the technology area, where video experience will be used for transforming consumer video experience into enterprise experience. 

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Corporate

Gaurav Vora

Safe Transit Cover

for Banking & Finance Sector

Tamper-proof envelopes and packaging is the core need for movement of high-value goods like credit cards and legal evidence material, says Gaurav Vora, Director, Dynaflex Private Ltd, in an interaction with Rachita Jha of Elets News Network (ENN)

What made you foray into the secure envelopes segment? We explored the gaps in the industry that required highend technology that is not easily available. We have a strong research and development setup and hence were ready to foray into specialised technology application. There was a gap in highly secured envelopes, as very few players globally do that business. Tamper-proof envelopes and packaging is the core need for movement of highvalue goods. Those are also required by police and law enforcement agencies, and banking and financial institutions. So, we decided to enter the product line of security envelopes with a strong backing of R&D and technology. We already have patents for some of our trademark technology. We can make our own machines and that gives us an edge to offer customised solutions for our customers.

relates to movement of cheque books, cards, storage of gold for loan against gold.

Can you tell us something about the technology and features of these security envelopes? In our tamper evidence envelopes, we have installed features that can suggest that someone has tampered the seal. It leaves an irreversible mark and gives evidence of tampering. Other security features includes tamper-evident closure, double seal, serial numbers for tracking, sequential barcoding, barcode and serial number in multiple directions and tear-off receipt with matching barcode. And, these can be used in all segments of banking and they are currently the largest user of this technology. We are already exporting to many other countries in the Middle East and Africa, among others.

Please share your future outlook with us. Please share with us your focus area in the BFSI sector. Our first request came for tamper-proof envelopes for delivery of credit cards, as there were many cases of magnetic information on cards being cloned while being couriered to customers. So, production of tamper-free envelopes for movement of credit cards was started by us. This was followed by delivery of cheque books in security envelopes, as there were high incidences of damage in transit. India is pre-dominantly a cash economy; the use of cards is miniscule. It will always have movement of cash. And, it is during movement of cash that maximum frauds occur globally and more so in India. So, for movement of cash, we will witness the largest area of application for tamper-proof envelopes. This is the area where we are working aggressively. So, in the banking sector, our role

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Banking and Finance sector has been a fast adopter of the technology, and we have a pro-active regulatory body that guards the interests of the citizens. The next sector to be a major adopter of security envelopes would be cashin-transit and they are waiting for guidelines to come from RBI for the same. This would include the holistic flow of cash either in banks or ATMs and any other place. It is very important that cash in transit is secured with the best technology. This is a very exciting project that we are waiting eagerly for. Once these guidelines are in place, we will be active in this space as well. That will be a big change in the sector. In terms of sectors beyond BFSI, we are looking at law enforcement in a big way and working very closely with the Ministry of Defence, CBI and other such authorities and forensic bureau. We are also working in the education sector and other classified applications. ď Ž

Corporate

Deepak Khosla

NIIT Eyes Share in

NeGP 2.0 Pie Having participated in a number of government projects, now the company has set its eyes on the projects heralding the next phase of eGovernance in India, Deepak Khosla, President - Asia & Australia, NIIT Technologies, tells Dr Ravi Gupta, Editor-in-Chief, eGov, and Souvik Goswami of Elets News Network (ENN). Excerpts from an interview NIIT Technologies has global footprint in several sectors. How do you think the Government of India can benefit from your global experience in use of IT? NIIT Technologies is a full-spectrum global IT solutions company addressing client requirements across various continents like America, Europe, the Middle East, Asia and Australia. Our service offerings encompass Application Development and Maintenance (ADM), Infrastructure Management Services (IMS), Digital Services and Business Process Management (BPM). We have supported many global organisations in using Information Technology effectively to enhance productivity and reduce costs. Our global knowledge and local market expertise across focussed verticals have been leveraged extensively for critical projects for the Government of India. One such project was the implementation of an e-Auction platform for the India Tobacco Board. In this project, we brought together our ADM and IMS knowledge on one platform. Our e-auction platform helped the board to come up with a unique outcomebased pricing model, which sets a classic example of bringing our overall expertise to India. We have been successful in customising our platform for procurement and auction developed in Singapore for India. Worldwide, we have strong capabilities in SAP as well. Thus, we have come up with this mastery in India in specific areas, such as public finance management, sales tax, etc. These are new-dimension products of SAP and we

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Deepak Khosla are one of the few partners in Asia who have successfully implemented them for various organisations.

Tell us more about NIIT Technologies’ capabilities in the area of public finance and the way it has impacted government efficiency as well as citizen transactions. There are two areas where we are seeing lots of initiatives being undertaken by the Government of India: one is for bringing reforms and transparency in managing finance, and the other, towards efficiency enhancement. A Comprehensive Financial Management System (CFMS) programme is being run across several states in the country. We have taken a modular approach for implementing CFMS. Partnering with SAP, NIIT Technologies has developed a Futuristic Enterprise Class solution intended to streamline and modernise the management of the state's finances. It is a decision support system that ushers in effectiveness, efficiency, transparency and accountability in the public finance management system across the verticals in a state; it is an integrated finance and expenditure module starting from treasury to wages. CFMS is a transformational programme with a significant programme size and magnitude.

The Government of India is talking about implementing IT on a large scale for better governance. How, according to you, the government can partner with the private sector to benefit from their skills? In my opinion, the government, along with private companies, needs to collaborate more to increase efficiency. We need lots of change drivers within the government to lead and push any initiative to its logical conclusion.

There is much talk about NeGP 2.0. What is this programme all about and how can a company like NIIT Technologies play a role in it? NeGP 2.0 is a programme that aims to take eGovernance in the country to the next level by implementing new-age technologies and platforms. Moreover, it attempts to replicate previous best practices, thereby, creating more synergy among various departments and ministries. NIIT Technologies can play a vital role in this programme with our proficiency in various domains, including Smart Cities, Public Finance, Commercial Taxes/ GST, e-Municipality, GIS and Analytics, Crime and Criminal Tracking Network and Systems - CCTNS 2.0 (SMAC Integration & Smart Policing) and ERP in states/PSUs.

Do you think that the ‘Digital India’ campaign will help in this? Change is always difficult. We have to recognise that it

won’t be easy to shift from a manual way of working to completely dive into technology. In this context, let me remind you about a 25-year-old scenario when there were strong protests against computerisation. Imagine today’s banking industry without computers and technology! Today, we are at a different stage where we witness multiple challenges that need to be addressed, keeping change in mind. These challenges cannot be buttonholed by the vendor and requires government intervention.

Do you think that Indian companies as a whole have done enough to sensitise the government machinery on the benefits of usage of IT? I think awareness is there and we can see people at the top being guided by vision. However, the challenge is to see the vision getting translated into reality. It is a standard

There are two areas where we are seeing lots of initiatives being undertaken by the Government of India: one is for bringing reforms and transparency in managing finance, and the other, towards efficiency enhancement example of vision versus execution. Hence, I feel that there should be more awareness and workshops should be held in a more participative and collaborative manner. If we take examples from other countries, we can see that public-private partnerships have been more collaborative in nature.

What is your suggestion for a magazine like eGov, which can play a pivotal role in creating awareness on eGovernance in the country? I think the eGov magazine is positioned uniquely and can play a huge part as a change agent with its wide readership. 

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Corporate

Amit Chowdry

Visual Banking Twist to BFSI As BFSI industry goes on an uptrend, spending lavishly on IT solutions, company’s innovative offerings see a huge acceptability in the sector, Amit Chowdry, CEO, PeopleLink, tells Rachita Jha of Elets News Network (ENN)

as well as private sector banks are underlining the importance of technology infrastructure in order to improve customer experience and gain a competitive edge. Cashing in on the popularity of internet and mobile banking, banks are increasingly adopting various enterprise grade IT solutions to achieve a larger coverage and true financial inclusion.

What is your outlook for the BFSI sector? India is a fast growing IT market and the BFSI vertical contributes 11.1 percent of the total Rs30.4 billion domestic IT spend. This vertical has been on a growth trajectory with its innovative products and platforms such as mobile banking, rapid geographic expansion plans, Centre's focus on financial inclusion. Besides, the entry of foreign banks is spurring renewed investments in India in the BFSI sector. The Indian banking industry, which aims at becoming the fifth-largest industry by 2020, has a current worth of Rs81 trillion (US$1.31 trillion), and the banks are now utilising the latest technologies like internet and mobile devices to carry out transactions and communicate with the masses.

Tell us about some innovative technology adoptions by PeopleLink that have been used by BFSI sector.

What are the products on offer from PeopleLink?

The banking and insurance industry is facing challenges on account of competitive pressures, changes in customer loyalty, stringent regulatory environment and entry of new players — all of which are pressuring the organisations to adopt new business models, streamline operations and improve processes. Along with the regulators, who are constantly working on norms-related issues in consultation with the banking institutions, banks are also working on gaining competitive edge, adopting customer-centric business models and reaching out to under-banked regions. PeopleLink solutions have been developed keeping these hurdles in mind to offer the banks a single solution with all these benefits.

PeopleLink, with its comprehensive banking solutions, has meticulously developed its products by keeping the Indian BFSI industry in mind. Our portfolio offers customised video banking solutions to revive customers’ personal banking experience, create branchless units for expanding the reach of banks and set up personalised contact centers for enabling video interface on kiosks to achieve unmanned banking units, among others. PeopleLink video conferencing can operate even on low bandwidths and has the potential to facilitate expansion plans of the banks in rural areas, which in turn will promote the government schemes offering banking facility even in remote places, providing financial security to the rural folk.

What will work as growth drivers for the video conferencing solutions in the BFSI sector? The sector’s growth can be attributed to banks’ shifting focus to client servicing. Public

62/BFSI | bfsi.eletsonline.com | january - march 2015

PeopleLink holds a strong credential in the BFSI vertical by enabling various banks and financial institutions to achieve greater productivity through the use of our video conferencing products. We have enabled the largest banking institution, the State Bank of India, in connecting their multiple locations seamlessly using our video conferencing offering for the launch of their new branches.

What holds the banks from adopting technological advancements at the desired pace, and what is the role of regulators in this regard?

What is the company’s dream project for the BFSI industry? PeopleLink has always worked towards synchronising its offerings with the government policies and be a part of the Digital India initiative of the Centre. We have solutions, which have been extensively tested in the Indian market under actual bandwidth conditions. Our most ideal dream project would be to be a part of the financial inclusion projects of various public and private banks to serve the low-income segments of the society through visual collaboration at affordable costs. With our capability of connecting on low bandwidths and data cards, we will play a key role in implementing visual banking services. 

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