SPECIAL ISSUE 3rd Annual PIN*****
eAndhra Pradesh
Vijayawada
21th December
7th SecureIT
Delhi
22nd January
3rd eUttar Pradesh
Lucknow
29th January
eGov Knowledge Exchange
Kerala
February
3rd Financial Inclusion & Payment System
Delhi
3rd December
2nd BFSI Leaders Summit
Mumbai
15th January
Karnataka Cooperative Summit
Bangalore
March
3rd School Leadership Summit
Delhi
29th January
6th World Education Summit - Dubai
Dubai
7th-8th February
3rd Higher Education Knowledge Exchange
Goa
March
5th Healthcare Leaders Forum
Kolkata
10th December
6th Healthcare Leaders Forum
Mumbai
11th March
Contents OCTOBER - DECEMBER 2015
VOLUME 01 n ISSUE 04
07
JAM TRANSFORMING BFSI LANDSCAPE
10 EMPOWERING THE BANKING SECTOR
12 MOVING TOWARDS CASHLESS ECONOMY
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BANKING ON THE UNBANKED 26 A LEAP INTO INNOVATIVE BANKING 32 PRIORITISING BANKING SECURITY 34 TAKING BANKING TO CUSTOMER’S DOORSTEP 38 BANKING GOES DIGITAL WAY
14 NURTURING START-UPS
16 NEW-AGE BANKING AT YOUR FINGER-TIPS
22 TECH LINK BETWEEN BANKS AND UNBANKED
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42 IMPROVING PAYMENT ECOSYSTEM THROUGH ePAISA
45
COOPERATIVES ON A ROLL IN MAHARASHTRA
digitallearning
EDITORIAL
Antyodaya 2.0, through JAM
F
or over a few centuries now, the doctrine of Egalitarianism or the Indian variant of Antyodaya has been enthusing political movements across the globe maintaining the equality of humans in both fundamental worth as well as social status.
It’s, however, interesting that what popular politics couldn’t accomplish for so long, the same has been delivered by Technology in just decades and has somewhere made the entire process of empowering the last man on the street irreversible. One of the largest Financial Inclusion programmes in the world—Pradhan Mantri Jan-Dhan Yojana (PMJDY)—has been spearheaded and successfully delivered by India driven by a firm political will and backed by a multi-layered technological stack. The initiations of this tech-powered Antodaya 2.0 are now being furthered on the winning triad of JanDhan – Aadhar – Mobility platforms to provide as many financial services as possible across the length and breadth of this sub-continent having over six lakh habitations and a mind boggling diversity. The classic imagery of India in the pre-Independence era, that of fleecing money lenders usurping the value created by toiling peasants, has been transgressed by technology-empowered banking. The advent of payment banks has been a blessing across India’s ‘rurban’ landscape and it is picking up. The due integration of insurance products of various denominations using the aforesaid financial inclusion platforms is yet another breakthrough. This issue of BFSI Post magazine carries featured interactions with some of the movers & shakers in the space from nationalised as well private players. The new technological players in the fray, the creators of payment systems like ePaisa, along with the industry veterans like Finacle, have found voice here. The distinction between a banker and a technology configurator is somewhere diminishing. The 3rd Annual Financial Inclusion & Payment Systems Conference on 3 December 2015 in New Delhi, being organised by Elets Technomedia Pvt Ltd, in association with BFSI Post, brings to the fore the technological advances as well as innovative practices and processes powering the financial inclusion revolution. It gives me immense pleasure to present this issue on this coveted occasion. At Elets Technomedia, it remains our perpetual quest to interpret the inception and implementation of technology for development. I would like to take this opportunity to wish you a very happy & prosperous 2016!
RAVI GUPTA Ravi.Gupta@elets.in
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OCTOBER - DECEMBER 2015 VOLUME 01 n ISSUE 04
EDITOR-IN-CHIEF: Dr Ravi Gupta EDITORIAL TEAM BANKING & FINANCE / GOVERNANCE Senior Assistant Editor: Nirmal Anshu Ranjan Assistant Editor: Kartik Sharma, Rachita Jha, Souvik Goswami, Bhawna Satsangi, Gautam Debroy Senior Correspondent: Vishwas Dass, Sudheer Goutham B, Arpit Gupta, Jessy Iype Correspondent: Poulami Chakraborty, Manish Arora Junior Correspondent: Sneha Mejari Trainee Sub-Editor: Akanki Sharma SALES & MARKETING TEAM Assistant General Manager: Ragini Shrivastava, Mobile: +91-8860651650 National Sales Manager: Fahim Haq, Mobile: +91-8860651632 Sr. Manager: Gaurav Srivastava, Mobile: +91-8527697685 SUBSCRIPTION & CIRCULATION TEAM Manager Subscriptions: +91-8860635832; subscription@elets.in DESIGN TEAM Creative Head: Pramod Gupta Deputy Art Director: Om Prakash Thakur, Gopal Thakur Senior Web Designer: Shyam Kishore WEB DEVELOPMENT & IT INFRASTRUCTURE Manager Web Development: Ishvinder Singh
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PR A’S
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EVENT TEAM Manager: Gagandeep Kapani ADMINISTRATION Head Administration: Archana Jaiswal EDITORIAL & MARKETING CORRESPONDENCE BFSI – Elets Technomedia Pvt Ltd: Stellar IT Park Office No: 7A/7B, 5th Floor, Annexe Building, C-25, Sector-62, Noida, Uttar Pradesh - 201301, Phone: +91-120-4812600, Fax: +91-120-4812660, Email: info@elets.in Banking & Finance Post is published by Elets Technomedia Pvt Ltd in technical collaboration with the 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.
Write in your reactions to news, interviews, features and articles. You can either comment on the individual webpage of story, or drop us a mail at editorial@elets.in
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JAM
COVER STORY
JAM Transforming BFSI LANDSCAPE Jan-Dhan – Aadhaar – Mobile (JAM) is on play to bring unbanked sections of the society to the financial network. The Government of India has embarked on a mission to make JAM an integral part of the social security programmes and create a universal social security system for all the citizens, especially the poor and the under-privileged. Jessy Iype of Elets News Network (ENN) delves into the JAM initiative with inputs from some stakeholders
T
he government is making all-out effort to ensure inclusive growth by walking some extra miles for bringing the underprivileged sections of the society in the financial mainstream and providing them with social security cover. However, it’s not that similar efforts were not made in the past, but the kind of political will shown by the present dispensation was perhaps missing earlier. The world’s biggest-ever financial inclusion programme— Pradhan Mantri Jan-Dhan Yojana (PMJDY)—seeks to make Jan-Dhan an integral part of the various social security programmes by creating a unique technology-based triad of ‘JAM’ — Jan-Dhan, Aadhaar and Mobile. These are increasingly being used to transfer subsidies and benefits of other social welfare schemes and help plug leakages in reaching the benefits of government’s programmes to the poor and marginalised lot.
The PMJDY is aimed to create a universal social security system for all citizens, especially the poor and the underprivileged. The bank accounts opened under the scheme would help in effective implementation of all such social security schemes. The idea is that linking these three would provide a solid a uthentication of a consumer and a payments account. The National Payments Corporation of India (NPCI) will play a key role here, by enabling the faster payments infrastructure to allow payments to transfer among all banks. This step by the Government can cement the belief that the initiative holds promise for making electronic payment accounts work with minimal fraud, something that will become increasingly important as the use of electronic payments increases. The main crux of the JAM includes providing techno-
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JAM
COVER STORY logical cushion to fill the gaps in deploying basic access to financial services to all citizens optimally. The ICT space is indeed fuelling a new pace of innovation. The Digital India vision has placed technology at the core of our lives. Speedy implementation of the National Fibre Optic Network will only enable more rural communities to benefit from the ecosystem of an effective governance. Therefore, bringing every citizen on the digital platform will increase empowerment and inclusion. The target of reaching out to 2.5 lakh villages will require intent, innovation and investment. Increasing the pace of internet and broadband penetration, and adoption of the mobile in the socially-relevant services of education, healthcare, banking and finance, along with m-governance, will drive India a long way. It is also vital to note that to achieve digital literacy for all citizens, there is a need to create a common definition of digital literacy for development of a digital workforce.
Mandating FI under JAM India’s financial inclusion indicators, particularly in banking, have put it below the median of countries, and generating bank accounts are the first step towards inclusion. Thyagarajan Seshadri, Vice President at Electronic Payment and Services (P) Ltd, says, “If we look at the government’s approach, they are trying to provide social benefit schemes without any intermediary. Its schemes define leakages in the financial system, which can be fixed. The benefits are looped in the system. Now, as a way out, the government is opting for schemes wherein technology can play a larger role. Through the use of technology, a beneficiary can be connected with the mainstream and given exposure to self services like ATM, RuPay card, through which they can do simple transactions. In other words, the aim is to ensure that the benefits reach the beneficiaries through technology without any leakage. This is where electronic payment services (EPS) come into play. “EPS has played a role where beneficiaries are identified and included in the mainstream through bank accounts. We have got common procedures, where we have ensured installation of ATMs in rural banks that play a vital role in benefiting the customers through DBT. The JAM initiative is vying for bigger picture in India that is getting $20 trillion in the economy, which can thereby eradicate poverty. The concept of JAM is in itself a game changer, where the Pradhan Mantri Jan-Dhan Yojana (PJDY) and the Aadhaar schemes are a source of social benefit schemes for the citizens. As mobile is acquired by majority of the world today, mobile transactions are the in-thing now,” Seshadri adds. Talking about the use of technology in the financial
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sector and role played by his company, Ramesh Baswa, Founder, MD & CEO, Sollet Soft Solutions Pvt Ltd, says, “Sollet has been already tied up with State Bank of India (SBI) for Telangana and Andhra Pradesh for financial inclusion. We have tied up with Yes Bank for Pan India as a Business Correspondent (BC) in extending domestic remittance and prepaid card services across the corridors covering urban and rural areas. We have also tied up with the Bank of Maharashtra (BOM) as a BC for branch decongestion in Pune as a pilot. We will enable Aaadhar/RuPaybased transactions for all BOM Customers through Agent/ CSP outlets. “Further, we have tied up with the Bank of Baroda (BOB) as a BC in extending financial inclusion across UP, Gujarat, AP and Telangana involving Aadhar/RuPay-based transactions. In each case, Sollet CSP/Agent will use either webbased or Integrated POS-based systems for serving the local customers. We have also the ability to extend banking services to the local customers through CSP/Agent Mobile, if the bank allows us to integrate. We have not come across any bank until today which is keen to explore mobile-based CSP/Agent options. Banks for sure have started working towards customer mobile banking service under financial inclusion,” adds Baswa. Speaking of the role SWIFT India plays in financial inclusion, Saqib Sheikh, COO, says, “To support the financial inclusion initiatives of the country, in consultation with the RBI and leading banks in India, SWIFT has established a national financial messaging platform based on proven SWIFT technology and expertise. The platform is designed to bring reliability, security and scalability in the exchange of payments, securities, trade finance and treasury transactions in India’s domestic financial markets. This is enabled with the partnership of SWIFT and nine leading public sector and private banks of the country which guide its features and evolution.” Anil Bhardwaj, the Paynear Co-Founder, says, “Paynear is the fastest growing payment solution provider with a goal of empowering digital payments not only to the urban but also to tier II and tier III cities as well as rural India. With our first flagship product mPay mPOS, we can play an integral part in the JAM framework by providing all types of merchants, small or big, facility to accept and manage their card payment needs. mPay facilitates payment acceptance ‘anytime, anywhere’ by transforming smartphone/tablet/PC into a card payment acceptance
JAM
COVER STORY device. Merchants can effortlessly reconcile card and cash payments and capture their customer data for retention and reward programmes. We also educate merchants on the benefits of card acceptance and connect them with partner banks for availing loans. With ePay launch scheduled for January 2016, we would be the only company offering online and offline payments across all industries and all categories of merchants.”
Challenges in Deployment Despite the government’s efforts for digital financial inclusion through PMJDY scheme, which was launched last year, the World Bank estimates that over 230 million Indians still pay utility bills in cash. Moreover, close to 43 per cent of bank accounts remained inactive in 2014. Acknowledging the challenges faced by formal banks in driving financial inclusion, the RBI in August 2015 had granted inprinciple payment bank licence to 11 non-banking entities. Seshadri says, “The big picture is there, but what is lacking is the last-mile connectivity. The government has, however, found way to issue numerous accounts and accessibility in the form of RuPay cards. This can be seen as a way to interact across multi-channels, but the challenge is that there is no proactive measure, and the availability of power and connectivity should be made 24X7.” Says Bhardwaj, “At present, our biggest challenge is generating the awareness anout the solutions we offer. As it is a relatively new technology, shift in merchants’ mindset to accept cards versus cash will take a bit longer. Other challenges include low telecom signals in some locations, which make adoption slow. But we’re confident that as the penetration and adoption of 3G/4G increases, we will soon overcome these challenges. “Thanks to the government’s Jan-Dhan Yojna, the number of debit cards will grow multi-fold and half of the population is expected to have a RuPay debit card by the end of 2015. With government initiatives of financial inclusion, incentivising card payments, reduction in cash transactions with rising transaction value and volumes, we are sure to see a big splurge. Innovative schemes, customer loyalty and retention programmes will further boost the development of this sector.” Baswa adds, “We, in general, rely on bank’s technologies for extension of financial inclusion. Banks are struggling in resolving technical issues wherein a collaboration between their technology service providers (TSPs), NPCI and Aadhaar are involved. We believe that a better coordinated effort across the stakeholders will help speed up and scale up financial inclusion involving JAM. We have been facing challenges in integration with banks, especially wherein Aadhaar-based transactions are involved as we see lack of know-how across the stakeholders.” He adds, “We face problem of scalability where banks give us scattered mandate for implementation of financial
inclusion. A densified and scalable approach will enable BCs like us to be more sustainable and enable us to reach more excluded social segments quickly.” Sheikh states, “With the Jan-Dhan Yojna, we have seen a 27 per cent increase in the number of bank accounts in a single year. Internet access has consistently been increasing 35 per cent each year and banking services now penetrate close to half of our geographically and demographically diverse populace. While this is impressive in itself, only 15 per cent of those that are banked are active users of e-banking facilities.”
Acknowledging the challenges faced by formal banks in driving financial inclusion, the RBI in August 2015 had granted in-principle payment bank licence to 11 non-banking entities Technology availability To facilitate technology solutions in rural areas, it is crucial for the licence holders to have accessible banking points. It includes availability of mobile phones, kiosks and internet-enabled outlets. On how his company is unique in delivering financial inclusion services, Seshadri says, “The concept can garner good ecosystem and simplification of treaties. We, in EPS, under-plan the requirement of the market and offer services as per its requirement. We built an entire setup and network and drive it at one point. We ensure there is availability of ATM services in rural belt 24X7. We do good packaging, and this differentiates us from others.” However, Baswa differs in defining his own technology, “Sollet has a unique approach in extending B2B & B2E through CSP/Agent outlets. We have plans to extend Social Commerce/Inclusion involving financial inclusion. This makes the entire ecosystem more sustainable, having longer business prospects. We enable each CSP/Agent as a low-cost franchise for banks, merchants etc, with exclusivity. This way we empower a bank, merchant, etc., whereby they get an avenue to expand their businesses with lowcost extension model and an Agent/CSP earns more while extending banking, non-banking services and e-commerce to the local customers.” For Bhardwaj of Paynear, it’s all about mobile wallet. “mPay app stands out as the most user-friendly and easy to use mPOS app in the market. It is available in multiple languages and comes with a number of value-additions for merchants. The app is complemented with an internationally acclaimed and fully certified card reader to accept all major cards. Offering such a solution is a result of in-depth research by our team, who designed and developed it after careful understanding of various business requirements.”
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Infosys Finacle
RAJASHEKARA V MAIYA
Empowering the BANKING SECTOR Rajashekara V Maiya, Associate Vice President & Head – Product Strategy & Presales, Infosys Finacle, in a conversation with Aamir H Kaki of Elets News Network (ENN) shares about Finacle’s digital and mobile banking solutions, how these solutions are revolutionising and powering the Indian banking industry and more Finacle has revolutionised the era of Core Banking which is now seen as the initiation of digital banking. How Finacle is leading and powering the Mobile Banking Solutions which are getting into vogue now? In the last two decades, Indian banking industry has seen a CAGR of 20 per cent, which is around five times the growth. In the same period, the deposit rate has grown 4.8 times, lending base 6.6 times, interest income 9.5 times and the network has increased almost 4.5 times. There is no parallel for such type of growth in any other industry in India as well as globally. However, the interesting fact is that such growth comes at less than five per cent of employee growth. All the banks, be it public, private or foreign, have taken the transformation route for the core banking perspective and moved out of whatever they were earlier. Now, the way Indian banking industry is leveraging technology with online banking, real time, 24X7 banking, etc, there is no parallel. The core banking has given the platform to banks to centralised their operations and ensured that they have all their branches connected and interlinked. With the Reserve Bank of India’s (RBI) clearing of opening the bank accounts for people who are 10 years and above, we have observed that a lot of young customers are getting onboard for banking business as they are used to working on mobile, online, tablet, etc. We are offering internet and mobile banking solutions to Indian banks from a long time now. Around a month back, the third version of our mobile banking solutions
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Infosys Finacle
RAJASHEKARA V MAIYA was also launched, which is basically to help the Indian banks to reach out to more customers and make sure that more and more financial services are delivered to them, every time. On the other hand, we are also witnessing that more and more power is increasingly passed on to the end customers so that they would able to transfer funds, book movie tickets, do transaction using mobile, etc. And we have already launched solutions to cater to these type of requirements.
How Finacle is re-positioning & re-galvanising itself as an end-to-end Banking Solution in the differentiated services framework with Payment Systems of various hues coming into the fray? Recently, the Indian banking industry has opened up for new players and entrants. The RBI has granted in principle approval for 21 aspirants, which is a mix of small finance banks and payment banks, many are from non-banking background. This has created an environment where lot more players are facilitating and helping the customers to conduct the transactions using the payment bank services. However, in this scenario, you cannot have just one solution being offered to the banks for their end customers, but you need to provide a comprehensive end-to-end universal banking solution. This is what Finacle realised long time back and successfully launched a comprehensive universal banking solution, which caters to the customers in terms of deposit, lending, paid finance for corporate banking customers, treasury, CRM solutions, etc. We have also launched digital commerce or digital wallet which is an important area where customers can convert their money into a digital currency and hold it in a mobile wallet for handling the transactions. For example, Airtel Money, which is being launched around 3-4 years back, is based on Finacle digital commerce solution. With payment banks coming into picture, Finacle has launched end-to-end payment bank solution, which provide these banks to cater to real time payment, NEFT payments, RTGS payments, IMPS-based payments, etc. The advantage of Finacle’s universal banking solution is that it contains around 22 distinct modules that cater to deposits, lending, mobile banking, internet banking, treasury, and many other aspects.
Tech companies are becoming New-Age Financial Platforms. With the re-engineering & re-architecting of Infosys which is happening under the leadership of Vishal Sikka pursuing the New+Renew theme, what specific winds of change are being blown into the Finacle Stable? Vishal Sikka has been talking in the media about the core aspects of new and renew as a dual strategy for every organisation. However, most of the organisations
that we have came across are struggling to handle this. As per the Gartner research, large banks spent almost 70-80 per cent of their IT budgets to keep the business running, and only 20 per cent of it on innovation, differentiation, etc. We have been jointly publishing a research report along with ESMA, for the last seven years. In the seventh edition of ESMA report, announced this month, we have spoken
Large banks spent almost 70-80 per cent of their IT budgets to keep the business running, and only 20 per cent of it on innovation, differentiation, etc to banks in more than 60 countries on the challenges, concern and issues faced by them. About 80 per cent of the respondents said that they do believe that innovation is important and many of them they are increasing their investment on innovation. On the question of the biggest threats to banking industry, almost 45 per cent of respondents responded that their biggest threat is going to be FinTech companies and companies like Google, Facebook, Amazon. It is important to address those challenges and to adopt a dual strategy of renew and new. While trying to renew the existing processes, products, and people, banks need to invest in new strategy as well that brings in capability to innovate, create new things and deliver faster solutions to the market. Finacle, as an organisation, is committed to help the global banks in this renewal strategy by bringing in solutions like finacle end-to-end universal solution. Finacle is now trying to re-invest and provide the capability to banks so that the dual strategy of new and renew is being delivered on the ground and they can also see the results for they are looking in terms of the change that is happening. ď Ž
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Special Interview
RAJESH AGGARWAL
Moving Towards
CASHLESS ECONOMY
When we talk about payments, we have to talk about a lot of currency floating around and lesser digital and mobile channels of money, says Rajesh Aggarwal, Joint Secretary, Department of Finance Services, Government of India in conversation with Kartik Sharma, Sneha Mejari and Akanki Sharma of Elets News Network (ENN) Can you throw some light on the concept of financial untouchability? Generally, the Pradhan Mantri Jan-Dhan Yojna (PMJDY) is considered as a financial inclusion programme only. But if we delve deeper, it is actually much beyond that. Few decades ago, despite nationalisation of banks, social untouchability was there in the economic and financial system. There were people who belonged to the lower strata of the society, with the majority coming from the SC/ST category. Nobody would touch this segment and banks would deny opening their bank accounts and the financial institutions would not give them easy credits. So, when I talk of national inclusion, I also talk about shutting the door of any type of financial untouchability.
What are the ways to get this ignored population into the financial ambit? We basically had all the rules, policies, procedures from banking regulator RBI and other banks and financial players. For instance, theoretically we had the master circulars to allow people to open bank accounts. In 2012, RBI has said that Aadhaar can also be used as an identity proof, but even that was failed to have much impact. Coming to the incumbent government, even it did not change the rules and policies. But, there was an apparent change in the attitude. Survey after survey has shown that the core of the country is still away from the financial system. Gradually,
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we can see the bankers getting sensitised to the issue. I have heard from many bankers that after remaining in CMD’s chair for years together, they are now feeling satisfied that they have been able to do something good for the society. So, this attitudinal change is taking place at all levels.
With the advent of new payment banks, how do you see the payment systems taking shape in the country? Talking about traditional ways of transaction, one should also talk about a lot of currency floating around, instead of digital and mobile channels of money like easy cash-in, cash-out facilities closer to the villages, easy channels of remittance, etc. The entire gamut of Jan-Dhan accounts, more ATMs, micro-ATMs, etc., is providing avenues to save their earnings via digital mode.
As an IT Secretary, you have the experience of using IT for innovative purposes. How do you see use of IT taking India to the path of cashless economy? IT is basically the heart and soul of every insurance company and bank. A lot of operations are going mobile these days. For instance, Paytm itself has 10 crore customers and different surveys are showing that practically every household in the country has access to some kind of bank account or a postal account or a mobile wallet. Then, we have the Aadhaar, where 900 million people have
Special Interview
RAJESH AGGARWAL been issued Aadhaar numbers and it provides an instant online verifiable method of identity. And it could be through biometric or mobile-based OTP. The third is mobile, more than 900 million sim cards are active. So, combining these three can really lead to total change in the way service is delivered. Insurance inclusion is also missing in this country. It is said that less than two per cent people in this country have some kind of insurance, 98 per cent simply have no insurance. So, when we came up with `12 Suraksha Beema Scheme, it was incredibly simple. You have to have a bank account, your age has to be between 18 and 70 and you have to have an amount of minimum `12 in the bank account. Further, there is no subsidy from the government at all and it even has private insurance companies involved in the project. Also, we requested IRDA, the regulator and they agreed that electronic evidence will also be admissible.
There was a view when PMJDY was incorporated that these accounts will be opened, then there will be no transactions and there will be no use of those accounts. But things are going on. Do you think that notion was wrong and things are falling at place? Initially, some bankers were sceptical because one can specially have a special drive and open account just for the heck of it. Fortunately, it did not happen and the zero balance account was also a masterstroke. Initially, some felt that it was not good. There were people who felt humiliated going with `50 or `100 to the banks and when Prime minister himself said that he has proudly opened zero-balance account, that humiliation factor was gone. Moreover, it came with totally online accounts, and people got ATM cards with pin number. As the online account was open, people could see it with mobile and Aadhaar numbers. So, they can do mobile banking also. They can use micro ATM, and now we see that more than `26,000 have come to these accounts. Also, the chairmen of many banks are saying that it’s a comfortable venture for us. We are not making losses in Jan-Dhan accounts. Banks are earning about 1,000 crore per annum from these accounts by way of interest and so on. So, there is definitely money at the bottom, as it’s a commercially viable programme.
You also handle National Insurance Company (NIC). Do you see making
CASHING IN ON CASHLESS TECHNOLOGY
Insurance inclusion is also missing in the country. Less than two per cent people in this country have some kind of insurance and 98 per cent simply have no insurance. So, when we came up with `12 Suraksha Beema Scheme, it was instant success it as a model insurance company or corporation? National insurance is one of the oldest insurance companies in the country, established in 1906. Commercially also, it is doing quite well. On the social front also, the Suraksha Beema has done the highest numbers, almost 50 per cent of the Suraksha Beema have come from national insurance. And in insurance inclusion, we are trying to make sure that we go to more and more villages through online channels and mobile channels to reach out to more rural areas. We can even sponsor SC/ST boys and girls from villages and their certification fees we can pay from national insurance so that they can also come up and start selling insurance products.
What is your message for the participants conference on Financial Inclusion Payment Systems? I have always enjoyed conferences organised by Elets group on various topics. I am sure this conference will also see good audience with multiple interests. This is the field where lot of innovations are coming up, new start-ups are coming up, lot of new ideas and technologies are floating around. So, conferences like these really help policy makers, technology guys, bankers and insurance people. ď Ž
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SIDBI
DR K SHIVAJI
Nurturing
START-UPS The Small Industries Development Bank of India (SIDBI) will pursue the strategy of not becoming the competitor of the existing financial players, but instead act as a centripetal force to strengthen the entire gamut of financial institutions and thereby the financial ecosystem itself, shares Dr K Shivaji, Chairman & Managing Director, SIDBI, with Kartik Sharma and Akanki Sharma of Elets News Network (ENN) In the past one year, SIDBI has worked a lot towards skill development and strengthening the small and medium scale enterprises. Can you elaborate on that? In India, we need another 10-15 million jobs for the aspiring youth. But, the job creation is almost negligible, which is surely an imbalance. So, there is an urgent need for intervention. The youth today is willing to undertake entrepreneurial initiatives for good, attractive and lucrative jobs. We need to capitalise and leverage this kind of zeal seen across the country by encouraging the start-up movement. It is important to emerge fast in a competitive market, and entrepreneurs should be smart in their business plans, business models and day-to-day operations. At SIDBI, we have taken up the credit-plus approach, which means not only providing the capital, but also coming up with a holistic approach in terms of fiscal and non-fiscal hand-holding. Make in India, which is one of the prime projects of the Government of India, has already started yielding results. On that front, SIDBI has also come out with a dedicated front corpus of `1,000 crore to push the manufacturing sector. This `1,000 crore credit has been earmarked to take care of not only manufacturing, but also associated manufacturing activities, so as to give a holistic push to the sector. SIDBI will pursue the strategy of not becoming the competitor of the existing financial players, but to strengthen the entire gamut of financial institutions and financial players, which will help in improving the entrepreneur ecosystem.
Is it not challenging to provide security to these startups? If these fail, will the government be there to provide support? We may be able to provide at least some support. However, an entrepre-
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SIDBI
DR K SHIVAJI tives to strengthen the drive. I believe that we should also push social inclusion and economic inclusion, so that the ultimate objectives go hand-in-hand. Moreover, various new banks, which were issued licences by the central bank recently, are also going to play a very important role in this context. SIDBI, in a very coherent way, is ensuring maximum focus on that segment by devising new instruments. Apart from this, we are also getting a good help on account of availability of Aadhaar, and Jan-Dhan accounts. It makes it very easy for financial players to move forward and implement their strategy.
The technological sector is home to the major chunk of start-ups in India. They are also the backbone of the Digital India initiative. By backing these start-ups, do you also see SIDBI contributing to the initiative? The government’s initiatives, like Digital India, Skill India Mission and Make in India, are together galvanising the start-up movement. Entrepreneurs need various kinds of
neur needs to put in his best. Rigour, conviction, commitment and energy need to be pulled together. However, security from safety net necessitates fulfilling certain requirements, and may come in various forms, like guarantee, hand-holding or mentoring. However, giving a guarantee that a venture would succeed and in case of failure, somebody else will take care would make people lethargic. Probably, doing it partially could be thought of to avoid disinterest.
SIDBI is also doing a lot of work in the field of financial inclusion, for which government agencies have launched various campaigns. In this scenario, how does SIDBI view the need to push financial inclusion in the country? A large number of enterprises are unable to mobilise adequate finances in time, and sufficient funding for the unemployed is still largely amiss. Only `17,000 is available as loan for around 5.57 crore of entrepreneurial units each; as a result, the huge potential of the talented people, who are unserved and unemployed, remains locked. There is a need to unlock that potential, so that they can also contribute to and participate in the journey of the nation's growth. However, the various forms of financial inclusion drive, which is now emerging as a complete set of initiatives undertaken by the government agencies, regulators and financial institutions together, is a step in the right direction. The Government of India, along with various State Governments, institutions like SIDBI and banking regulator Reserve Bank of India (RBI), is coming up with a number of multi-dimensional initia-
The government’s initiatives, like Digital India, Skill India Mission and Make in India, are together galvanising the start-up movement constituents to work in tandem, which will finally culminate into a larger start-up movement as a result of strengthening of the overall technology ecosystem. Digital India is certainly one of the most desired initiatives of the day, which will help enhance the country's growth potential with the process gaining momentum. Besides, increasing the efficiency, it will also make the country more competitive vis-a-vis the global players.
Any message for the start-up representatives attending the eIndia summit? How do you think this summit can further illuminate their path? This type of meets is an opportune time for a large number of entrepreneurs, who can look forward to future guidance and mutually beneficial tie-ups that could help them leverage their potential. Individual entrepreneurs have their ambitions for growth and development. Although bubbling with enthusiasm, they need to be oriented towards the shortest and the most-efficient way of going about it. A platform like eIndia will definitely help all these entrepreneurs translate their energy and enthusiasm into growth and success. ď Ž OCTOBER - DECEMBER 2015 | bfsi.eletsonline.com | BFSI
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Central Bank of India DR R C LODHA
New-age Banking
at YOUR FINGER-TIPS Dr R C Lodha, Executive Director, Central Bank of India, in an interaction with Arpit Gupta of Elets News Network (ENN), speaks about the various financial inclusionrelated programmes initiated by the Bank and other steps taken by them to provide new-age banking to the customers whereas over double that number—some 900 million people—own mobile phones. So, there’s an irony in that comparison. Today, bank customers look forward to facilities like: l Queue-less banking l Paperless banking l Quick and speedy banking and l Mobile banking So, in line with their expectations, our Bank is already providing all facilities through various platforms like: l CBS branches l Net Banking, which added a new feature of online ITR filing l Mobile Banking, which has the feature of Aadhaar seeding and NEFT l Micro ATM-equipped BC outlets that enable customers to transact or open accounts using e-KYC as well as the conventional method l SMS Banking, which facilitates balance enquiry, in addition to SMS alerts, etc. Also, as per government directives, the Bank had launched an insurance-focused scheme, called Suraksha Deposit Scheme, with various customer-friendly features.
Give an overview of the financial inclusionrelated initiatives of the Central Bank of India. First financial inclusion programme in India was initiated by the Reserve Bank of India in 2005 with an aim to bring the financially-excluded population of the country within the ambit of regulated financial institutions. Our country has a huge population and more than 60 per cent of them live in villages. Since the launch of financial inclusion programme in 2005, lots of efforts have been made in this direction by the stakeholders. But numerous problems arose during the course of its implementation and passing on benefits to the ultimate beneficiaries. Had these hurdles not been taken care of properly, the ultimate aim of the programme to pass on the benefits to the poor could not have been achieved.
What are the new customer-friendly products/ services introduced by the Central Bank of India? Only a third of India’s 1.2 billion people have bank accounts,
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Complexities in Implementation of Financial Inclusion l Often, illiteracy is an obstacle in reaching
out to the financially-excluded and bringing them to the banking stream. If one cannot read or understand a bank receipt, how one can be confident that he has received the correct amount? l Lack of awareness and trust in parking money in the banking channel l Involvement of middlemen in passing on benefits to ultimate beneficiaries under various government schemes l Lack of accessibility to banking facilities due to absence of brick and mortar branch network
Central Bank of India
DR R C LODHA
Technology upgradation and human resources skilling at Central Bank of India l The Bank through a network of its branches and
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Business Correspondents is connecting more and more people and bringing them into banking channel, so that banking services and various government benefits could reach them directly To reach last-mile connectivity, the Bank is aiming to open at least 25 per cent of its branches in rural areas. Apart from this, more than 6,000 BC outlets and over 3,500 Ultra Small Branches have been set up by the Bank under the financial inclusion programme Extensive manpower in the form of BC Agents (BCAs) or Bank Mitra has been engaged at each BC outlet which covers at least 1,000-1,500 households in an area As far as technology is concerned, the Bank is using one that is universal throughout the country and each customer is connected to the Bank’s CBS network, which enables them to transact with any BC outlet or branch from any part of the country Bank has also introduced the functionality of account opening through e-KYC By training BCAs/Bank Mitras, they are being skilled in use of latest technology, apart from bringing awareness on various banking products and services amongst the masses To bring about financial literacy amongst the masses in mission mode, the Bank has set up 48 Financial Literacy and Credit Counselling (FLCC) centres at 48 district headquarters in nine states of the country The Bank has introduced a passbook for BCAs, which contains broad guidelines about their roles and responsibilities, payment structure for various activities, monthly work done by them on various parameters, like account opening, transactions made, enrolment canvassed under social security schemes, etc, and remuneration paid to them every month. It is updated by BCs themselves and authenticated by the base branch, and has to be made available to all officials visiting them from the Bank, RBI, DFS, etc. The process ensures timely payment to BCAs and motivates them as and when their work is appreciated by the visiting officials The Bank has completely replaced the smart card-based ITeFI solution with IFIS, which enables a customer to transact through biometric identification and duly verified through Bank’s central authentication server. It has reduced the burden of smart card from the FI network
What new technologies have been introduced in the financial inclusion and payment systems domain in the industry in the recent times, and how updated is the Central Bank of India in this regard? In the recent past, the following technologies have been introduced by the banking industry and our Bank is implementing/operating all these technologies successfully: l Aadhaar-enabled Payment System - On-US/Off-US l RuPay card-based payment system - ON-US/OFF-US l Interoperability amongst banks based on AEPS and RuPay card l IMPS - Immediate Payment Service – at BC locations intended to offer the following services for interbank fund transfers are active in our bank. We are also going to introduce it in our BC channel: m Person to Person (P2P) – Transactions can be initiated using mobile phone by entering the mobile
Keeping pace with the changing banking environment, we have shifted our focus from traditional push method to electronic method of communications, like advertising, direct e-mail, Point-of-Sale displays phone number and MMID of the beneficiary
m Person to Account (P2A) – Fund transfer is done
using the beneficiary’s Account Number and IFS Code of the beneficiary bank m Person to Merchant (P2M) – This is to facilitate commercial transactions in a similar mechanism as the above two, and m Person to Aadhaar (P2U) – Transactions can be done using beneficiary’s Aadhaar number
How do you leverage social media and analytics for ensuring customer satisfaction? Keeping pace with the changing banking environment, we have shifted our focus from traditional push method to electronic method of communications, like advertising, direct e-mail, Point-of-Sale displays, engagement through Facebook interaction, Twitter, Mobile Banking and m-Passbook, in addition to the internet banking facility. The effective use of social media tools is improving customer satisfaction and driving business expansion through acquisition of new customers. These modes of communications are more popular with the new generation customers.
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Punjab National Bank K V BRAHMAJI RAO
BANKING ON THE UNBANKED Providing last mile connectivity in the inaccessible areas across the country, is a key focus of Punjab National Bank, shares K V Brahmaji Rao, Executive Director, Punjab National Bank,during a tete-a-tete with Vishwas Dass and Souvik Goswami of Elets News Network (ENN) Please tell us how Punjab National Bank is contributing to make the Government of India’s Financial Inclusion programme a huge success. Punjab National Bank has been partnering with the government and has been working shoulder to shoulder for social and economic upliftment of the country. This can be seen from the fact that as on 31.10.2015, out of 6,314 branches, our bank has 2,625 rural branches, i.e. 41.57 per cent of our branches are in rural areas. Besides, the bank is also providing financial services to the last mile through more than 8000 Business Correspondents (BCs) employed in the remote areas of the country. PNB implemented the Pradhan Mantri Jan-Dhan Yojana (PMJDY) in a mission mode and opened 1.19 crore accounts till 18th November 2015 which is the highest among the Nationalised banks. On inclusion of the performance of PNB sponsored Regional Rural Banks, the number of accounts opened under PMJDY increases to 1.50 crore. The BCs are using Hand Held Tools (HHTs) which are seamlessly integrated with the main server of the bank. The bank is also working towards offering inter-operability within BC agents that would facilitate the FI of customers wherein they can access all the services required by them at their own location in real time. “Banking for unbanked” is a mission of Punjab National Bank. The bank has made a humble beginning towards its pursuit of an inclusive growth strategy to achieve financial inclusion by ‘reaching the unreached’. The services of BCs were being utilised to identify the beneficiaries as well as managing the Point of Sales (POS) centres where the Hand Held Devices were operated for providing banking services. The bank believes that financial education and awareness is one of the most important ingredients of financial inclusion in the country. Hence, the bank has been conducting financial awareness campaigns, publishing posters/pamphlets and providing counseling to the people in rural and remote areas for
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Punjab National Bank
K V BRAHMAJI RAO
promoting financial inclusion. Through the e-KYC process, accounts of the customer having Aadhaar number are opened through biometric authentication from UIDAI data base. This product has been operationalised and 56.6 lakh accounts have been opened upto 21.11.2015. The Aadhaar Enabled Payment System (AEPS) is operational and working successfully. Kiosk Banking Solution a web based solution has been deployed at BC locations in our bank. At present all our BCs are working under KBS and providing the services of i) Enrolment/ opening of accounts ii) Cash receipt/deposits iii) Transfer of funds/ inter-sol transactions iv) Balance enquiry. The Micro ATM machines with interoperable transactions facility are proposed to be deployed shortly at BC locations.
How important is PMJDY for implementation of financial inclusion? Financial inclusion is the programme of inclusion of hitherto financially excluded sections. PMJDY is visualisation of extending the basic financial entry to the excluded household into the formal financial system of the country. Till August 2014, of the 24.67 crore households in the country, 10.19 crore did not have access to banking services. In rural areas, 44 per cent households and in urban areas 33 per cent did not have a bank account. Hence, PMJDY was announced by the Hon’ble Prime Minister on August 15th, 2014 as a national mission for taking formal financial services to more than 7.5 crore unbanked households. Till 18th November 2015, 19 core bank accounts have been opened by all the banks under PMJDY. The target given by the Government of India to all the banks whereby they were supposed to open one account per household latest by 26.01.2015 was achieved barring a few areas of J&K and some extremist affected areas. PNB’s contribution stands at 1.19 crore accounts (1.50 crore including PNB sponsored RRBs) during the same period. Its importance not only lies in providing a bank account to every family but also in inculcating the saving habits among the people. PMJDY comprises of the following six pillars:l Universal access to banking facilities l Providing basic banking accounts with overdraft facility and RuPay Debit card to all households l Financial Literacy Programme l Creation of Credit Guarantee Fund l Micro Insurance The PMJDY is a scheme that aims to provide all the citizens of India – especially the poor masses – a bank account, credit facility, insurance cover and debit card. The scheme will also allow the poorer sections to avail subsidies and overdraft facilities through their bank accounts which are intended to eliminate money-lenders, commission agents and corruption. In the long-term, this scheme will also provide the backdrop for a cashless economy – another focal
point of the Prime Minister’s dream of Digital India. Hence PMJDY can be termed as the main driver of financial inclusion in India.
Please elaborate on how technology has been adopted by your esteemed bank to give financial services to the customers. PNB is the early adopter of technology and market leader in providing technology-driven, customer-centric products & services. All the branch operations are performed through Centralised Core Banking Solution (CBS) (Finacle of M/s Infosys). This has enabled the customers to transact from any branch. With CBS; customer has become the ‘Customer of Bank’ and not necessarily of the branch only. PNB’s web-based internet banking, mobile-based mobile banking, SMS banking enable the customers to undertake all their transactions from anywhere at any time. It is truly 24*7 banking at their finger tips. PNB with over 8600 ATMs provides free cash withdrawal facility to vast pool of Debit Card holders. The ATMs also facilitate inter-bank transactions, tax collections etc. The bank’s technology enables customers to meet all their financial service requirements including tax payments & e-com transactions. The secured technology environment ensures easy to use operation while providing multi-layer security like encrypted data transmission, unique user ID/ password for login, additional password for transaction with additional factor of authentication like OTP & adaptive authentication. Every channel transaction is intimated to the customers through SMS bringing in the desired confidence. PNB’s technology ensured standardised delivery of financial services to all the customers across all the channels, be it branch, banking correspondents’ location, ATMs, Internet banking or mobile banking. The unified customer grievance redressal mechanism ensures prompt redressal
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Punjab National Bank K V BRAHMAJI RAO
of grievance referred through web/ contact centre/branch. A dedicated team constantly works for up-gradation of existing technology products and to introduce new and innovative products to ensure that the customers remain served with the latest technological products.
effective channel for the bank. The bank is also conducting financial awareness campaigns to educate the customers and encourage them to make more and more transactions through the bank accounts. The bank is also in talks with the upcoming payments banks to offer banking services in the rural areas.
What according to you are the main challenges for financial inclusion?
Please shed some light on the future initiatives to be taken by PNB for providing financial services?
The main challenge for the banks in implementing the financial inclusion drive is the volume of operations in the accounts opened under PMJDY. The second challenge is the low financial awareness and need for educating the people of the rural area. Though the people are increasingly becoming financially educated, it will take some more time and effort on part of the banks, regulator and other stakeholders. Following are the main challenges for financial inclusion: l Duplication of A/C opening l Low/Nil transaction in accounts and high percentage of zero balance accounts l Connectivity issues particularly in hilly area and remote places l Distribution and activation of RuPay cards l Financial illiteracy The banks are taking different measures to meet those
The unified customer grievance redressal mechanism ensures prompt redressal of grievance referred through web/contact centre/branch challenges. By conducting financial literacy campaigns and counseling, the banks are trying to increase the financial awareness of the people especially in the remote areas. Apart from that, the banks are digitalising the process of offering financial services in the distant rural areas. With the government’s initiative to transfer of funds under the social welfare schemes directly to the beneficiaries bank accounts, business viability for the banks in such accounts will improve. Apart from understanding and engagement of beneficiaries, banks are integrating banking with seamless technology to take the benefits of financial inclusion to the last mile in the country. It is the reason that you see today strong bonding between banks and financial technology companies in furtherance of financial inclusion. With gradual increase in the transactions by the customers in rural areas, their trust on the banks will build up and then the banks will be able to cross sell their products to them. PNB appoints BCs in the remote rural areas who are directly linked to the main server of the bank which makes the transaction seamless and real time. This is also a cost
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The bank is working on creating digital platform to extend multi-channel seamless transactions for the customers by integrating Internet banking, mobile banking, core banking & contact centre. The emerging strength of social media is proposed to be utilised for positioning brand PNB & offering products & services. Already bank has established its presence on Twitter. Some of the initiatives which are under consideration of the bank are: l Customer’s acquisition through online web services and from their doorstep using tab banking services l Introduction of off-site e-lobbies with self operated cash deposit l Machines, cheque deposit machines, passbook updating machines, ATMs & internet kiosks with purpose of providing banking on 24*7 basis The digital platform with end to end retail loan acquisition & approval based on score-based model l PNB Wallet l PNB Youth Banking – Mobile App l Mobile Appl ATM Assist- Mobile App l Cardless cash withdrawal
What is your vision for PNB? Punjab National Bank is one of the largest Public Sector Banks of the country with a vast customer base and more than 6500 branches throughout length and breadth of the country. The bank envisions to be the household brand of the country i.e. the bank that responds to the needs of customers in the way they require. The vision also encompasses to march ahead efficiently in the market by digitalising its processes and products. The bank will strengthen and re-orient the human resources and promote sales culture so as to make it a “Super Smart Bank”. Digitalisation of the banking products and process will make the bank as “the bank for the youth.” I also dream Punjab National Bank to increase its global foot-prints and become a global brand. While expanding, significance to the strength and soundness will always be at the core of the business strategy. The bank will continue to remain a socially responsible bank for the sovereign and compliant bank for the regulator. The trust of stakeholders is thus envisioned to grow further with the aforesaid path.
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A QUALITY MAGAZINE ON BANKING AND FINANCE
IDBI Bank
SKV SRINIVASAN
Tech Link Between BANKS AND UNBANKED The IDBI Bank looks upon the ongoing financial inclusion drive as an opportunity to reach out to the hitherto unbanked population using the Business Correspondents, thus saving expenses on setting up of brick & mortar branches, SKV Srinivasan, Executive Director, IDBI Bank, tells Arpit Gupta of Elets News Network (ENN) and financial services using the Business Correspondent (BC) model, thereby saving capital expenditure on setting up of brick & mortar branches for expansion.
In India, only 40 per cent of the population has a bank account, 10 per cent life insurance cover and only 0.06 per cent non-life insurance cover. What is your Bank’s vision for financial inclusion?
How do you view the importance of financial inclusion in the backdrop of the fact that India has embarked on an inclusive economy agenda? The Government has set out on a national mission for inclusive growth of all sections of the society and chosen financial inclusion as the first element to push the inclusive agenda. Under this mission, providing banking and financial services will act as a catalyst for the inclusive growth of the excluded sections, so as to make them part of the country’s economic growth story.
Is it a national mission, a humanitarian mission or business expansion? The IDBI Bank appreciating the objective of the national mission is also looking at it as a business opportunity to reach out to the hitherto unbanked population by providing banking
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Technology was a constraint for the bank to aggressively expand in rural areas to cater to this 60 per cent excluded population. But now with the GPRS technology and the Business Correspondent model, it has become possible for the banks to provide banking and financial services to the excluded populace of India. The IDBI Bank has earnestly taken up financial inclusion as a business opportunity, though there are many challenges. It is implementing financial inclusion in the villages allocated to the bank and has established a robust technology platform to extend other banking and insurance products. I would say that though Bank has not been able to overcome all the challenges and hurdles, yet we have succeeded in penetrating the remote unbanked areas and today people have at least started having small savings in their accounts. The Bank will further strengthen the relationship by offering other banking and insurance products.
How has been the progress of the IDBI bank in the field of financial inclusion? The Bank has implemented financial inclusion in all the SubService Areas (SSAs) allotted to us. Apart from opening about 20 lakh savings bank accounts, we have introduced various other products such as Fixed Deposit, Recurring Deposit, Education Loan and Micro-Insurance.
IDBI Bank
SKV SRINIVASAN We have also conducted more than 250 financial literacy-cum-training programmes in the allotted villages in Maharashtra, Madhya Pradesh and Chhattisgarh, using street plays as a technique for imparting knowledge on banking services for rural population. Pursuant to the issuance of guidelines by the Ministry of Rural Development, we have also, in association with the Government of Maharashtra, established a Rural Self Employment Training Institute (R-SETI) at Satara which aims at imparting employment-oriented training to the rural youth.
How do you rate the contribution of your bank to social banking?
In the past, attempts were made to promote financial inclusion through MFIs, RRBs, etc. Do you think the renewed thrust on financial inclusion will be able to deliver? MFIs, RRBs have been trying to reach out to the rural population since long. But I believe that the one deciding factor that had been missing all these years is technology. Technology has the ability to reach a vast majority of population in a time-bound manner at lesser costs. Technology has also helped the bankers to explore the business potential in the rural areas. The current initiative of financial inclusion through the BC model will definitely bear fruit.
The IDBI Bank has undertaken various projects under its social banking initiatives. The Bank had tied up with Tata Institute of Social Sciences (TISS) and appointed 15 graduates as IDBI Fellows to work in villages and provide inputs on socio-economic conditions of the villages, so as to structure suitable banking and financial products. The IDBI Bank secured projects of the Government of Chhattisgarh for distribution of MNREGA wages to about one lakh beneficiaries and distribution of old age pension to about 25,000 pensioners of Raipur Nagar Nigam, both through the BC model. Besides, the Bank has also signed a Memorandum of Understanding (MoU) with TISS for undertaking developmental activities in the Ladakh region (Jammu & Kashmir), including adoption of a village and developing it as a model village, and other capacity building initiatives and improvement of basic services like Healthcare, Education, Sanitation, Drinking Water, etc. It has also tied up with Syngenta Foundation India (SFI) with the aim to promote Agri-Entrepreneurship for Sustainable Agriculture. The Bank provides loans in the form of Kisan Credit Cards (KCC) to farmers, as well.
How has the launch of Pradhan Mantri Jan-Dhan Yojana (PMJDY) helped in furthering inclusive growth?
Despite policy support from both the Government and RBI, much some gaping gaps remain. What do you think needs to be done to speed up the process?
opened over 10 lakh accounts under the scheme. Launch of other successive schemes like Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Mudra Yojana, etc. has further invigorated the banking fraternity in extending a helping hand to the excluded population.
The awareness among the banks about the business potential available in the rural areas has helped change the mindset and now all the banks are enthusiastically implementing financial inclusion. With the Government’s objective to distribute all the benefits, which are now more than Rs one lakh crore through Aadhaar-linked bank accounts, rural economy is likely to witness vibrancy in the coming years. Most of the state governments have also now decided to distribute various benefits through bank accounts. With the Central Government-RBI making efforts to overcome the difficulties faced by the banks in connectivity/ approachability etc., the national objective of inclusive growth through financial inclusion could be easily achieved.
I would say that the PMJDY scheme has given a big boost to the efforts of the Government and the banks towards financial inclusion. Before the launch of PMJDY, the entire banking industry had opened about 26 crore basic savings bank accounts during the preceding five years, with deposits of Rs 31,000 crore in them. Under the PMJDY scheme alone, the banking industry has opened about 19 crore accounts with Rs 27,000 crore of deposits in them. The IDBI Bank has
MFIs, RRBs have been trying to reach out to the rural population since long. But I believe that the one deciding factor that had been missing all these years is technology
How is the Bank leveraging the power of mobile phones and mobile Internet for achieving its goals of financial inclusion? Mobile technology-based service delivery initiatives are being leveraged by the Bank to deliver banking services to the unbanked population in rural and semi-urban areas across the country. IDBI Bank is actively participating with service providers and channel partners to build an eco-system using mobile technology & handsets, to provide services like cash in, cash out, money transfer etc. through various pilot projects with our channel partners..
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Punjab & Sind Bank
MUKESH KUMAR JAIN
Bringing Modern
TECHNOLOGY to CUSTOMERS Reaffirming his commitment of providing the basic banking facilities to its customers and enhancing adoption of cutting- edge technology to empower people to avail services through their smartphones, Punjab & Sind Bank’s Executive Director Mukesh Kumar Jain in tete-a-tete with Vishwas Dass of Elets News Network (ENN), talks about the changing dynamics of FI What initiatives Punjab & Sind Bank has taken towards financial inclusion? Punjab and Sind Bank (P&SB) is a small bank, but we have taken some extraordinary initiatives that set us apart from other leading banks. We are the leader in terms of zero-balance accounts. At present, there are 36.5 per cent zero-balance accounts in the industry and P&SB alone has eight per cent of these. Moreover, we have adopted Business Correspondent (BC) model and are directly appointing them, which is proving to be successful. 95 per cent of our BCs are certified from the Indian Institute of Banking and Finance and 100 per cent of our Regional Rural Bank BCs (RBBCs) have qualified requisite exams. Besides, we have adopted latest technology like our hand-held devices which are interoperable through RuPay cards. Another ongoing initiative is one wherein a person can take overdraft (OD) facility at any ATM or BC micro ATM. He can go to any ATM and ask for OD facility without facing any trouble. The trials for this facility are going on and would be commissioned soon. In addition to it, we have organised financial literacy camps where we have covered 150 villages and on an average 300 people are being imparted financial education every day. The P&SB has issued passbooks to all its customers and we have also opened around 13 lakh accounts under the financial inclusion scheme. The bank passbook gives a kind of confidence to the villagers and inculcates faith in customers. 99.6 per cent of our customers have already been issued RuPay cards and 88 per cent of them are even active. Normally, people seldom use RuPay cards but our customers are regularly using them. We are striving to
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Punjab & Sind Bank
MUKESH KUMAR JAIN
provide more and more credit facilities to our customers which would be profitable for both the banks as well as the customers. The Punjab & Sind Bank is also endeavouring to fulfil the key performance indicators set by the Government of India.
Financial inclusion (FI) is not a new concept. What is the difference between the initiatives undertaken by the incumbent government and the previous governments? In April 2005, the term FI was heard for the first time from the Reserve Bank of India (RBI) and then from 2006, it finally started with no-frills account which has recently been named as basic savings bank deposit accounts. Earlier, the focus was on the villages but now the government is focusing on every household irrespective of the place. Besides, the incumbent government is also issuing RuPay cards, which is empowering people. Insurance schemes have been added free of cost to the account holders. Also, Know Your Customers (KYC) norms have been made very easy. Now, people in rural areas can go to the branch and paste their photos on a piece of paper and open an account which was not possible earlier. However, they then have to produce a valid document within a year to prove their authenticity. Interoperability has been made mandatory to help people make transaction from anywhere. Besides, many banks are focusing on mobile banking. Even if people have a basic phone, they have been empowered to send the money. At the moment, zerobank accounts have come down to 36.5 from earlier 75 per cent. The government has also prescribed that banks should pay `5,000 to the BCs because unless you pay adequate money to the BCs, they would not take their work seriously. As of now, they are discharging their duties effectively because of the additional incentives provided by us.
How do you perceive the Pradhan Mantri JanDhan Yojana? The PMJDY has certainly proved to be a game changer for the country. This is the best way people can be brought under the ambit of financial inclusion. Now gradual upgradation is taking place. For example, initially we started with saving accounts then government introduced credit, OD and remittance facilities. Remittance is a very much required facility. Then insurance and pension schemes have already been provided by the government.
Please elaborate how technology has been adopted by your bank for FI implementation. Also, what is the benchmark that the industry should set for evolving technologies in this sector in the years to come? We have adopted cutting edge technologies and our
devices are eKnow Your Custmer (eKYC) and Aadhaar Enabled Payment System (AEPS) compliant. If a person has to open an account, he only needs to give his finger print impressions as entire data would be fetched from Aadhaar. A large number of accounts have already been opened through eKYC also because it takes very less time. Now people need not turn up at the branches every time they want bank services. I believe we should leverage mobile technology for the convenience of people. The mBanking is the future of banking. Now people can even avail banking facilities from their basic phone. Internet penetration in the rural pockets also needs to be increased to help people avail mobile-based services. The government has permitted Regional Rural Banks (RRBs) to do transaction through internet which was earlier not permissible.
Punjab & Sind Bank is the leader in zero-balance accounts. In the industry, there are 36.5 per cent zero-balance accounts and P&SB alone has eight per cent of it How important is FI for India? Kindly elaborate challenges involved in effecting FI? The banking industry has grown both vertically and horizontally but still that has not kept pace with the demand in the country. For any economic growth, banking industry is the lifeline of the country. One has to be connected through the banks to avail banking, insurance, remittances and other key facilities. Connectivity is a major issue which needs to be resolved and strengthening of the telecom signals to carry on transactions—particularly in remote parts of the country. Besides, lack of financial literacy is also a challenge. People need to understand that they need to pay their loans in time. Financial literacy is still very low in the country, which needs to be enhanced through aggressive campaigning. We are sensitising people about many government schemes. We also make them aware that they need not pay the BCs. Regional and caste diversity is another issue in the rural parts of the country due to which we usually appoint local BCs those who understand regional issues and are accepted among the villagers. Keeping the accounts active is also a challenge, which can be met through the process of Direct Benefit Transfer (DBT) for all types of government subsidies, pensions, MNREGA payments, etc. ď Ž
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Bank of Baroda G B BHUYAN
A Leap into
INNOVATIVE BANKING G B Bhuyan, General Manager – Financial Inclusion, Bank of Baroda, speaks to Arpit Gupta & Poulami Chakraborty of Elets News Network (ENN) on the numerous technological innovations proposed, planned and executed by the bank to help citizens earn and avail the financial services
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Bank of Baroda
G B BHUYAN
Give an overall view of financial inclusion initiatives taken by the Bank of Baroda compared to other nationalised banks. Bank of Baroda is one of the leading banks, which has about 48 lead districts and around 22,000 villages. We have appointed more than 8800 BCs, out of which 6100 in rural places and 2600 plus are in urban places. We ensure that first, all the access to the bank is through BCs. Secondly, we ensure BC and branch managers are interacting well. There are differences in every region, to combat those, we visit regional zones, and conduct meeting with officials on coordination between the BC and the manager to help build success for financial inclusion and mobilise more businesses. We have covered 60 regions where meetings are being conducted, comprising of the branch managers and BCs. We want to give a close coordination between groups, with sufficient earning for retaining BCs or team leader. In addition, we ensure that the customers are getting good services in remote areas. We ensure all products and services are available. We are going to introduce opening of new products like RD accounts, FDR accounts, mobile wallet, IMPS, instant money transfer, instant account opening, Aadhaar at BC point, and so on. We have already started the initiation by approval by our technological service provider, TCS, who is working on it for launching it and implementing it every month. This is required to help generation of income and to serve customers efficiently. Apart from that, there are some leisure activation like lead generation, loan lead generation, micro insurance, credit monitoring in small account, retail credit lead generation in housing and car loans, and many more. The BCs have been guided and told to conduct financial literacy programmes on a larger scale, so that customers know the benefits of the products and its availability. Under the Pradhan Mantri Jhan Dhan Yojana, about one crore and nine lakh accounts are mobilised and are going to be funded. We are trying insurance benefit to all our customers, so that they can avail the insurance and get at least one transaction in every 30 days, through the RuPay card. We intimate our BCs to make it compulsory as the scheme is very affordable.
Baroda M-Connect
Bank of Baroda presents a new channel for accessing your bank account through mobile phone. ‘Baroda M-Connect’ is the anytime, anywhere banking facility. It is easy to use. Customers just need to register themselves, download and start using Baroda M-Connect application. It is encrypted and a secure way of transacting with bank. Also, it is compatible with every mobile platform. It offers services i.e. mobile recharge, balance enquiry, mini statements and fund transfers within bank - Mobile to Mobile and Mobile to Account and other bank - NEFT and IMPS (Instant Transfer).
Do you see banking sector as growing in the digital space, and what technological innovations are you taking to implement such schemes? Digital India is the call of our Prime Minister. There are some 900 million mobile users, who have access to mobile technology and mobile banking on their fingertips. Citizens can now do transactions at home with just their mobile; they will no longer need to wait in long queues. A mobile wallet is such concept. We promote digital mobile banking,
The BCs have been guided and told to conduct financial literacy programmes on a larger scale, so that customers know the benefits of the products and its availability along with funding zero balance accounts, mobile seeding is equally important. Such seeding should be implemented thoroughly as mobile banking is the future.
What are the future plans of Bank of Baroda?
Baroda e-Gateway Bank of Baroda provides a facility, to receive payment online from any debit/credit card, called ‘Baroda e-Gateway’ (Internet Payment Gateway), which is a safe, secure and trusted payment solution for eCommerce/ online business. It is ideal for schools and colleges for fee collection, travel agents, merchants who wish to sell online products / services, associations to receive subscriptions from their members, government and semigovernment offices, municipal corporations, electricity boards and other utility payment services companies to collect dues/payments from consumers etc.
We have started giving benefits of mobile banking, and we are going to have our own platform for mobile banking apart from IMPS. Within a year, we are ensuring to launch numerous mobile banking solutions. To strengthen the BC network, we have appointed some corporate BCs who will work within the framework of modern technology. We have also initiated training programmes for them, in order to empower them. This is the beginning to financial inclusion. To make a rapid progress in this sector we have planned to have our own in-house certificate examination by all regions, in which the BCs will appear the exams, which will certify that they are working well to make a more efficient financial system.
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PSU EVENT REPORT
Knowledge Partner
wes.eletsonline.com 42
INVITING YOU TO BE A PART OF THE MOST VERSATILE KNOWLEDGE & NETWORKING PLATFORM ON EDUCATION The Emerging Happy Education Sector of Dubai presents a unique opportunity for the Global Educational Stakeholders to learn from this unfurling experiment in the desertland which wants to create a Competitive Knowledge Economy by 2021. The 6th edition of World Education Summit is thereby being convened in the month of February 2016 at Dubai. The Knowledge & Human Resource Development Agency (KHDA) has partne red with Elets Technomedia for the organization of this Knowledge & Networking extravaganza. Spread over multiple tracks of School Education; Higher Education; Medical Education & eGovernance in Education this mega congregation would see the participation of a significant number of progressive educational stakeholders specifically from INDIA & MENA region. Schools, Higher Education Institutions, educationTECH Corporates and other stakeholders of Education have got one or the other impelling reasons to attend this mega congregation.
FOR CONFERENCE INQUIRY, PLEASE CONTACT: Seema Gupta; seema@elets.in; +91-8860651643
FOR SALES QUERIES, PLEASE CONTACT: Fahim Haq; fahim@elets.in; +91-8860651632
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State Bank of India GITANJALI MISHRA
Breaking the Barrier of
FINANCIAL UNTOUCHABILITY Rural banking requires an innovative approach for better delivery of services in remote areas as it involves a large number of smallvalue transactions, says Gitanjali Mishra, General Manager, Payment Bank Initiatives, State Bank of India, in an interaction with Arpit Gupta of Elets News Network (ENN)
What are the initiatives undertaken by the State Bank of India in terms of Financial Inclusion? The State Bank of India has been involved in extending banking facilities to rural areas, prior to such requirement becoming mandatory for banks. It is an active participant in financial inclusion programmes having a pan-India presence. SBI is functioning as a state-level bank committee convener in 11 states and a union territory. The bank has also extended its network in rural and semi-urban areas in India by setting up a large number of branches. The number of rural branches has increased from 6,056 from March 31, 2014 to 6,254 as of March 31, 2015, and to 6,271 as of September 30, 2015. Rural banking requires an innovative approach for a better delivery of services in remote areas to a population with high illiteracy rates, a large number of small-value transactions.
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In order to cater to the rural customer's needs, the bank has developed alternative delivery channels for banking services and products through the Business Correspondent (BC) model. As of September 30, 2015, the bank had engaged over 58,000 customer service points of business correspondents in rural areas. Pursuant to the Pradhan Mantri Jan Dhan Yojna (PMJDY) scheme launched on 15th August 2014, the bank opened 44.5 million accounts upto 30th September 2015 and issued 38.43 million RuPay debit cards to eligible customers as of September 30, 2015. The number of Basic Savings Banks Deposit/Small accounts has also grown from 35.3 million in March 2014 to 72.9 million in March 2015, and to 85 million in September 2015. The value of transactions handled through BCs has increased by 73 per cent from `225.25 billion in fiscal 2014 to `389.73 in fiscal 2015, and to `294.14 billion in the six months ended September 30, 2015.
Give us a brief about the new customer-friendly products/services introduced by SBI in the financial inclusion market? In financial inclusion market, the remittances and savings bank accounts are the most popular products. In remittance space, we are focusing on enabling interoperable platforms like Immediate Payment Service (IMPS) and Aadhaar Enabled Payment System (AEPS). While in
State Bank of India
GITANJALI MISHRA
credit reporting/forecasting helps us to gauge the behaviour and target potential customers across the demographic/economic divide. Data analytics plays a larger role for tailor-made banking products to suit individual customers. Credit reporting tools and forecasting credit behaviour helps make lending to FI customers easy. We are also in process of implementing low cost quality-oriented service delivery platforms for FI customers. Banking delivery channels will shift from desktop/PC-based to more mobility-based (Tab banking/Android-based smart phone/NFC and App based). savings bank space, we are looking at ways to enable passbook printing, enhancing features under Recurring Deposit (RD)/Fixed Deposit (FD) to make it more customer-friendly.
What are the new technologies introduced in the Financial Inclusion and Payments System domain in the industry? Enabling access to quality financial inclusion services at affordable prices, delivered with convenience and dignity, can change the course of an individual household’s future. The coming years will see a more integrated cohesive approach between financial service providers, policy makers, regulators, technology providers to realise full financial inclusion in the country. We are seeing the rapid progress made under Pradhan Mantri Jan-Dhan Yojana (PMJDY) and Direct Benefit Transfer (DBT) schemes. The bank’s continued focus on the development of innovative, technology-enabled channels for delivering banking services to the rural population has resulted in the launch of a number of new initiatives, including AEPS, automated e-KYC, IMPS, Micro ATM and Cash at POS rollout at CSP/retail outlets, SB-OD facility under PMJDY and enabling infrastructure for DBT/ DBTL payments. The bank is also the sole sponsor for Direct Benefits Transfer for LPG subsidy (DBTL) - world’s largest account-based subsidy transfer programme, and has handled over 840 million DBTL transactions in a short period of time from November 15, 2004 to September 30, 2015.
To what extent technologies help SBI to build a strong relationship with customers and ensure loyalty? Mobility is important as cost of smartphones have gone down dramatically over the years. Ease of accessing the bank anytime anywhere through alternate channels (mobile/tab/PC) clubbed with specific products targeting an individual's needs is vital to ensure customer stickiness. Smart use of technology by way of data analytics,
How do you leverage social media and analytics in offering customer satisfaction? Social media has the potential to enhance usage of financial services through information sharing, influencing user behavioural patterns, direct marketing of financial services. Data analytics tools, credit reporting tools and forecasting credit behaviour helps make lending to FI customers easy. As more and more unbanked custmers started coming to the realms of banking, social media will play a big role in staying connected with them.
Social media has the potential to enhance usage of financial services through information sharing, influencing user behavioural patterns, direct marketing of financial services, etc What are your expansion plans for future? Our future plans are to strenghten BC channel by (i) drastically enhancing no. of touchpoints & (ii) making lot more services available through BC channel. We are also looking at usage of wallets by all segments of customers. Customer-driven transactions will see an increase leading to cost reduction for banks. The bank branch will be free to include more value-added services, asset gathering and focus on quality controls. BC will start moving up the value chain, handling more of credit info gathering, along with value-added services and will become a hub of knowledge dissemination centres. All in all, the aspirational India, at age group of 15 to 45, will break the barrier of financial untouchability. The banks will have a major role to play as these continuously have to engage in FI space. Financial Inclusion will no more be a government-driven initiative, rather banks will move to treat it as a profitable vertical.
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IDBI Bank
ROHIT SHUKLA
Prioritising
BANKING SECURITY IT, today is one of the quintessential aspects taken up and adopted in almost every field of operation, especially in banking, states Rohit Shukla, Dy General Manager (Security) & Chief Security Officer (CSO), IDBI Bank Ltd, while speaking with Arpit Gupta of Elets News Network (ENN) Please elaborate to us your role as a CSO of a renowned bank like IDBI. I am primarily performing the role of Chief Security Officer (CSO) and was also abreast with Information Security. Now we do have someone who takes care of Information Security also. The role broadly/primarily entails the following: l As the head of Banks Security Function, to conceptualise, plan the strategy, to implement security resources and to maintain it at high level of functional efficiency at all times, being a sensitive banking security function. l Also to plan, implement, training, discipline, and morale of bank’s security staff.
How do you perceive IT in banking in the years to come? IT, today is one of the quintessential aspects taken up and adopted in almost every field of operation. Needless to say, banking adopted it to the highest concern. One has to appreciate that banking has now become a basic human need of the masses, and is a reliable tool for disbursement of all Central/State Governments mass schemes to the citizens
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IDBI Bank
ROHIT SHUKLA of this country. IT is already largely driven by technology, which is seen as getting more and more intensely driven in the days to come.
How well do you think that Tier II and III cities have adopted with IT in banking sector in the recent times? Is this factor a challenge to the development in the banking sector? Tier II and III cities, by and large, have smaller offices and branches of the bank. Since most banks are riding on the banking software Finacle, a platform which provides the Core Banking Solution (CBS) system for most banks. We would be glad to announce that all branches and sub-offices of the banks are upgraded to the same technology platform as the corporate centre.
What according to you are the major security and risk management concerns for a banking institution today? Banking itself being a high risk operation, dealing in cash and valuables in lockers, besides ATMs invites a lot of risk inherently. Risk management concerns are as follows: l Physical guarding and securing of all assets, cash, lockers and customers banking interests at all times l Threat of frauds, burglary, spam, phishing, and other online frauds and deceptions l Guarding cash in transit and at Currency Chests
What measures do you have to counter mobile banking and internet banking risks to enhance banking security to customers? Broad measures to combat risks are: l Frequent intimation to customers by emails and SMS to increase their awareness of potential threats l Intensive usage of - passwords, PIN numbers, biometric access and being alert against spam, phishing, etc l Having strong and viable online security systems and checks and balances
As a bank you can educate your customers, but they have to take certain steps to protect themselves. How well are they protecting themselves from the threats that you see in the marketplace? Fortunately, IDBI Bank inherently had a strong system of internal and external checks and balances in place as a culture. The same is imbibed and inculcated in the cus-
Banking has now become a basic need of the masses, and is a reliable tool for disbursement of all Central/State Governments mass schemes for the citizens of this country tomers. The bank has not had any major issues on this account. The customers are constantly sent SMS and email alerts etc.
Please share with us any security enhancement plans and measures and pipelines from your institution. Our security enhancement plans broadly covers the following: l Setting up of security command centres, which constantly track all activities at ATMs and branches and evaluate potential threats etc l Engaging mobile quick reaction teams for human response l Deploying state-of-the-art security electronics viz. CCTVs, DFMDs, SHHMDs, Access Control Systems l Utilising RFID technology and its tags ď Ž
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Central Bank of India K K TANEJA
Taking Banking to
CUSTOMER'S DOORSTEP K K Taneja, Field General Manager (Delhi Zone), Central Bank of India, shares with Vishwas Dass of Elets News Network (ENN) about Financial Inclusion, PMJDY, role of technology in financial transactions and more Financial Inclusion (FI) is not a new concept. What is the difference between initiatives taken by the incumbent government and the previous governments? Financial Inclusion in our country took a front seat after 1990 when KC Chakraborty joined the Reserve Bank of India. He was very particular about the FI plan. A lot of initiatives have already been taken by the Union Government and the RBI but the role of the FI was limited to opening of the general accounts and opening of accounts in the villages having a population of more than 2,000 and providing basic banking facilities to citizens. In the new regime, the Prime Minister launched an upgraded version of FI named as Pradhan Mantri Jan-Dhan Yojana (PMJDY) which is
having a lot of new features in the scheme. It’s not only talking about banking facilities but about all the FI services. The main benefit of the PMJDY is that it includes accidental insurance and life insurance facility in the FI account. Moreover, they can also avail OD facility to some extent if the account is operated satisfactorily for a period of at least six months. I believe PMJDY has already created various milestones and entered in Guinness Book of Records but there are certain things which are yet to be operationalised. From the customers side, demand side sensitisation is required from beneficiary point of view. Overall, the scheme is showing tremendous results.
How do you perceive the Pradhan Mantri JanDhan Yojana (PMJDY)? Any country that aspires to become a developed country should cover at least 90 per cent of its population under financial inclusion or provide access to financial services. In India, the ratio was low before the launch of the PMJDY. However, there is a significant improvement in providing access to financial services to people after the rolling out of Centre’s flagship scheme. Most of the households have already been covered under the PMJDY and they would reap the economic benefit over a period of time. I am hopeful that India would emerge as super economic power in the coming years because of bold measures taken by the Government of India. The PMJDY has made opening of bank accounts simpler than earlier. Now, villagers need not to approach the banks or the business correspondents (BCs) as the banks are coming at the doorsteps of rural people to avail the facilities at zero balance. There is no need of maintaining minimum balance. Besides, there is an accidental cover of `1 lakh by taking RuPay cards and we are giving it to the account holders. Moreover, a person is also getting a life insurance cover of `30,000 along with the RuPay card which is a unique feature of PMJDY.
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Central Bank of India
K K TANEJA
Please elaborate how technology has been adopted by your bank for FI implementation. Also what is the benchmark that the industry should set for evolving technologies in this sector in the years to come? The main obstacle in FI was how to reach the customers. I would say that digital technology is the only solution through which banks can reach to the customers. We have created a hybrid model in which we are extensively using digital technology along with the BCs. These are linked to our main server which means those customers and BCs can function on real time basis, and not on offline mode. We have brought new technology called micro ATM, under which, a person of any bank can take money from any of our BCs that implies technology is bringing new dimensions. Similarly, a person who is getting an insurance cover need not to fill any form, as through RuPay card and NPCI he is automatically covered under those schemes. Government and banks are fulfilling the dreams of crores of people. I believe that bankers also need to change their strategy. They also need to create digital platforms for digital transactions. Otherwise, over a period of time, e-commerce sites or payment companies may eat the big share of banking industry. The banks have to create a robust digital system to compete with their competitors.
How do you see the future of m-Governance?
There is a significant improvement in giving access to financial services to people ever since the rolling out of the Centre’s flagship scheme PMJDY
Nowadays, even a common man has become more dependent on his/her mobile and wants banking services through mobile phones. The telecom operators have brought a revolution by slashing communication charges but internet penetration needs to be augmented especially in the rural parts of the country. If the Government comes with a certain set of norms to increase internet penetration in the remote parts, citizens would immensely benefit.
contacting people to maintain balance in their accounts and sensitising them towards the FI. Many people are unaware about incentives of PMJDY but we are making them aware to avail the benefits.
How important is the Financial Inclusion for India? Kindly explain the challenges involved in FI?
What initiatives has the Central Bank of India taken towards FI?
Financial Inclusion is taking place all over the world. Even the smaller countries are working to strengthen their FI initiatives to give a boost to their economies. Everybody is working on the FI as they know if people remain excluded from financial services, the country can’t grow. FI is a must for any country. Lack of awareness is one of the challenges in the field of FI for which we are making concerted efforts to overcome the problem. We have also opened financial literacy centres and counselling centres for the people. We have also able to reduce zero balance accounts. Though we have opened the accounts, unless and until customers use it, the FI is not completed. We have brought zero balance accounts to less than 30 per cent. Hopefully, by March 2016 it would be less than 10 per cent. We are
In tune with the PMJDY, we are the front runner in the scheme. We have around 50 districts where we have the lead banks. Contribution of the Central Bank of India is one of highest amongst all the contemporary banks. We have done an excellent job in Prime Minister Jeevan Jyoti Scheme and Prime Minister Suraksha Bima Yojana also. We have also taken urban financial inclusion, in which, we have gone to slum areas and roped in NGOs and self help groups to identify the excluded persons and opened their accounts. This has helped not only the people but the bank as well. The Central Bank of India has about 5000 branches in rural and semi-urban areas. We have also created micro ATMs where people can go and take out the money. We are focusing on increasing number of ATMs. We have 350 branches in Delhi zone comprising Delhi/NCR, Rajasthan and Uttarakhand. ď Ž
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Andhra Bank
V MURALI KRISHNA RAO
Informed Customers make
BANKING SAFE V Murali Krishna Rao, Chief Information Security Officer, Andhra Bank speaks with Arpit Gupta of Elets News Network (ENN) on the concept of enabling mobile/internet banking to initiate the notion of financial inclusion
As a CISO of a renowned bank like Andhra Bank, what are your roles and responsibilities? In all the industries, for sometime, IT was implemented with drastic speed. Later, in every organisation, it was realised that security and IT must move hand in hand not hand by hand. As per the Gopala Krishna Committee recommendations (RBI) CISOs are appointed /designated in banks and other institutions. Major turn in the above process is CISO will report to Risk Management Department headed by Chief Risk Officer, not to the Chief Information Officer i.e. head of IT. CISO will review the security requirements, its assessment, implementation for achieving the set objectives in information security angle. CISO is responsible for giving assurance to top management and stakeholders about the organisation’s security posture and provide feedback up to the board level.
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Andhra Bank
V MURALI KRISHNA RAO IT today is one of the quintessential aspects taken up and adopted in almost every field of operation, needless to say, banking adopted it to the highest concern. How do you perceive IT in banking in the years to come? Due to the technology leveraging, the brick and mortar banking is being done away with in some pockets. Technology has provided the customers with convenience banking – any time banking (ATM) and any where banking (Internet / mobile banking) across the globe. In the days to come, mobile banking – banking through mobile sets – will occupy the major space in the banking environment – due to the penetration of the mobile phones into the masses and its easy usage. However, it throws challenges of secure banking. Multi factor authentication – user ID, password, one time password or bio-metric authentication etc. are used to secure banking and safeguard the customers’interest. As a matter of principle, banks will never ask the customers to disclose their credentials like account number, card number, user id and passwords etc, over phone or any other means. However, of late, the theft of customer credentials, through phishing or vishing, is observed whereby the funds of the customers are withdrawn by the unscrupulous persons. In this regard, customer education and awareness plays an important role in understanding the technology and associated risks.
How well do you think that Tier II and III cities have adopted IT in banking sector in the recent times? Is this factor a challenge to the development in the banking sector? The new technological initiatives taken up at Tier II and III cities improved the infrastructure, technology, network facilities etc, enabled banks to adopt IT through core banking solutions with 100 per cent branch computerisation including rural and semi urban branches. With this all the new electronic banking channels i.e. ATMs, cash deposit machines, internet banking, mobile banking, wallet banking etc are available for Tier II and III Cities also, which enabled electronic banking, penetration into the rural India on a large scale, which again throws challenges for secure banking. Hence, there is imperative need for customer education and awareness of the technology and its associated risks.
What according to you are the major security and risk management concerns for a banking institution today? Cyber security and social engineering are two major security and risk management concerns for the banking
industry. Industry level and bank level security measures are taken to protect its environment from cyber-attacks. It has been a continuous effort of the Industry to alert and enlighten the customers against social engineer ing activities like phishing and vishing.
Mobile banking and internet banking has emerged to be the two most used technologies in the banking sector, though they have their own risks at the same time. What measures do you have to counter them to enhance banking security? In the backdrop of banking security cpncerns, we have ensured implementation of secured sites, multi-factor authentication– user ID, password, One Time Password (OTP) through registered mobile, verified by Visa security etc. Banks are contemplating usage of biometric authentication also to enhance banking security for the customers.
Cyber Security and social engineering are two major security and risk management concerns for the banking industry As a bank you can educate your customers, but they have to take certain steps to protect themselves. How well are your online customers protecting themselves from the threats that you see in the marketplace? It is the primary responsibility of the customers to take precaution not to become prey to the online fraudsters. The customers should not disclose or part with the credentials like Card No, CVV, Expiry Date, User-id / Password, OTP etc. We have been implementing multi-factor authentication and sending One Time Password to the registered mobile. We have been continuously creating customer awareness by way of SMS alerts, email and brochure etc.
Please share with us any security enhancement plans and measures in pipeline from your institution. Bank has already initiated steps for protecting its data and updating the security posture in tune with the technological enhancements and industry's best practices.
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Kotak Mahindra Bank DEEPAK SHARMA
Banking Goes the DIGITAL WAY Kotak Mahindra Bank is offering a wide range of one-of-its-kind digital solutions like Jifi, KayPay, Bharat App, etc that can solve problems of customers and enhance their banking experience, says Deepak Sharma, Executive Vice President & Head – Digital Initiatives, Kotak Mahindra Bank, in an interaction with Arpit Gupta of Elets News Network (ENN) What are your key responsibilities as the Head of Digital Initiatives for Kotak Mahindra Bank? As the Head of Digital Initiatives, I look after digital transformation, digital channel, mobile banking, internet banking and app, digital marketing, product, innovation and new payment solution for the bank. Digital touches every single aspect of Kotak, horizontally. We use digital platform as the tool and technology to meet our objectives at business level, customer level or backend operation level. We look forward how can we blend technology to create superior customer experience or acquire more customers or reduce the cost of transactions.
What are the new technologies and platforms Kotak offering to its customers? We have seen a rapid rise in online banking. About 40 per cent of our existing bank customers are using online banking. In the last 18 months, we have launched many innovative products, which have helped in bringing more customers to Kotak fold. Last year, we have launched Jifi which is a new age digital and social account that offers anytime access and on-the-go transactions. We are the first to foray into social and digital banking. With Jifi, it will be easy to recharge mobile, DTH via Twitter, etc. We have also launched Jifi Saver, a social savings bank account which can be seamlessly managed through Twitter and Facebook. It is a completely online account, with unique features like rewards, social connect, etc. We are the first bank using Twitter for banking called
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Kotak Mahindra Bank
DEEPAK SHARMA
Hashtag Banking. It provides basic services to customers including inquiry for balance, last few transactions, chequebook demand, among the total of 21 services under the name Hashtag Banking (#banking). We have also launched Social Commerce product integrating social media banking with e-commerce that allows customers to buy books or book movie tickets using Hashtag Banking, without even entering any payment details or address, etc. Our Social Commerce journey is in sync with our customers’ changing lifestyle and preferences. We will certainly add more dimensions to e-commerce transactions via Twitter.
When it comes to social banking, Kotak Mahindra Bank has many firsts to its credit. How successful have the digital banking products been? We have launched KayPay, the world’s first bank agnostic payment product for Facebook users to send money to each other in an instant (24X7). This revolutionary app lets a person transfer money from any bank by simply using the Facebook ID, Google+ ID, email ID and Mobile No of the recipient. For the first time ever, millions of bank account holders can now transfer money to each other at any hour of the day or night, without using net banking, or knowing various bank account related details of the payee. KayPay enables over 250 million Indian bank account holders from over 27 different banks to transfer funds to each other instantly by just choosing recipients from their Facebook friends list. KayPay offers a safe and secure platform to transact on the social networking site through a two-level authentication – Facebook user ID and password, and One Time Password (OTP). Further, both sender and receiver immediately receive notifications about the transfer, via SMS and on Facebook. We have launched offline multilingual mobile banking app ‘Kotak Bharat’ which requires no internet connectivity. It is an inclusive digital banking philosophy, where the common man from under-banked and unbanked regions can be benefited from mobile banking in his/her preferred language. Through this app, we are the first bank in India to enable fund transfer without internet connectivity and without adding beneficiary. This encourages cashless transactions by enabling customers to transfer up to `2,500 per day and at a time. The process of funds transfer is simple and totally secure as the transaction can only be initiated from customer’s registered mobile number. Further, customer gets a confirmation SMS on the registered mobile number, which is encrypted, and hence cannot be tampered. Kotak Bharat also enables customers to manage their savings and current accounts as well as credit cards.
What are the major challenges in implementing IT initiatives in Tier II and Tier III cities? How is technology expanding the banking sector in India? Language and data connectivity are major problems in small towns and remote areas. Keeping in mind the requirement of customers belonging to Tier II & III cities, we looked at creating an app which can work offline and doesn’t have language constraint. The concept of ‘Kotak Bharat’ mobile banking app is very unique. It doesn’t require data connectivity and the choice of language is also available as people mostly prefer to communicate in their local language. It is currently available in Hindi, English, Gujarati, Marathi, Tamil and Kannada, and will soon be launched in other Indian languages.
How do you ensure security of transactions? Security remains the first and foremost priority for the banks as they are the custodians of customers’ money. We ensure that the entire interaction between the customers and bank is encrypted. We follow a two-way authentication
KayPay enables over 250 million Indian bank account holders from over 27 different banks to transfer funds to each other instantly by just choosing recipients from their Facebook friends list process to check the transactions. Keeping this in mind, we launched a device authentication app. Every time a customer uses a mobile app, we authenticate the device. This itself acts as the first factor authentication. In addition, we have a risk management system to track the customer’s location and device details. we believe that innovation is not just about features but also about security.
What are your future plans? We always focus on solving the problems of our existing customers rather than just looking at the innovation for the sake of doing it. We have recently tied up with Google and launched a mobile store to integrate e-commerce with the mobile app. As customers are increasingly going on e-commerce websites to shop, we are working with over 100 large e-commerce merchants like Flipkart, Snapdeal, Myntra, Jabong, eBay, Amazon, Localbanya, Bigbasket, Ekstop and the others, to create a Kotak Reward Portal. We will be integrating with companies to offer shopping, entertainment, dining, payment solution, banking and other services. The whole idea is to make mobile app a ‘one stop shop’.
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SWIFT India
SAQIB SHEIKH
Strengthening
FINANCIAL RAILS FOR INCLUSIVE GROWTH Saqib Sheikh, Chief Operating Officer, SWIFT India, writes about the financial outlook in India, SWIFT’s platform for domestic financial transactions, technology and financial standards and more
I
ndia is making great strides in transitioning to a truly digital economy. Once a centrally planned, permit-raj based, lumbering market, the country is now a much more agile and vibrant economy. The private sector, led by individual entrepreneurs and small & mid-sized businesses, is waking the sleeping giant and driving business and technological innovation. This is largely due to our demographic dividend of young, persevering and literate populace, and also a consequence of easing regulations and improving infrastructure. Our national communications infrastructure is one of the pillars on which the foundation of this growth and innovation
Swift Facts SWIFT India was created by the Indian community, together with SWIFT, to serve India’s domestic market needs. The current joint venture partners include leading public and private banks: Axis Bank, Bank of India, HDFC Bank, ICICI Bank, Punjab National Bank, State Bank of India and Union Bank of India, with two more public sector banks joining the partnership shortly. SWIFT is a member-owned cooperative through which the financial world conducts its business operations with speed, certainty and confidence. More than
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is built. The speed, security and efficiency of communications of individuals and businesses are predicated on standardised and open networks. To support and strengthen this foundation, SWIFT is laying financial rails on which the financial sector too will grow and innovate. In partnership with leading banks of India and in consultation with financial regulators, SWIFT has established a joint venture and made live a highly secure and reliable messaging platform for domestic financial transactions. This platform interconnects and integrates banks, payments systems, exchanges, central counterparties, brokers and investors, such that they can seamlessly
10,800 financial institutions and corporations in over 200 countries trust us every day to exchange millions of standardised financial messages. This activity involves the secure exchange of proprietary data while ensuring its confidentiality and integrity. Our role is two-fold. We provide the proprietary communications platform, products and services that allow our customers to connect and exchange financial information securely and reliably. We also act as the catalyst that brings the financial community together to work collaboratively to shape market practice, define standards and consider solutions to issues of mutual interest. SWIFT enables its customers to automate and standardise financial transactions, thereby lowering costs,
SWIFT India
SAQIB SHEIKH and reliably communicate with one another and conduct their business with confidence. Payments, as an example, are seeing explosive growth in volumes. RTGS, or high value transactions, have consistently grown by 10 per cent a year, reaching 250,000 transactions a day, and NEFT, or one of the low value payments systems, sees more than 15 per cent growth year-on-year and now processing 4 million transactions daily. This growth, combined with the proliferation of variety of instruments and intermediaries such as payments wallets and facilitators, puts enormous stress on the technology infrastructure of our financial institutions. By comparison, SWIFT globally guarantees the secure delivery of over 27 million transactions on peak days and over 5 billion transactions a year, between 10,800 financial and corporate institutions worldwide. To cope, banks rely on a disparate set of channels and standards to communicate with customers, process payments, exchange trade finance and treasury instruments, and report to regulators and government agencies. Furthermore, these channels and their standards evolve at different paces. The associated costs and complexities constitute a large portion of spending on IT in the banking sector, as much as `7.1 crore annually as per our estimates. More importantly, mindshare of critical product management, IT and operations resources are pulled from customer-facing value-creating projects. The impact is inefficient allocation of scarce funds and resources on channel integration and operations that provides no competitive advantage. While many channels exist today, SWIFT alone offers a uniform technology and financial standards across market segments. The business community no longer needs to operate a complex and risky patchwork of technology stacks when communicating with their peers, customers and market infrastructures. Whether remitting payments, collecting funds, hedging supply chain or foreign exchange risks or investing, the entire market can use a unified plat-
reducing operational risk and eliminating inefficiencies from their operations. By using SWIFT, customers can also create new business opportunities and revenue streams. SWIFT, headquartered in Belgium, has offices in the world's major financial centres and developing markets. SWIFT has had particular success growing its network in Asia-Pacific. In total, the electronic financial messaging provider has linked up with 13 payment systems and around 3,000 financial institutions in the region. SWIFT has been in Asia Pacific for more than 30 years, with eight commercial and support offices, as well as an Operational Central Control Centre and a corporate services hub.
SWIFT globally guarantees the secure delivery of over 27 million transactions on peak days and over 5 billion transactions a year, between 10,800 financial and corporate institutions worldwide form over a common financial language to communicate with one another and conduct business with predictability and confidence. ď Ž Saqib Sheikh can be reached at saqib@swiftindia.org.in
Comprehensive solutions SWIFT India provides a comprehensive solution comprising of messaging standards, infrastructure and security framework, all backed by SWIFT SCRL’s world-class 24/7 premium support services.
Banks With the SWIFT India channel, banks can consolidate all their communication channels with external parties onto a highly reliable, scalable and secure messaging platform, thereby reducing complexity and costs.
OCTOBER - DECEMBER 2015 | bfsi.eletsonline.com | BFSI
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ePaisa
SIDDHARTH ARORA
Improving Payment Ecosystem THROUGH ePAISA
ePaisa is making it simple for retailers, restaurants and other offline businesses to accept any wallet, easily through the ePaisa app, says Siddharth Arora, CEO, ePaisa in an interaction with Elets News Network (ENN) don't have to hold cash on-site and it also gives consumers a better experience at checkout.
ePaisa has tied up with over 150 telcos to facilitate global mobile recharge recently. How has the tie up proved to be and how has it enabled ePaisa to gain momentum in the market? This is a value-added service, which allows our merchants to earn more revenue. Instead of logging online to recharge their international numbers, tourists or customers can simply walk into any ePaisa merchant store and recharge their numbers for the required amount. The merchants get a commission of upto 8 per cent from service providers to provide this service to his/her customers. The tie-up has proved to be a productive way for the merchants to sustain in this highly competitive market, increase their foot traffic and revenue. This move has enabled ePaisa reach out to more small business owners in cities with high international tourism. Merchants, especially in Agra, Cochin, Khajuraho and Hampi love this offering.
What are your plans for tying up with cooperative banks? In a recent move, ePaisa has tied up with online wallet providers- Paytm, Citrus, and Mobikwik. What was the idea behind this move by the brand? Our belief is that if you want to digitise India, you have to digitise the point of sale. We are very bullish on the use case for wallets. They have grown fast - there are about 140-150 million mobile wallet users in India (compared to the 20 million credit cards in the entire country) but they are mostly used online for money transfer or recharges. There is no ubiquity yet, and only when there is real acceptance in brick and mortar stores will they replace the use of cash. ePaisa is making it simple for retailers, restaurants and other offline businesses to accept any wallet, easily through the ePaisa app. Businesses can expect their sales to shoot up with traffic driven from the wallets. There is less friction with mobile wallet payments, where no money exchanges hands. That means better security for brick-and-mortar stores, as they
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Cooperative Banks in India are going for core banking solutions and are often faced with multi-channel integration issues. To improve customer services, they have to integrate for every module or interface and add-on features and these additional costs are a huge challenge to these cost constraint banks. With the help of ePaisa, this can be done especially for common channels such as POS and VAS. The banks can start their own POS acquiring and integrate it seamlessly. They can offer POS Terminals, and allow payments acceptance through cards with the help of a card reader, retaining their current account holders, who would otherwise move to other banks offering them this solution. They can set up and operate merchant acquiring business through POS on a revenue sharing model, decide their own MDR and charge their merchants on every swipe while reducing their costs. ePaisa is PCI-DSS certified and can handle the entire life cycle of onboarding to fraud management for banks. ePaisa’s VAS services are also being used by banks to enable mobile wallet, DTH recharge, bill payments, ticket booking and gift voucher issuance at ATM.
ePaisa
SIDDHARTH ARORA Banks like New India Coop Bank in Mumbai are successfully using our entire solution offering.
Could you share with us any new products that have been introduced by your brand in the year 2014-15? The latest launch we have is our universal wallet acceptance platform. We have launched the service with India’s three largest mobile wallets i.e Paytm, Mobikwik and Citrus, enabling mobile wallet payments in brick and mortar stores. With this, ePaisa™ will power its merchants, all over India, to accept payments from 150 million mobile wallet users, in-store or remotely without going through cumbersome individual integrations with each company and get the funds into their bank account the next business day. If you want to purchase something for `1000, you can even split the payment between your cash, card and multiple wallets balances. We are adding all wallets into ePaisa over the next few months. Earlier in the month of August, we also introduced Bitcoin as a mode of payment at an ePaisa enabled store. With this, they can accept payments from more than 30,000 Bitcoin users in India. The digital currency which is created and held electronically enables customers to directly pay the merchants just like cash. There is no need to provide any payment information, thereby making this cryptocurrency more and more popular in India.
What new technologies have been introduced in the payments and financial domain in the industry in recent times? How updated is ePaisa in accordance to the same? ePaisa has been at the forefront of payments. We removed the payments at checkout from the process and allowed the customers to make mobile purchases from its aisles using the card reader. Tap and Pay based on NFC cards will be seen more and more in the coming few months. ePaisa already is future ready with a NFC certified mobile card reader and we will launch it as soon as there is enough traction in the market. Apart from payments, we also provide a complete commerce solution encompassing inventory management, analytics & reporting and marketing tools to help businesses grow. Innovations like this show that mobile payments are improving a global payment ecosystem that’s long been due for an upgrade.
To what extent technologies helped your brand to build a strong relationship with customers and ensure customer loyalty? How ideal an option is mobility in this perspective? ePaisa is a fintech company. Our DNA is technology. We are using technology as an enabler to communicate with our prospective and current customers. Customers
chat with us online and get real time in-app support, talking to a real person right from within the ePaisa app. We are providing areas on our website, where customers can answer their own questions or seek answers from others. We are using email and whatsapp as a medium to improve customer service and quickly respond to their needs. Unified communications and data-gathering tools such as customer relationship management software help us maintain customer relations. All our tools work from anywhere and without the need for customers to call us. Handling a merchant's billing, inventory and payments needs is a serious business that requires immediate answers. And customers love us for always being available to help them instantly.
ePaisa’s VAS services are also being used by banks to enable mobile wallet, DTH recharge, bill payments, ticket booking and gift voucher issuance at ATM How do you leverage social media and analytics in offering customer satisfaction? We have embraced social media and analytics to better assess how our brand resonates in the marketplace and to determine how to target the right customer. We also monitor and respond to brand conversations on our social media thereby delivering a unified brand experience across platforms. We not only leverage social media for ourselves, but also extend our understanding to our merchants as well, helping them listen to their customers and be more active on their own social media platforms.
To what extent do you think personalisation technologies can help create a better perception about financial services and products among the customers? We have a robust and active merchant community that uses our services and is hungry to grow and offer more and more features that ePaisa provides them.
What are your targets and plans of expansion? ePaisa is all about big data from small merchants. This defines our expansion plans. We want to reach out to every small and medium enterprise in India (45 million of them) and enable them to digitise their point of sale, accept payments and communicate with their suppliers and customers better. That’s why ePaisa is multi-lingual and cloud based. We are in growth phase now and our first milestone will be reaching 25,000 businesses.
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Palo Alto
SEAN DUCA
Share Threats, STAY SECURE The best way to guard against any security threat is to share it with others; as the information is shared, others also get to know the nature of that particular threat and the ways to guard themselves against any future attack, observes Sean Duca, Vice President & Regional Chief Security Officer (CSO) for Asia Pacific, speaking with Vishwas Dass of Elets News Network (ENN)
The government possesses huge data which is highly vulnerable to security threats. What kind of security framework should be built to protect the data? Firstly, it is important to understand the kind of data owned, its actual value, who is going to access that data, its location and whether there is a third party securing that data. The moment one is able to answer these queries, it is easier to understand the kind of security required. I think every organisation, whether government or non-government, has something of value, which needs to be guarded. In India, Cloud Computing is getting popular fast. So, the issue of security of data must be addressed at the same pace.
How do you see the security solution market shaping up in the upcoming years?
Give us an overview of the Palo Alto Networks’ products offered in India and across the globe. Nine years earlier we launched our first technology – NextGeneration Firewalls, and that’s what probably people know us for. Palo Alto is a security company focused on security enabling applications to run on an organisation's network to prevent any type of known attacks. It also tries quickly closing the gap of turning an unknown threat to a known threat to prevent any possible damage taking place. Today, we have the platform that caters to the needs of our customers, both in public and private sector.
How does the company relate with the Government of India's Digital India initiative? With Digital India programme in full play, the focus needs to be on security aspect of the digital technologies. We have people all around processing technology, but we need to address the challenges of privacy and security vis-a-vis Digital India initiative. Palo Alto has the infrastructure to throw security cover around the initiative.
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I think it has interesting times ahead. The threat landscape has changed and evolved over the past 20 years. The attack is faster these days. So, we first of all need to know the fire power of the enemy, the kind of applications they use. There is a need to control the applications and defend against the threats popping out there. We all believe that information sharing is critical and we started with Cyber Threat Alliance (CTA). It focuses on real time sharing of malware and samples of advisory campaign are planned in real time.
You have said that India would require over 20,000 skilled professionals to propel the Digital India initiative. What are your suggestions to make campaign a success? There are couple of things and not a single answer and a lot of countries are trying to do similar things. The private sector probably needs to step in. We need to start teaching people what is really required for security. We can have even a curriculum for the purpose, on the lines of Australia. It is important to get to the grassroots.
What is your business plan to increase company’s market share in India? We have witnessed phenomenal growth. For the past four years, we are working in India and have an amazing list of customers. We tried and kept growing. Globally, we are growing around 55 per cent year-on-year. In Asia- Pacific, we are growing at more than 80 per cent. So, we see a tremendous
Event Report MCS 2015, MUMBAI
Cooperatives on a Roll in
MAHARASHTRA
The cooperatives were initially confined mainly to the field of agricultural credit, but today they have spread to other sectors such as food processing, marketing, housing, dairying and textiles. The Maharashtra Cooperative Summit held in Mumbai recently highlighted the conferencecum-exhibition and award and brought key decision-makers, leaders and influencers to deliver insights into the current scenario of the cooperative movement and the road ahead. The exhibition showcased innovation in the products and solutions to gain exposure. The awards and felicitation showcased the ambitious strategies, cutting足-edge technologies, innovative projects and initiatives taken by the cooperatives.
The number of cooperative societies is estimated to be about 2.30 lakh, and the total members are 509 lakh, of these, nine per cent were in agricultural credit, 10 per cent were in non-agricultural credit and 81 per cent were engaged in other activities. Maharashtra has a 32 per cent share of cooperative banks in the country. Of the 1,618 urban cooperative banks, Maharashtra has 526, the highest for a state. Total deposits in cooperative banks in the state is to the tune of `1,73,800 crore, which accounts for 68 per cent of deposits in such banks in the country. Cooperative banks in the state have issued loans to the tune of `1,20,100 crore, which is 65 per cent of loans given by cooperative banks in the country. With 4,839 branches and
1,576 ATMs, cooperative banks have made their presence felt in every nook and corner of the state. In rural areas, cooperative banks are the only banks available to a large section of population. The objectives of the summit included speakers and participants getting an insight into the broader governance, IT priorities and initiatives. This event was a suitable platform to build relationships through exclusive network settings, ask experts all the questions, and get an expert face-to-face opinion on specific issues. The business fraternity got an exposure and chance to forge and diversify partnerships with governments, businesses and other organisations, capitalise on innovation opportunities and make intelligent, informed IT investment choices.
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Event Report MCS 2015, MUMBAI
Inaugural Session The Cooperative Movement In Modern Era
Maharashtra is the pioneer state in the country to initiate cooperative movement. Envisioning the opportunities ahead, the Maharashtra Cooperative Summit 2015 aimed to explore and boost the opportunities available in the state
Technological prominence gaining momentum
Shekhar Charegaonkar, Chairman Maharashtra State Cooperative Council
The aspect of technology is gaining prominence in the cooperative sector as we move ahead and progress in delivery of banking services to a large set of population in Maharashtra. Although initiatives such as Core Banking Solutions have already begun in a big way among banks, for technology upgradation we need to understand the foundation of the value chain of delivery of banking services by cooperative banks and
then scope the work of technology and ways in which it can assist the banks. The main foundation of cooperative sector is the service sector. The banks provide financial services to the public sector and thus the banks are expected to have the capacity to respond to the issues of the public at large. The cooperative banks have a strong standing on their capacity to ride through difficult times due to their strong base and connect with their customers. Unlike the large public sector and private banks that receive capital assistance in case of unwarranted situations to bail them out in difficult times. These financial assistance from the central government is not there for cooperative banks and are usually even though being much smaller than public sector banks are left to manage the crisis on their own. Thus the entire base of the cooperative bank is the society and the customers it serves. And it is this mutual trust that empowers
banks management and its employees to ride through difficult times and financial crisis. Thus when we consider technology in cooperative banks, it is like a double edged sword. The technology can do wonders for a bank of it is adopted knowing its pros and cons for the banking value chain and a vision or foresight of use of the technology impact on the banking operations. Blindly following the trend of what others are using will not give results for cooperative banks when it comes to technology. There is a need for the bank management to understand and identify the powers of your manpower or employees and that of technology to have a balanced approach. The customers should benefit at the end of the day. Also with bank information now available on many devices, one should also consider security solutions. The core values of cooperative bank is commitment, character, target oriented, and customer friendly.
Aggressive approach necessary The cooperative movement in Maharashtra has been a leader in India. Nearly, five crore people are related with this sector in Maharashtra and touches the day to day lives of all in the state in some direct or indirect way. These include banking, credit societies, agricultural societies, processing units, fisheries and many more. There have been some basic issues with the cooperative from its inception. It has been a key player in inclusion of society and economy of the state, it has been important in GDP, but the question that we need to relook is whether the system is delivering at the last mile. Even if we consider just banking services of cooperative banks, it has been the urban cooperative banks that have taken most of attention, district cooperative banks in rural areas with the mandate of serving the poor villagers have somehow missed to deliver the objectives. Maharashtra has agriculture as
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Dr SK Sharma Principal Secretary, Cooperation, Government of Maharashtra
main occupation, which is mainly a rain-fed agriculture. The risks are very high of being rain dependent and we are facing the unrest among the farmers in the last two years due to inadequate rainfall. Today, there are 1.36 crore farmers in the state however our reach has been limited to only 50 lakh farmers. Nearly 80 lakh farmer
are out of reach of the banking system in the state. Hence, the 60 per cent of farmers are seeking credit assistance from moneylenders or informal institutions for their financial needs. There is a need for aggressive and innovative approach to get these large populations of farmers under the financial services. We have to leverage on the large scale and reach of the cooperative movement as it became widespread and deposits in these banks increased but the system and technology to manage it has not progressed much. Today we are have become static in our progress and we are not technology ready, lack systemic evaluation systems and lack responsibility base. Another major hurdle, pulling back the acceleration of performance of co-operative sector is the of lack of quality manpower. Until we invest in human resource we cannot expect this sector to deliver results as desired.
HEALTHCARE LEADERS FORUM
Event Report MCS 2015, MUMBAI
Session 2 Leveraging Technology, Driving Cooperative Banking (Technology Presentations) The session focused on the technological innovations that the banking sector is leaping through, like mobile banking and internet banking while throwing light on the pros and cons of it
Revolutionising banking
George Verghese Sr Vice President - Sales & Marketing, VSoft Technologies
There is going to be a revolution in the way banks are using technology. As new devices and platforms arrive in the market, we will adapt to more technologies. This will be multi-channel banking. We
began with branches, then we had ATMs, internet banking, IVR based banking and now its mobile banking. As a bank we have to manage multiple systems and technology. This system gets complex in this environment. Thus, we have Omni-channel banking that we recently launched in India and this will make customers of banks easier to use multi channels. This is device agnostic, platform agnostic and resolution agnostic. Anytime and anywhere. Same service across all devices and add on host of benefits to the user. It makes it much easier. All banking features and functionalities of transactions from accounts is available Back end admin makes it much easier. Security features have been included like multi-factor authentication and security features. Cheque truncation has been
mandated by RBI. Also the customer can deposit by anywhere by taking a image of your cheque and sharing it your bank which then clears. This is also included in our omni-channel product. Making banking easier and more convenient. The product offers regional language support to deliver service across branches in any state. India is getting younger with less than 45 years of age and more technology savvy. The co-operative banks get to move ahead from relationship banking and refernce based approach. Mobile technology has caught up fast with mobile wallets and their expectation is that their banking provided should be more pro-active. One single system that gives them a holistic single user experience that benefits banks from a transaction and business perspective.
Banking on cloud Cloud technology offers shared services model of computing for co-operative banking. As banking technologies have gained pace in the past years, we have witnessed bankers move away from the traditional mode of banking of space and equipment. Current banking would be made elastic and more on-demand run by specialists-this would be a community co-operative banking solutions. Technology is just an enabler to run your banking technology that is seamless and on-time every time. We need one location for computing and one for disaster recovery for business continuity. This insures you from the risks of operating from a centralized architecture. This demands a complete suite of infrastructure that needs to managed and monitored. This will be a shared services based opex model that runs on a pay per use model. The banks can use the service
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based on demands and are elastic to scale according to your needs. The secondary location is more of a compliance need, and our solution that offers you an option that takes away your capex and reduces costs. This creates an optimized banking infrastructure. The new concept of door-step banking has become a need as the country of digital haves and have-nots. So we provide connectivity right upto the last mile to have optimized delivery of services. Banking of everybody should have banking at doorsteps. And tab banking which supports banking ecosystems anytime anywhere. This again will run on a shared services model that will enable your outreach. A make in India story with all the building blocks and customized model that comes with on-demand model offers you value money. The model of core banking services offers the
Hirak Mukherjee Consultant - Technology, Sify Technologies
co-operative banks to avail all of technology solutions without owning infrastructure, technology and space via shared technology platforms. These are managed under highest security guidelines. You as you grow IT grow with you according to your needs. This is the community banking model and it is here to stay.
digitalLEARNING is pleased to announce the School Leadership Summit in New Delhi on January 29, 2016, with the objective of having an open dialouge between various school administrators to make education better in their organisations. Education in India has embraced internet and technology to reach out to last man, tucked away in a corner. With
the availability of computers, internet, smart classes, digital lab, smartphones, tablets, projectors and many other digital devices, it makes more sense to invest in technology, infrastructure for education to become accessible to all. We need to build mechanisms which can take the wealth of knowledge to the masses. While we are closer than ever to achieve these objectives, more needs to be done.
Organisers
schoolsummit.eletsonline.com
Event Report MCS 2015, MUMBAI For the people, by the people
Hrishikesh Jadhav Regional Sales Manager, Array Networks India
Co-operative banks are by the people and for the people. 19 percent of Indian are using Internet. And the government is promoting Digital India and National Knowledge Network
and many more will make sure Internet is available to each and every household. Mobile banking transactions are growing by 45 percent year-on-year. The recent trend has been of Core banking services upgrades by co-operative banks. Scaling up our network architecture is important and the customer experience becomes very important where the end user response is critical to this. We have application delivery networking where in us solutions from L4-L7 have. Application Delivery controllers where we have availability, scalability, performance and security by load balancing. That manages your systems and acts like web accelerator and improves your end user response time
by 80 percent. In terms of security this is a RBI guideline to have a reverse proxy device and has web application firewall. We have another range of products that ensure application security across any device on mobility and have two factor authentications in place. There is an encrypted tunnel from the end user device to the datacenter with second level of authentication. With many branches now opening in remote locations, there would be a need for VSAT connections and thus needing optimization solutions. We also have a solution that will improve your application response time and accelerate your data transfer rates and improves your bandwidth utilisation.
Secure banking essential Today there are enough and more incidents that indicate that mere installation of CCTV camera does not prevent crime. These device can only report an incident that too only if it is monitored on a daily basis. The review of the many incidents that have occurred recently in our cities reflect that it has been observed that the lack of pro-active approach and attention to CCTV footage on a daily basis or maintenance of the camera has been a major reason for lack of evidence. Thus co-operative banks should get more alert on the status of their CCTV camera and look at the footage on a daily basis. This will not just improve the crime rates, it will also alert you on the productivity of your staff, due
Gautam Garodia CEO, Comsur
care being taken of your customers and daily monitoring of your assets. It may seem a daunting task to monitor 24 hours of footage
daily, however we offer you a technology solution that will require you to take out one hour from your daily schedule and browse the footage. CCTV is not enough and we need to explore more ways to strengthen citizen security. Maharashtra is exploring to enact an internal security act similar to the one in Andhra Pradesh. The police force cannot manage the security needs of every citizen, and a lot of onus comes on us as bankers to upgrade from CCTV to newer technologies that offer higher surveillance intelligence. The three main tasks is need to review the footage daily, second is to take back-up and third is to make a standard incidence report format as a support document to help police authorities.
Technology, boon or bane? We are the key security solution providers to your banking operations. Keep you and your operations safe. Last year the total financial loss due to security lapses was `24,000 crore. BFSI sector has been the most affected by cyber attacks. This year the prediction was that India will have more than 3 lakh cyber crime incidences and so technology can be a boon or a bane depends on how you can use it. The key challenge once an cyber attack occurs is to track the source of the attack. This problems gets magnified by the proliferative use of pirated software. The key areas of vulnerability in
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your banking technology systems includes end point security for data protection, Internet data gatekeeper, protection of branches connectivity, mobility device protection and external threats/internal threats and IoT will also complicate threat environment in banks. In terms of some key aspects of alertness when using mobile applications firstly use official applications, also avoid using banking apps when in public wi-fi as they do not have data security measures, avoid links and attachments as they are the best way to breach the security infrastructure and always log out.
Vivek Tuljapurkar Vice President - R&D, Quick Heal Tech Pvt Ltd
Event Report MCS 2015, MUMBAI
Session 3 Strengthening Rural Cooperative Banking through Technology: Opportunities & Challenges (Panel Discussion) The session highlights the industry’s need to thrive on banking technology for elevating the rural cooperatives
Hassle-free banking
Hemendu Sinha Business Head, B2B Solutions, LG Electronics
The needs of a business segment are very different from the consumer market. This is even more so customized for the banking and financial services industry. We under our B2B segment have a major reach across
many public, private and financial services providers to assist them in their needs of integrated display systems and digital devices and solutions for quick customer service and communications. In addition we also offer security camera packed with surveillance features that lets you fulfill your banks requirements in a hassle-free manner. Our Digital Signage Systems and Solutions offer a simple, easy to use technology that use our intelligent screens for display and we are a leader in this segment to provide you with the latest technology that is used worldwide. Simplicity, customization and easy to use solutions for display have been made by us to communicate the various important messages for the bank. In the rural areas,
the major challenge remains to be power, and here the use of projector systems needs innovative approach to address this challenge. These can be used to show videos, messages, images, text, audio can all be displayed on a single screen. In rural banking power is a major concern for us. So our projectors are on battery backup and do not require a connection from the PC or any other power source and are anywhere anytime solutions. These can be on USB, mobile or any other device and these can be connected to the projector and displayed on the screen. These are been used in many rural branches and can also be implemented by the co-operative banks. We have our CCTV solutions that are mainly used to track threats and alerts.
Digitisation, the way forward
Vikesh Ramchandani Assistant Director, Canon India
The common thread between Canon and banks is documents. And these documents can be makes the life difficult for a bank as it has to process thousands of these throughout the day. Even today in technology era, research shows that 90 percent of bank information as documents is stored in hard copy in some form or the other. New account document, KYC, loan documents, teller documents, audit documents, cheque and many more. Natural calamities can come without a warning and take away all the information which is next to impossible to recover. The second biggest hurdle in documentation is time as 60 percent of
manpower depends on documentation. Digitization is the way forward. There are many advantages such as direct transfer at the click of button enhance image quality using software, indexing & searching, multiple users access, reformat, edit and reprint it. We now have a broad range of products such as document readers, portable scanner, workgroup scanners, departmental scanners, network scanners, cheque scanners UV/non-UV. These have 100 pages per minute capacity and can be paced according to your needs and at affordable prices. Our service has national presence and supports your needs anytime anywhere.
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Event Report MCS 2015, MUMBAI Simplicity, beauty of technology
Krishna K Velagapudi Country Manager- Infrastructure Services & Security Services, IBM
The beauty of technology is realized only when it is simple. The importance of disaster
recovery has gained importance in BFSI sector. It is a parallel set up that takes the back-up of your core banking operations on a remote location. RBI has given more focus on the importance of DR in recent times. The facility of a DR helps a CIO commit in case of an accident re-start of the entire Core Banking operations and minimum data loss. This demands certainty and accuracy. Datacentre has multiple components and gets multiple SLAs to manage the site. IBM has a virtual server recovery that comes at a very low capex and commits recovery time objective and recovery point objective.
Generating credit facility vital The rural cooperative banking ecosystem has three tiers, at the apex has Maharashtra Cooperative Bank; this is followed by middle tier of district central co-operative banks (DCCB) and there are close to 21,000 primary agricultural credit cooperative societies (PACS) spread across the villages. These form the integral part of the rural co-operative credit infrastructure. The main role of the rural co-operative banks is to provide credit facility to agriculturist in the state. The rural areas have plenty of scope for the use of technology to avail financial services. We aim to have common software that will link all the PACS to DCCB banks and
Pramod Karnad Managing Director, Maharashtra State Cooperative Bank
to the apex bank. These enable us to have an MIS centralised system in place.
Digital connectivity necessary
Chandrakant Dalvi Commissioner, Department of Cooperation, Government of Maharashtra
eGovernance in any process always starts with opposition and skeptism. This was so even when the public sector banks had
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decided to go on Core banking. However, after 25 years today we are reaping the benefits of that decision and digital banking is a reality today. The similar situation exists for the cooperative banks in Maharashtra vis-avis digital banking. Urban cooperative banks have taken a lead. There is a need that all the PACS and DCCBs, NABARD, MSC come up with a combined solution that will help banks to go digital. This will connect them with each other and help MIS with CBS. That will assist in analysis of data and understand the challenges of the cooperative sector in the state. The cooperative bank management officials should also change mindset towards technology and IT.
Skill in banking, need of the hour
Dr Vinayak Tarale Maharashtra State Cooperative Banks Association
The association has always been part of hand-holding and addressing technology adoption concerns of Maharashtra Co-operative banks. As a banker, the key areas of technology implementation from a bank’s perspective can be divided into computerization, manpower, regulation and IT technology & service provider. The management of co-operative banks has to take decision on the investment on technology as a trade-off between manpower and what they will do once the computer starts doing their work. In co-operative banks there is large branch manpower and productivity of staff was a decisionmaking consideration. Thus we should also have some benchmarks on technology in Maharashtra co-operative banks so that they can upgrade in gradation ahead. The aspect of manpower capacity building is usually not taken into consideration by the service providers and hence the implementation and adoption of any technology in co-operative banks does gone maximum benefits and reaches half way and dies out. Skills and training is the need of the hour as most of the banks now have non-technical staff. The IT companies need to work hard on their understanding of the financial services ecosystem of rural cooperative banks. The needs and margins of these banks are very different. Also the pricing mechanism followed by the companies needs to have a relook and monitoring by some agencies as rampant selling of products on arbitrary parameters has become a practice and needs to be addressed so that the rural banks are not victims of malicious IT vendors.
Event Report MCS 2015, MUMBAI
Session 4 Safe & Secure Cooperative Banking (Urban & Rural): The Way Forward The session focused on the need for and issues in acquisition of technology for elevating the rural cooperatives
Technology not always a boon
Murali Urs Country Manager, Barracuda Networks
Technology has become core to performance in all sectors including BFSI.
And as banking is today available all the time, there is a technology that is working behind the banking applications 24*7. The CIO or CTO of a bank today manages many and more vendors for different functions and monitors the IT infrastructure for its continual performance. There are various reasons and decision parameters that result in the purchase of technology by a bank and it has become complicated with any multiple technology and many vendors. There are lengthy sales cycles in banks for technology purchase as they take time to scope and shortlist technology and vendors, pricing is complicated for license and users, deployments becomes difficult as usually many vendors are involved to do one job and you are trying to make everyone work
together. All these add to the cost of running an IT infrastructure in the bank. Information of the bank is now available on almost every device and bank has to manage that all the right information is available in most secured way to these customers. We provide cloud solutions for the end to end needs of the customers and simplify things for the bankers. The advantage of the cloud solution is that you don’t need the asset but you can avail all the technology features at the click of a button. eMail security, network security, back-up and multiple technologies can be managed from one console. It is all available to us and we can assist co-operative banks and are industry leader in back-up, content security, messaging security, application security, email archive and many more.
Chandrakant Dalvi, Commissioner, Cooperation Department, Government of Maharashtra, presents Speaker's memento to Dr M L Sukhdev, Chairman, Maharashtra State Cooperative Bank. Dr Ravi Gupta, CEO, Elets Technomedia Pvt Ltd (Right), is also seen in the picture.
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Event Report MCS 2015, MUMBAI
Excellence
Rewarded
The Maharashtra Cooperative Summit held recently in Mumbai felicitated with awards the cooperatives with ambitious strategies, cutting足-edge technologies, innovative projects and initiatives. The awards were presented to those banks and other cooperative bodies, which had achieved success in implementation of financial inclusion solutions in their zones or designated areas. These awards are a motivation to those programmes/ initiatives for building a holistic development and inclusion.
Awardees, along with other dignitaries, pose for a group photograph.
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OUR PAST COOPERATIVE EVENTS `
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Maharashtra Cooperative Summit
After the huge success of Gujarat & Maharashtra 4th March 2016, Cooperative Summit, Elets Bengaluru, Karnataka Technomedia Pvt Ltd is all set for Karnataka Cooperative Summit in March 2016. The one-day summit will bring key stakeholders from the government and private sector to deliberate & collaborate for transformation of cooperative societies in the state through collective approach
OUR PAST SPEAKERS
Dr Shailesh Kumar Sharma Principal Secretary Cooperation Department, Government of Maharashtra
Shri Chandrakant Dalvi Cooperation Commissioner, Government of Maharashtra
Ajay Bramhecha Vice President The Maharashtra Urban Cooperative Banks Federation Ltd, Mumbai
R N Joshi CEO Gujarat Urban Cooperatives Bank Association
Dollar Bhai Kotecha Director Junagarh Commercial Cooperative Bank
Jyotindrabhai Mehta Chairman Gujarat Urban Co-operative Bank Federation
Mukund Abhyankar President National Federation of Urban Cooperative Banks & Cooperative Societies Ltd
Abhishek Joshi Chairman SMC Bank
BD Dhotre Chairman The Akola Janta Comm Co-operative Bank Ltd
Gujarat Cooperative Summit
OUR PAST PARTNERS
and many more....
and many more.... For Queries: Gaurav Srivastava, cooperativessummit@egovonline.net, +91-8527697685 Elets Technomedia (P) Ltd Stellar IT Park, Office No: 7A/7B, 5th Floor, Annexe Tower, C-25, Sector 62, Noida, Uttar Pradesh - 201309
cooperative.eletsonline.com
2015
Information Safety & Citizen Security