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Our Vision
Sub-K makes day-to-day transactions
accessible, affordable and trust-filled,
to facilitate inclusive growth of the
under-reached and create a
more prosperous society
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What Sub-K Means (or why we are ‘Sab kay liye’ and ‘less than 1000’)
• < 1000 m from the customer Accessibility
• Cost of < 1000 paisa(Rs. 10) per transaction Affordability
• Each transaction up to Rs. 1000 Adequacy
• Each BCO to serve up to 1000 customers Outreach
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The Evolution
BASIX Group / IGS (a Section 25 company of the group) since 2007
• Pioneer in FI; SHG-Bank linkages
• Executed Project Bhamasha – a rapid scale-up; enrolled over 4 million people
• Operated FI on a pilot scale with State Bank of India and Central Bank of India
• Currently operating a successful Business Correspondent operation with KBS Bank
• Awarded a pilot project in June 2010 with Syndicate Bank (leading Indian nationalized bank having 2494 branches; Global Business at Rs.243,436 crore as on June 2011) to do financial inclusion in 117 villages in and around Anantapur district in Andhra Pradesh
Changes in RBI guidelines and the environment in 2010
• For-profit companies permitted entry as Business Correspondents
• Government focus on Aadhaar (UID) and Swabhimaan
• Formation of National Payments Corporation of India (NPCI) for interoperability in banking – brining in ability to for customer to transact at any bank’s BC outlet
• Sub-K incorporated as an independent company offering full-spectrum services
• Created and patented a robust transaction engine – ViTranSP – addressing issues in all current processes
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The Evolution - continued
Sub-K : Incubation Phase (August 2010 – March 2011) • Built a scalable technology platform for multiple banking services extension
• Designed and established ground processes – piloted in 3 districts in India
• Established BC relationship with Ratnakar Bank (a scheduled commercial bank in India, in growth mode aiming to double its network by setting 100 more branches in next two years)
• Continued service to IGS on Syndicate bank implementation
• Sub-K cut its teeth operationally; 47,000 customers across 216 BCOs in 5 districts across 3 States
• Inducted senior leadership team and tested systems, certified ISO 9001:2008
• Experimented with alternative revenue sharing and operating models
Sub-K : Stabilization Phase (April 2011 - July 2011) • Syndicate Bank awarded contract for 172 additional villages based on success of pilot
• Optimized business model for being a true banking services extension for partner banks
• Launched mobile top-ups as an additional revenue for the BCSA
• Expanded customer base to approximately 65,000 across 320 BCSAs as of June 30th
• Signed up nationwide contract with Axis Bank
• Currently pursuing relationships with 12 additional banks
Sub-K launch – 1, August 2011 – 12 months from inception
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Sub-K’s Strategy
• Bring banking and other services to the under-reached through a Sub-K Agent who connects them to the larger world using a simple mobile / Internet-based technology device
• Why the strategy works:
– There is a large a growing need in semi-urban and rural households to save… and easy banking access through Sub-K makes it possible
– Sub-K appoints general stores as Agents. They are omnipresent so reach is large and a trust-relationship with customers is prebuilt
– Transactions are on an online platform making them affordable. They are reconciled instantly using all-pervasive mobile connectivity and Sub-K’s patented technology, to the delight of service providers
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Mobile,
Satellite Top-ups
Utility Bill Payments
Electronic Benefits Transfer*
Saving Facilitation
Subsidy Management
Remittances
Micro Insurance, Pensions
Credit (Home loans, Edu
loans)
Cater to Financial Needs++
Under-
Reached HH
Sub-K
* Government employment guarantee
and social payments, does electronically
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8
With a Customer Centric Approach
Financial
Inclusion
Universally Integrated
Services • Subsidy payments
• Welfare schemes
• NREGA Payments
• Social Security
payments
• Other Social transfers
such as SGSY, Indira
Awas Yojana, etc.
Non Banking
• Mobile Top-ups
• Utility Payments
• Micro-Insurance
Banking
• Savings Banks
accounts
• RD, GCC, KCC, etc.
Sub-K’s
goal is to
serve the
needs of a
rural
household
starting
with
Financial
Inclusion,
EBTs and
ultimately
UID
Services
EBT Payments
Sub-K
Banks
BCOs
Govt.
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… Experienced Leadership Team
Mr. Vijay Mahajan, Co-Founder Sub-K, Chairman BASIX Group
• Vijay Mahajan is a social entrepreneur and Chairman of BASIX. He was also the Chairman of CGAP for 2010-11
• He started work in rural economic development in 1981.In 1983, he founded an NGO – Pradan. In 1996, realizing the need to attract mainstream financial resources, he conceptualised Basix, institution devoted solely to promoting rural livelihoods
• He was a member of the Committee on Financial Sector Reforms, chaired by Raghuram Rajan and also of the C. Rangarajan Committee on Financial Inclusion. He also serves on the board of Insurance Regulatory Development Authority (“IRDA”), and the Micro Finance Development and Equity Fund
• On numerous boards and advisor to several State Governments and Planning Commission of India
• Author and industry icon; winner of numerous awards and recognitions
Mr. Amit Mehta, Co-Founder Sub-K, Managing Director & CEO Sub-K
• Head sales and Marketing – VAS , SDP, and Mobility at Tata Consultancy Services , In charge of promoting and developing the VAS solutions,, was also responsible for launching and promoting RFID based solutions for various industry segments
• Founder and Conceptualizer, Intelligent Security Solutions SBU at Danlaw Technologies India Ltd
• Vice President and Co founder of Bartronics India Limited, he was a part of the founding team at Bartronics and was responsible for identifying partners, building and promoting bar code based solutions
• Chief Technology Officer, IRIS Smart Cards, the first Smart Card Manufacturing Company in India (later acquired by Bartronics India Ltd
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& Experienced Leadership
Sandeep Nath Head, Marketing &
Empowerment
• 22 years in Branding
& Marketing as
consulting company
CEO
• Engineer from IIT
Varanasi; MBA from
IIM Kozhikode
Dinesh Sarvodey Head, Projects & Quality
• 11 years in quality
management
(certified black belt),
six-sigma, process
outsourcing
• Graduate in
Computer Science &
Statistics
Ratnakumar M Head, BC Acquisition
• 20 years in Sales
& Distribution,
Merchant Banking
& Insurance
Girish Narkhede Head, Strategic Planning
• 13 years in FI,
Telecom VAS,
Software System
Products, Telecom
OSS, and Retail
domains
• PG in Mathematics
from IIT Mumbai
Ramesh Baswa Head, Technology
• 15 years in IT
industry involving
Telecom and
Financial domains
• Electronics and
Communications
Engineer from
REC/NIT, Warangal
Babla Sharan ED & Head, Transactions
& Operations
• 21 years of IT
experience including
as founder and head
of Mobility Solutions
& VAS at TCS
• Engineer from BIT
Mesra
Visweswar V Head, Bank Relations
• 30 years as Senior
Banking Executive
spearheading
Technology
Implementation and
CBS Integration
• B.Sc, B.Tech, AMIE,
Cert.Course IPR
(WIPO-Geneva)
Binu Raj Pillai Head, Human
Resources
• 18 years in HR
Management and
Recruitment at
Airtel & TCS
Suryanarayana S Head, Accounts
• 25 years in
Accounts, Internal
Audit and Finance
in BSFL and other
organizations
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Key Achievements
Parameters YTD 1st Quarter For the Month Since
Inception till Sep-2011
Till Mar-2011 Apr – Jun
2011 Jul-2011 Aug-2011 Sep-2011
No of banks /telcos/service providers signed up 2+1 1 1 1 - 5+1
No of Districts Sub-K went active in during the given period 5
2 1 10
4
22
TRANSACTIONS No of BCSA appointed 253
85 11 43
36
428 No of BCSA transaction enabled 102
75 36 16
26
257 No of BCSA that have transacted within the given period
51 123 144 166
172
200
No of Customer applications submitted to the Bank
46,439 11,880 3,206 5,833
9,043
76,401
No of Customers registered by Sub-K 40,372 8,773 7,505 4,125
2,753 63,528
No of Transaction enabled Customers 16,014 17,571 2,486 6,464
3,772 46,307
Total Deposits Rs. 587,682 Rs. 937,028 Rs. 820,343 Rs. 1,242,036 Rs. 1,536,700 Rs. 5,123,789 Total Withdrawals Rs. 239,252 Rs. 472,598 Rs. 340,688 Rs. 523,782 Rs. 743,650 Rs. 2,319,970 Amount of savings collected (INR) (Tot Deposits – Tot Withdrawals)
Rs. 348,430 Rs. 464,430 Rs. 479,655 Rs. 718,254 Rs. 793,050 Rs. 2,803,819
Total Amount of banking transactions (INR) Rs. 826,934 Rs. 1,409,626 Rs. 1,161,031 Rs. 1,766,138 Rs. 2,280,350 Rs. 7,443,759 Mobile Top-Up Transactions (INR) Rs. 424,503 Rs. 224,411 Rs. 4,479 Rs. 45,452 Rs. 49,526 Rs. 748,371
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Key Achievements
Parameters
YTD 1st Quarter For the Month Since Inception
till Sep-2011 Till Mar-2011 Apr – Jun 2011 Jul-2011 Aug-2011 Sep-2011
FINANCIALS & HR
Income for Sub-K (INR) Rs. 3,127,010 Rs. 2,501,320 Rs. 394,772 Rs. 1,366,274 Rs. 1,880,294 Rs. 9,290,670
Expenditure for Sub-K (INR) Rs. 10,837,522 Rs. 14,831,534 Rs. 4,325,151 Rs. 5,652,569 Rs. 4,963,000 Rs. 40,557,776
Net profit / (loss) for Sub-K (INR) Rs. -7,710,512 Rs. -12,330,214 Rs. -3,930,379 Rs. -4,286,295 Rs. -2,957,706 Rs. -31,267,106
CAPEX on Sub-K (INR) Rs. 646,732 Rs. 1,106,188 Rs. 12,991 Rs. 0 Rs. 23,023 Rs. 1,788,934
No of employees in Sub-K (Cumulative)
69 67 66 85 103 103
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Trends in Registered Customers Vs BCOs Appointed
40,372
45,636 47,741 49,145
56,650
60775 63528
253
288 300
338 364
392
428
0
100
200
300
400
500
600
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11
Registered Customers BCOs Appointed
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Trends in Transactions
26 114 643 954 499 602 921 1092
3349
6903
10925 11706
0150030004500600075009000105001200013500
0150300450600750900
10501200135015001650
Cash Deposit
Transaction Amount (`000) No of Transactions
1 3 42 59 52 77 107 153 213
341
524
744
030060090012001500180021002400
0100200300400500600700800
Cash Withdrawal
Transaction Amount (`000) No of Transactions
88 291 1,507
3,503 3,999 4,457 3,673 4,466 4,444
9,281
16192 16903
- 1,500 3,000 4,500 6,000 7,500 9,000
10,500 12,000 13,500 15,000 16,500 18,000 19,500 21,000 22,500 24,000 25,500
No of Transactions
No of Transactions Expon. (No of Transactions)
48
83
129
88 74
87
130 106
155 126 136
165
Avg Transaction Amount
Avg Transaction Amount
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Business Plan Dashboard Key Assumptions
PAT Analysis Break-even Payback
Sub-K break-even month 30 43
Sub-K break-even month name Dec-12 Jan-14
Pilot till end
Jul 2011
FY 10-11 FY 11-12 FY 12-13 FY 13-14 FY 14-15 FY 15-16
Number of Operative Units Number 3 37 149 317 401 473
Number of BC Sub-agents Number 253 4,410 25,180 66,800 1,06,790 1,35,110
Number of Customers served In Millions 0.05 4 20 53 85 107
Number of Employees Number 69 470 1,897 4,381 6,312 7,831
Total Income In Millions 3 99 721 2,150 4,073 6,079
Total Expenditure In Millions 7 181 763 1,894 3,010 3,731
Profit Before Dividend and Tax (PBDT) In Millions (4) (82) (41) 256 1,062 2,348
Dividend - - - - - -
Provision for Tax - - - 45 372 822
Profit After Tax (PAT) In Millions (4) (82) (41) 211 691 1,526
Cumulative PAT In Millions (4) (87) (128) 83 774 2,300
Profit After Tax (PAT) % -134% -83% -6% 10% 17% 25%
Fund Requirement
Equity from BASICS In Millions 31 20
Equity In Millions 0 55 60 - - -
Debt In Millions 0 35 30 6 - -
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Bank’s Point of View on FI
• Public Sector
– Primarily looking to meet government mandate to reach out to all citizens
– Account opening key agenda to provide coverage
– Support Government payments through the network setup
– Some of them are looking at building business models around the same
– Is compensating TSPs and BCs on a fixed price basis to sustain the mandatory criteria
• Private Sector
– Has understood the business opportunity in villages
– Is looking at providing services in villages, thereby also charging customers for the same
– Multi-product crosssell/upsell being looked at for each micro-transaction
– Profitability is key – but building the network at the moment is most critical
– Eventually are looking at creating presence and outreach
– Incentive is purely service based
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S.No Charge – Parameter: FI Frequency Public Sector Pvt Sector
1 BCSA – Appointment One Time No Yes
2 Account Opening One Time Yes Yes
3 Monthly Maintenance Per BCSA Monthly Yes No
4 Fee for maintaining Monthly Average Balance Per Account
Monthly No Yes
5 Fee for Transaction Per Transaction Yes Yes
6 Remittance Per Transaction Yes Yes
S.No Charge – Parameter: EBT Frequency Public Sector Pvt Sector
1 BCSA – Appointment One Time No Yes
2 Account Opening One Time Yes Yes
3 Customer Transfer – For Existing Customers Only
One time Yes Yes
4 % Money Disbursed Monthly Yes Yes
Pricing for FI & EBT
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S. No
Bank Financial Inclusion
Remi-ttance
Asset Generation
Micro Products
TSP Only EBT/Social Payments
1 Syndicate Bank Yes No IIP IIP No No
2 Ratnakar Bank Yes No IIP IIP No No
3 AXIS Bank Yes Yes IIP IIP Yes Proposed
4 ING Vysya Yes No No No No Proposed
5 Citibank Yes - - - - -
New Relationships Being Pursued 1. ICICI Bank: Countrywide partnership for FI + NPI + EBT
2. Bank of Maharashtra: PSU Bank. Looking at alternate technology for FI implementation in Maharashtra
3. IndusInd Bank: Integrated banking services rollout. Potential in UP, Rajasthan and Tamil Nadu
4. Allahabad Bank: PSU Bank looking at urban FI in Hindi belt
5. Punjab National Bank: FI implementation partnership for Punjab
Current Bank Relationships
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Sub-K Approach for Banks • Identify best suited Kirana outlets in a village to act as Human ATMs (BCOs)
– in Urban, Semi-urban and Rural Areas
– Outreach, local area trust, “business-savvy”, and convenient access
• Enable, Equip and m-Power BCOs to provide hassle free service – Micro-ATM kit is “invested” by BCOs
– Prefunding by Sub-K and BCOs against which all transactions are settled; no cash management and reconciliation by Banks
– Train the BCOs to position various banking services
• Sub-K is a Full Services provider for BC model – Technical Integration between CBS, Sub-K system, & Micro-ATM kit
– BCO Identification & setup, Training and Go-live
– Customer Acquisition, Savings Promotions
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Sub-K Approach for Banks
• Low-cost Transactions using any real-time online connectivity
– Vernacular Voice based user-friendly mobile interface
– GSM/GPRS connectivity on mobile
– No cards, no wallet, no bike, no rentals, no cash-carrying
• Provide a broad spectrum of services with BCO as a one-stop shop with simple point-of-sale device
Deposits
Withdrawals
RDs / FDs
Remittances
Funds Transfer
Bill Payments
EBT / NREGA
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Key Differentiators
Sub-K
• High Customer Service in Village
– “24X7” accessibility – the Agent lives in the village/nearby
• Zero Risk for Bank
– Pre-funding (e.g., float management) by BCOs and Sub-K
• Hassle Free Operations
– Online real-time transaction & settlement; no cash management by Bank
• Low cost of Transaction, Infrastructure and Operations
– No cards, no wallet, no bike, no rentals, no cash-carrying
• One stop shop for multiple Services to Consumer
– Ensures loyalty and lasting customer relationship
Traditional FI
• “Agent” not available every day, when needed
• Bulk cash of Bank handled by mobile agent - high risk
• Offline operations, no view on current status of floats with agents
• High cost of smart card and service delivery. High failure rate of cards
• Only Cash in/Cash out services available; limited use investment
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Sub-K Transaction Platform - ViTranSP
• ViTran means distribution in Hindi. Patent in progress for ViTranSP
• Patent in progress for “Integrated Transaction Fund Management”
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Help Desk in 5 Languages
1. English
2. Hindi
3. Telugu
4. Kannada
5. Marathi
3 Banks Integrated Syndicate Bank
Ratnakar Bank
Axis Bank
Services Supported Cash Deposit
Cash Withdrawal
Balance Enquiry
Mini Statement
Fund Transfer
Mobile Topups
95% ViTranSP Availability
95% Reconciled Transactions
Enhancing User Options
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Tech-Delivery Matrix
Channel
GSM
GPRS
Internet
Authentication
Voice
Fingerprint
PIN
Txn Guidance Method
Server Resident
IVRS
Mobile Resident
IVRS
Server Resident
GUI
Physical Outlet
Kirana Shop
IT Kiosk
Self (Consumer)
Legal Status
BCO
CSC
Non-BCO, Non-CSC
Kiosk
Txns from home (under development)
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Financial Savings accounts
Deposits/Withdrawals
Remittances/Transfers
Micro credit
Micro pensions
Micro insurance
Cash / Credit cards
Social
Mobile / DTH top-ups
Weather updates
M-agriculture
M-health
M-education
Emotional (the dependency factor)
Utility / Tax payments
DEMAT / Investments
Travel reservations
EBT Payments like NREGA
Pension disbursement
G2C Services
The services in GREEN are currently on offer. Services in BLUE will be provided shortly. PURPLE are at CSCs only
Service Portfolio: BCO/CSC
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Collects cash and walks away
Transaction Process
Sub-K User visits BCO / CSC to transact (make a withdrawal)
OR
Equipment at Outlet
Time: 90 secs
Outlet invokes Sub-K application on his phone or desktop
Sub-K Txn Engine
ViTranSP
Authen-tication
Database
Bank CBS and / or
other service
provider server
Vernacular IVR comm
SMS ping confirms txn. Bluetooth triggers receipt
Signs Outlet ledger book
Customer takes signed receipt Seeks FP/Voice
Authentication
1.Verifies Sub-K pool 2.Checks BCO float 3.Validates cust a/c
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• Our Platform ‘ViTranSP’ is recognized amongst the Top 100 ICT innovations of the year by SKOCH at SKOCH Digital Inclusion 2011
• Sub-K has an ISO audit and it has been recommended for ISO 9001:2008 certification for our processes
• Sub-K also had undergone a pre-assessment of Information Security Standards confirming to ISO 27001
• Planning for SAS 70 audit towards financial reconciliations and settlement processes
Awards and Accolades
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BCO as the Go-To Point
Train the BCO – at store and
on field
Educate the customer on hows and whys
Audit both audiences and
understand community
needs
Help the BCO earn more and
become the apex
Create promotions
and incentivize
desired behavior
Develop and launch products that consumers
need
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3
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4
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