FINO Business Proposal

8/2/2019 FINO Business Proposal

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FINANCIAL INFORMATION NETWORK AND OPERATIONSLTD.

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BIOMETRIC SMART CARD BASED TECHNOLOGY SOLUTION

FOR

FINANCIAL INCLUSION

FINANCIAL INFORMATION NETWORK AND OPERATIONS LTD.

C-401, Business Square, Chakala, Andheri Kurla Road, Andheri (E), Mumbai-93, INDIA

PRIVATE & CONFIDENTIAL




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Financial Information Network And Operations Ltd. is incessantly working towards its vision of

making banking available to the unbanked masses. In FINO, we are committed to ensure the most

reliable, transparent and fast yet secure mode of financial services to reach to the remotest of the areas in

the Nation.

In a matter of 2 years we have become the only technology solution provider in Financial Inclusion with

more than 1.5 Million customer base. We have covered one third part of the country with 200

districts with in our reach. We think our work has just begun with our focus on development of a

transaction platform and robust back-end to capture and maintain customer demographics and transaction

data. With the scaling up of FINO operations, FINO envisages a goal of enriching the services provided to

clients with as many utilities as possible. FINO believes in making itself strong enough in its service

efficiencies that it proves to be a source of immense value addition not just to the Financial Inclusion as a

field but to the Nation as a whole.

“ All men dream but not equally. Those who dream by night in the dusty recesses of their minds

wake in the day to find that it was vanity; but the dreamers of the day are dangerous men, for they

may act their dream with open eyes to make it possible”

-T.E. Lawrence

Copyright (2006) FINO Ltd.All rights reserved. This material is confidential and proprietary to FINO Ltd and no

part of this material should be reproduced, published in any form by any means,electronic or mechanical including photocopy or any information storage or retrievalsystem nor should the material be disclosed to third parties without the expresswritten authorization of FINO Ltd.

TrademarksAll trademarks used in this document are the property of their respective holders.FINO expressly retains all of its right, title and interest in its trademarks. No one shalluse FINO trademarks without obtaining prior express and written consent of FINO,





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except already expressly granted in a different written arrangement between theparties.

TABLE OF CONTENTS

EXECUTIVE SUMMARY 4

COMPANY OVERVIEW 6

ORGANIZATION STRUCTURE 10

SERVICES OFFERED 12

TECHNICAL SOLUTION 14

TECHNOLOGICAL DEVELOPMENTS 21

Annexure 1 23

Annexure 2 26

Annexure 3 35

Contact Details 36





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EXECUTIVE SUMMARY

Financial Information Network & Operations Ltd (FINO) proposes to offer its Biometric Smart Card

based Solution which has been successfully implemented for various public and private sector banks as

part of their Financial Inclusion project. The solution has been designed to address electronic delivery of

banking & other financial services in the urban / semi urban / rural areas by adopting forward-looking

business & architectural principles built on advanced technologies and products from world-class

vendors. A right blend of social concept, practical business scenarios, advanced technologies, skilled

people and matured processes has enabled superior feature set of the proposed solution. FINO’s

solution primarily consists of following components:

- Enrolment System

o Capturing demographics data, fingerprints, photograph and other required details

o Application form sourcing / printing and processing through authorized Business

Correspondents

o De-dupe check based on Fingerprints

o Account opening in respective bank’s system through customized interfaces

- Smart Card Personalization & Issuance

o Central personalization

o Over the Counter (OTC) Personalization & Issuance

- Handheld devices to conduct financial transactions in field in offline mode through smart card

based fingerprint authentication and synching data with Server in secured way using various

connectivity options like PSTN / CDMA / IP etc.

- Central Host Applications





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o Card Management System

o Agent Management System

o Transaction Acquisition & Switching System

o Customer & Transaction Data Management System with customized interfaces with

bank’s core banking system along with MIS Reporting

o Automatic Fingerprint Identification System ( AFIS)

The salient features offered by FINO’s solution are:

• A fast & effective delivery channel to reach the underserved / unbanked citizens

• Better information management, as the data was captured at the grass root level in electronic

format, transmitted electronically in a secure manner.

• Better monitoring of transactions and reducing fraudulent activities by usage of biometric based

authentication

• A single point Delivery channel for various Banking products (Saving, Loans, Remittances etc) &

Govt. Programs (NREG, SSP etc)





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COMPANY OVERVIEW

Financial Information Network and Operations Limited (FINO) was incorporated in June 2006 and

launched on 13th July, 2006. The company was founded with the single objective of building

technologies to enable financial institutions (FIs), Banks, Micro Finance Institutions (MFIs), Insurance

Companies and Government to serve the underserved and the unbanked sector – to achieve the goal of

inclusive financial services. FINO has since then been developing Financial Services Delivery Systems at

very affordable charges to enable Banks/MFIs and above mentioned institute.

FINO aims at being sectoral entity with stake holders being Banks, Financial Institutions, Insurance

Companies and Foreign Financial Institutions. FINO endeavors to create a financial and information

supply-chain into the customer last-mile – customer household – and bring the vast majority of the

underserved Indian population, currently estimated at 500 million, into the economic mainstream.

FINO has built a platform based on cutting edge technologies including, Smart Card system, Core

banking system, ID management system and interfaces to 3rd party systems . The platform is very

flexible and modular and new technologies and requirements will be added on to increase the robustness

and utility of the system.





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The FINO system is a transaction platform that is available to different entities across the financial and

non-financial worlds. In addition to providing a range of services, FINO is dedicated to working with its

customers and partners to stimulate the growth of the overall market, both in the financial and non-

financial markets.

Building the client base from the current size will require an unprecedented level of partnership and

collaboration among players in the value chain. Also, for governments and institutions, to reach out to

individuals for providing various facilities and benefits, need a medium to uniquely and effectively

identify and record transactions. Rather than simply “selling” its services, FINO is actively developing a

network that includes customers, banks, governmental agencies, agents, and other participants in the value

chain that FINO is enabling through its shared technology platform. Participants will derive value from

the aggregation effect of the network that go beyond the benefits they enjoy from FINO’s services alone.

FINO will work with its partners to increase the attractiveness of participating in the network, expand the

number of potential customers, and build the base of clients who could then be served by different

entities. FINO will ensure that its services and market position allow it to easily engage with new entrants.

CLIENT BASE

FINO is providing service to end-customers to enable their integration into the system so various stakeholders wanting to serve this customer base can use the FINO network to reach out in an effective and

efficient way. It is FINO's business to provide services to these organizations that provide financial and

other transaction-based services to these clients.

FINO is currently working with Bank of Baroda, Corporation Bank, ICICI Bank, Indian Bank,

Oriental Bank of Commerce, Punjab National Bank, Union Bank of India and United Bank of

India. FINO is also in talks with other banks prominent amongst them being, Axis Bank, Allahabad

Bank, Canara Bank, Dhanalakshmi Bank and HDFC Bank.

• There is currently 10 MFI’s operating on FINO Back end platform and another 5 MFI’s are under

implementation.

• FINO is working with Government of Andhra Pradesh, Himachal Pradesh, Madhya Pradesh &

Tamil Naidu to distribute NREGA and pension payments.

• We are working in Insurance vertical with ICICI Prudential, ICICI Lombard and LIC.





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FINO is also the technical advisor to the World Bank and Ministry of Labour and Welfare for Rural

Health Insurance for Rashtriya Swasthya Bima Yojana.

OTHER KEY PARTNERSHIPS

FINO has partnered with a number of stakeholders that are aligned with its vision.

These include:

Investors - FINO has raised capital Rs 80.0 crore from diverse set of entities broadly shared equally

between Public Sector Banks (30%)– Corporation Bank, Indian Bank, Union Bank of India and LIC;

Private Entities (30%)– ICICI Bank , ICICI Lombard & IMFR and Large International Investors (40%) –

Legatum Global Development, Intel Capital and IFC-Washington (The World Bank). FINO Board of

Director’s have diverse experience from different fields and comprise of one person each form Public

Sector Bank, Private Sector Bank, International Investor, three Independent Directors and an Executive

Director. With strong local and international promoters, FINO will be able to bring comfort to its

customers that FINO has a strong financial backing and good corporate structure. FINO with such

participation is poised to become a sectoral entity serving the technology needs of the rural customer.

• Technology partners: FINO has built a platform using cutting edge technologies to provide

services and add value to its customers. FINO has meticulously worked in the selection process

and identified the right partners for this innovative project. We are already working with global

players like IBM, BGS, Austria and Cogent from USA for our hardware & systems, I-Flex for

core banking solution, Smart cards solution from Sagem, Gemalto and Oberthur. We have also





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partnered with some other vendors and technology players like NCR, VeriFone, and FSS etc. for

our new project initiatives in Mobile banking, Biometric ATM, cashless Card etc. And in future,

FINO will be working with various partners to identify emerging technologies and integrate into

FINO platform

VISION

The vision of FINO is to achieve a breakthrough in the scale, relevance, and reach of financial services for

the un-served and under served clients throughout the world.

The core business of FINO will be designing and implementing innovative technology solutions -

systems, services and networks – that will enable financial service providers to reach billions of under

served clients, providing them with a greater range of services at a lower cost.

Over the first five years of its operation, FINO intends to work with its partners to grow the micro

finance base to over 25 million customers and more than 980 million transactions per year. FINO

has initiated the journey with a large step of 1.5 Million enrollments.

FINO has diverse mix of resources having experience in relevant Technologies (Smart Cards, Biometrics,

Payment Systems etc.), Banking and Micro-Finance sector. FINO’s operation team has substantial

relevant expertise in executing field and central level operations like enrollments, transaction & data

management, device installation & maintenances etc. It follows rigorous process while putting resources

on project and ensures that adequately skilled & trained people handles the critical activities.

FINO conceives a goal of becoming a complete resource of services in the field of Financial Inclusion and

place itself as an end to end service provider for the clients.





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ORGANIZATIONAL STRUCTURE

The board of Directors of FINO is a consortium of highly skilled professionals, who have gained

expertise in their respective fields over the years. The Board of Director consists of professionals of Chief

Executive and Managing Director level from fields like Banking, Financial Services and Information

Technology. The strong association of the pivotal people in FINO with the Banking and Finance arena,

has brought FINO to competitive edge in the field of Financial Inclusion.

FINO Management

Mr. Manish Khera, Chief Executive Officer, FINO

Mr. Manish Khera is the CEO of Financial Information Network & Operations Ltd & is responsible for charting out the Company¢s growth path and sound base. Mr. Khera had 13 years of experience with

ICICI Bank. His work experience in Banking has exposed him to the entire gamut of client base from

large corporate clients to the micro clients. In his career span he has gained experience in areas of

corporate banking, government business and mass / rural banking.

Mr. Khera is an engineer with a Master's degree in Business Administration and MPhil in Environment

and Development from Cambridge University, U.K. specializing in the field of Climate Change.





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Mr. Khera's exposure to the developmental issues commences from his training in the basic aspects during

his education in Cambridge and got enhanced in his exposure as part of Government Banking Team atICICI Bank where he understood the several developmental challenges that various government

departments were trying to address through policy level and financial intervention. Mr. Khera has

exposure to Micro-Banking since year 2003 across areas ranging from business to technology.

Mr. Khera is very passionate about serving the underserved through the FINO Business Model which he

thinks would change the approach that has been adopted to serve the under-served and bring about large

penetration in customer base and operational efficiencies to the institutions focused on inclusive banking.

Email: [email protected]

Mr. Rishi Gupta, CFO & President (Sales & Marketing)

Mr. Rishi Gupta is the CFO and President - Sales and Marketing of Financial Information Network &

Operations Ltd. He is responsible for Corporate Finance, Funds raising and Investor relationships. He is

also responsible for business development and boarding new clients. Mr. Gupta has vast experience of

more than 13 years in Manufacturing, Banking and International Organizations. Prior to joining FINO,

Mr. Gupta was working with International Finance Corporation (Largest Multilateral agency in World,

The World Bank) in their Regional Office in New Delhi. He was responsible for project finance and

corporate finance function of the office.

Prior to IFC Washington, Mr. Gupta was part of the team which studied the banking operations prior tomerger between ICICI Limited and ICICI Bank Limited (Largest Private Sector Bank and 2nd Largest

Bank in India). This stint in the bank exposed him to handling an array of general banking operations for

retail customers. He has worked in the project appraisal department, which encompasses detailed

appraisal technique for project lending and short term lending of the leading Corporates of India. The

portfolio consisted companies in Finance, Consumer Durable, Textile, Sugar and Real Estate.

Prior to ICICI Limited, Mr. Gupta was working in Maruti Udyog Limited (Largest Car Manufacturer in

India) where he was heading the Budget and MIS Department, and working closely with the senior

management. Mr. Gupta also undertook special project assignment on the modernization cum expansion

programme for 0.1 million vehicles.

Mr. Gupta began his career as an Article Trainee at Price Waterhouse Coopers, wherein he gained a

stupendous exposure to accounting systems, review of internal controls and checking compliance of legal

legislation’s of the top Corporates of India.

Mr. Gupta is Chartered Accountant & Cost & Work Accountant with an all India Merit 33rd in CA Final

and 32nd in CA Intermediate. Mr. Gupta graduated in B.Com (Hons.) from Shri Ram College of

Commerce (best commerce college in India).


mailto:[email protected]





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Mr. Rajeev Arora, President (Projects & Implementation)

Mr. Rajeev Arora is the President - Projects & Implementation of Financial Information Network &

Operations Ltd. At FINO Mr. Rajeev is responsible for strategizing and overseeing the operational aspects

of FINO. He has a rich experience in operations & maintenance spanning over 14 years. Prior to joining

FINO Rajeev was associated with ICICI Bank in Corporate Banking. Prior to ICICI Bank he worked for 3

years with NTPC taking care of operations and maintenance.


FINO Workforce

FINO started with a group of 20 professionals. Now FINO has grown up to a direct workforce of 200

people by the end of two years of its operations. The company is all set to meet its growing needs by

continuing to operate under an outsourced model. It has grown to more than 1000 outsourced workforce

on the field.

The potential and competency of FINO has been developed over the time with the help of selected

professionals coming from best of the institutes in India.

FINO Offices

FINO head office is in Mumbai and 9 zonal offices in Bhubaneswar, Bangalore, Chennai, Delhi,

Hyderabad, Lucknow and Navi Mumbai, operational across India. We have a multilingual helpdesk active

at Bangalore.

SERVICE OFFERED

BUSINESS CORRESPONDENT SERVICES

(FINO FINTECH FOUNDATION)

In order to ensure wide reach along with lower transactions costs, timely MIS, information consistency to

bring more transparency in Financial Inclusion business, it is of utmost importance to create a technology

platform for unbanked customers to obtain various financial and non-financial services with efficient









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operations. To overcome the above hurdles, a new company, FINO Fintech Foundation (F^3), a Section

25 under the Indian Companies Act of 1956 has been incorporated on June 26th 2007. An independent

executive board comprising of well-known names in micro finance, financial regulation & administration,

banking and technology sectors govern F^3. F^3 has been established to carry on the activity of

promoting sustainable livelihoods for the rural poor and underserved classes by helping them becoming

economically self-reliant, through the provision of Financial, and Insurance services and technical

assistance in an integrated and sustainable manner. The activity of this Company is not for profit. F^3 is

working with the partners of FINO to establish an end to end distribution platform thereby ensuring reach

to Financial Institutions (FIs) in those geographies and amongst that section of the population which has

been considered as outreach. F^3 would achieve the above objective by partnering with organizations like

Corporate, NGO’s, standalone retail establishments, Government affiliated organizations like KVIC etc.,

Customer Service Centers established under the NREGP programme of the Department of IT. Details of

FINO Fintech Foundation are attached in the Annexure.

FINANCIAL SERVICES

FINO provides a complete range of financial services to the un-banked and under-banked populace both

in urban and rural areas. The range of offline Financial services offered to the Banks are:Savings, Loan,

Insurance Premium collection, Fixed deposit and Recurring Deposit. The range of the services is

consistently becoming more exhaustive with addition of new services like Remittances etc. the scalability

of the service

NON FINANCIAL SERVICES

Government Applications: Biometrics on card provides positive authentication opportunity to serve as

delivery channel for various government programs such as Rashtriya Swasthya Bima Yojana and National

Rural Employment Generation Scheme (NREGS).

CREDIT RATING OF AN INDIVIDUAL – FINO is in the process of designing a Scorecard with

international expert on Credit rating LiSim, a specialized consulting company, which orients its LiSim

Scoring Solutions towards institutions that are focused in homogeneous massive markets. It also has the





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objective of bringing support and effectiveness to the automation of processes of application assessment,

recovery actions and analysis of marketing.

FINO in collaboration with LiSim is working toward fulfilling following objectives:

• To develop statistical Scoring models for approval new clients applications regarding payment

behavior forecast ( Evaluation Scoring LiSim).

• To develop statistical Scoring models to improve effectiveness at the collection process with

lower use of resources.

• To develop statistical Scoring models to increase the profitability of current portfolio trough an

efficient and accurate renewal and crossed sells process.

• To develop statistical Scoring models to make stimulate institutions population to increase the

transaction volume.

TECHNICAL SOLUTION

Solution Overview

The Smart Card Solution for the Financial Inclusion project involves a Customer Enrollment System,

Card Personalization & Issuance and Central Host consisting of Card & Transaction Management

System and Point of Transaction (POT) Terminals with SAM cards for the authorized agents to carry

out financial transactions. Central Host enables data exchange with Bank’s systems over well-defined

interfaces and also provides various MIS reports required by the bank.

Each beneficiary will be provided with a Smart Card personalized as per the bank approved artwork,

which would be an ISO 7816 compliant Smart Card. The Smart Card stores securely the Members

personal details and four Fingerprint data for authentication, the financial product specific data like

Saving account balance etc., latest transactions and any other details as required by bank. The data to be

stored would be limited to the size of the memory available on the Smart card.





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The biometric based Smart Card system enables agents (BC) to verify the customers and offer the services

for the products provided by Bank at the various transaction locations located in the villages.

At the transaction locations the Point of Transaction (POT) Terminals would first authenticate the

beneficiary card by using symmetric key mechanism (3DES) and then checks the validity of the card by

comparing with the hot listed cards data stored in its memory. The Beneficiary would then be

authenticated by matching his/her fingerprint with the one stored in the Smart Card for availing the

benefit / payment offered by the scheme. The Smart card terminal would also register the details of the

beneficiary and the transaction details in its memory and the same would also be written into the

beneficiary Smart Card memory. The Smart card would thus be like a portable passbook / job card in

electronic form.

As the transaction points may be located at the remotest of village, there is a high possibility of

connectivity issue and hence the solution proposed is an offline solution. In such a case the POT terminals

at the transactions locations need not be connected to the backend server for performing the transactions.

The transaction data are securely stored in the memory of the terminal and are also backed up in the SAM.

At the end of the day the transaction data would be transferred to the Central server located at FINO via

the transaction processing and settlement switch for the purpose of reconciliation and posting the same to

CBS of the bank. The transfer of data can be done either by connecting the terminals to CDMA / IP or

through PSTN Dial up. The same mode of data transfer would be used for transferring the information

like, Transaction updates, Hot Listed Cards, Activating Products etc from the server to the POT

Terminals.

The banking products envisaged by the bank like Saving, Loan, Remittance, Insurance, Pension

distribution and other third party products as part of the Financial Inclusion initiatives of RBI can be

included and activated as and when required.

The below mentioned diagram provides the conceptual view of the FINO Solution:





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FIGURE: Overview of FINO Solution

FIGURE: Logical Architecture of Smart card system


FINO Enrollment

S stem

Infrastructure Management

Smart Card Management System

(Admin, Supervisor, Agent, Customer & SAM

Cards)

Terminal Management

Agent Management System

S e r v i c e M a n a g e m e n t ( E x t e r n a l A g e n c i e s )

K e

y M a n a g e m e n t S y s t e m

Card/ Ter. supplier

Automated Fingerprint

Identification System

C o r e B a n k i n g

S y s t e m




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System Architecture logical components

Enrollment:

The enrollment solution is a standalone Client Server application with a local database installed in the

PC / laptop. The Enrollment kit includes a Fingerprint Scanner, High resolution web camera and a

signature pad (optional) connected to the PC / laptop. The data entry operator will capture the beneficiary

data from the application form submitted by the beneficiary and the photograph & Fingerprint using the

enrollment station. Alternatively if the data is already available in softcopy the same can imported to

avoid re-entry of data during enrollment process and only missing data, photograph, fingerprints can be

captured.


PSTN

Serial Sync ISO

8583

T=0, T=1

ISO 7816 based extended

length APDU Support

T

=

0,t=

1

Transaction Acquisition SystemSWITCH

(Transaction Acquiring)

N e t w o r k

A c c e s s C o n t r o l l e r s

INTERFACE SERVER

(Host Updates management)

T

=

0,

t=

1

Third party Host /

System




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Salient Features:

• Capture the digital photograph of the beneficiary using a Web camera

• Capture the digitized signature of the beneficiary using a signature capture device

• Capture all 10 fingerprints of the beneficiary using a High resolution FP Scanner

• Capture demographic data to be maintained in the local / cardholder / central database

• MIS reports

• Day wise / Month Wise Enrollment details

• Beneficiary details

• Any other report as required by Bank

Account Opening:

Access to enrolled data is availed to the Bank officials as per the defined process. Bank officials authorize

the data for which bulk customer addition and account opening activity is carried out. Interfaces with CBS

are well defined so as to get new account opening data in seem less manner. For all the approved

customers, personalization files are generated containing required enrollment and account details.

Card Personalization & Issuance:

Personalization involves printing card holder data on the card and loading data into the chip that would

uniquely associate the beneficiary to the smart card.

We proposes that the Personalization to be done at a central location (FINO personalisation center) using

high end personalization printers to support mass card personalization and distribution. An automated

interface will reduce the potential for manual errors. Security is also a factor to be considered, as the

secure transmission of data is critical, particularly since the automated interfaces will be used to transport

card personalization data from card management system. The personalization processes include

combination of the following:

• Loading basic demographic information, fingerprint, account and keys on the chip

• Printing card graphics

• Printing a photo and signature image on the card

• Printing demographic data on the card





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The process of distributing personalized cards to cardholders is called card issuance. As a security

measure, the issuance agency shall compare biometric that is stored in the card with the beneficiary

biometrics using the POT terminal and is activated before the card is handed over to the beneficiary. The

issuance information is stored in the terminal memory and then transferred to the central server for

activating the beneficiary.

Central Host:

The central host consists of various sub-systems and is primarily used for the Customer & Transaction

Data acquisition, processing, storage & management.

Card management System

Key functionality of card management system comprises of system processes related to management of

whole life cycle of smart card issued within the system. Currently FINO Smart Card Management system

supports following card life cycle functionalities:

• Card Issuance

• Card Replacement

•Card Reissue

• Card hot-listing

Following types of cards will be issued within the system. Client provides the authorization for issuance

of these cards:

- Agent Card – To be issued to Customer service agents / operators of the BC

- End customer card – to be issued to end Customers of the Bank

- SAM card for POT Devices – stores the system keys and end Customer transactions

The card management system will cater all such card replacement requirement. A new card is issued to

the Customer and card updated with the latest data. The data is obtained from the Customer account

profile which is stored in the Central host / Back end system.

Following types of cards will be issued within the system. Client provides the authorization for issuance

of these cards:

- Agent Card – To be issued to Customer service agents / operators of the BC





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- End customer card – to be issued to end Customers of the Bank

- SAM card for POT Devices – stores the system keys and end Customer transactions

The card management system will cater all such card replacement requirement. A new card is issued to

the Customer and card updated with the latest data. The data is obtained from the Customer account

profile which is stored in the Central host / Back end system.

Terminal Management System

Terminal Device management is currently a CRM application that enables POT device installation, de-

installation and replacement at various sites (stationary and mobile). Terminal Devices are traced using

the Terminal Device ID and MFI/BC parameters.

Agent Management System

Agent Management System is used for generating & managing Agent Codes, Terminal IDs, MFI /

Merchant Codes. Apart from this, it also processes the PTLF files generated from switching systems so as

to provide Transaction Files for the transactions settled by terminals deployed in field.

Automatic Fingerprint Identification System (AFIS) (Bio-Deduplication)

AFIS is primarily used for de-duping of customers based on their fingerprints. All 10 fingerprints of anewly enrolled customer are compared against the existing database of already enrolled customers.

Suspects thrown by this system are sent for manual verification based on other demographic parameters.

FIGURE: Transaction Acquisition system components


Transaction Acquisition System




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The transaction acquisition system comprises of two core components:

1. Interface server which is part of ASP set up within the transaction Acquisition system and handles

core system functionality of managing remote back end updates sent to Point of Transaction

Devices deployed in the field.

There are three types of backend updates which can be pushed to terminals

• Financial (New account opening / Financial Transactions (Dr/Cr) / A/c blocking – Dr

freeze – Cr freeze / Update in acc level parameters like change in sanctioned amount of

loan etc.)

• Administrative (Change in customer level information like change in address / mapping

code etc.)

• Hotlist

2. Switch which is responsible for transaction aggregation from field Devices and routing of back end updates coming from back end HOSTs (CBS and third party) to field Authentication Devices.

Customer & Transaction Data Management


Switch Centre ManagementNetwork

TransactionRouting

Terminal Profile Set upTerminal

Initialization &

configuration

Product /

Transaction setconfiguration

Interface Server

Agent

Registration

Module

Terminal

Registration

Module

Product / sub

product

Registration

Card /

Terminal

Upload




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It is the central repository of Customer data with corresponding Accounts & Transaction details. It has

well-defined interfaces with various external systems. Data from Enrolment Stations get imported to this

system and sent for Card Management System for personalizing & issuing cards. It also exchanges data

with Transaction Acquisition System and carry out required processing / massaging before exchanging

the same with Core Banking System. At present, system has interfaces defined for Flexcube, Finacle &

BANCs for posting account & transactions data with corresponding bank’s CBS.

TECHNOLOGICAL DEVELOPMENTS

FINO’s efforts towards technology development in Financial Inclusion are ceaseless. FINO is working

with various experts across the world to develop technological supports like Contact less cards, Money

Deposit Machines (MDM), Mobile based systems, PC based systems. In the coming future, FINO is ready

with resources to develop itself according to the Industry requirements and technological advancements.

One of the technological research and development is going on in the field of Mobile Transaction terminal

development. Brief description is attached in Annexure 3.

Micro Deposit Machine (MDM): MDM has been designed in partnership with NCR (National Cash

Register) to target the urban unbanked populace. The proof of concept (PoC) was conducted from 8th Oct

to 2nd Nov 07 for around 500 customers of HCCS (Hindustan Cooperative Credit Society) at Jarimari and

Thunga Gaon, Mumbai. TISS (Tata Institute of Social Science) did the survey to understand usability of

MDM by the end customer. According to the report published by TISS, the response was very positive.

The machine shall be piloted by Oct 2008 before final roll out.





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ONGOING PROJECTS-PAN INDIA

SrNo

Name of theClient Mandate State Product/Service

1 Union Bank of India >5 Lakhs

Maharasthra/ UP/NewDelhi/Chandigarh/MP/AP

Savings/ NREGA/LOAN

2 Sewa Bank < 5 Lakhs Gujarat

CBS

Implementation(Iflex)

3 Indian Bank <5LakhsMaharasthra/TamilNadu/West Bengal

Savings

4Punjab NationalBank >5 Lakhs

Rajasthan/Chandigarh/HP Savings

5 Bank of Baroda <5lakhs Rajasthan/UP Savings

6Oriental Bank of Commerce <5lakhs Punjab Savings

7 Corporation bank <5LakhsGoa/TamilNadu/Karnataka Savings/NREGA

8 ICICI Bank >5 LakhsOrissa/ AP/Bihar/WB/Tamil Nadu Loan

9 United Bank of India <5 Lakhs West Bengal Savings

10 ICICI Lombard >5 Lakhs Rajasthan,Haryana Health Insurance

11 ICICI Prudential <5 Lakhs Andhra Pradesh Life Insurance

12 LIC <5 Lakhs Himachal PradeshLife Insurance(Groupinsurance)





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ANNEXURE 1

FINO FINTECH Foundation

FINO FINTECH Foundation (F^3) is a Section 25 under the Indian Companies Act of

1956 has been incorporated in June 26th 2007.

F^3 has been established to carry on the activity of promoting sustainable livelihoods

for the rural poor and underserved classes by helping them becoming economically

self-reliant, through the provision of Financial, and Insurance services and technical

assistance in an integrated and sustainable manner. The activity of this Company isnot for profit.

F^3 is working with the partners of FINO to establish an end to end distribution

platform thereby ensuring reach to Banks in those geographies and amongst that

section of the population which has been considered as outreach.

F^3 would achieve the above objective by partnering with organizations like

Corporate, NGO’s, standalone retail establishments, Government affiliated

organizations like KVIC etc., Customer Service Centers established under the NeGP

programme of the Department of IT. This list is only indicative and shall be enhanced

under the guidance of FINO and its partners.

Role of FINO FINTECH Foundation:

• Creation of Distribution framework

• Establish a distribution network either through its partners or its own across thecountry

• Use the network for customer solicitation for Banks

• Ensure proper branding and collaterals is displayed

• Ensure a pool of resources who would work in tandem to Banks to elucidatecustomers of the nuances of product and services offering of Banks

• Managing a training, and audit calendar with the Banks to ensure that theentire distribution network works in alignment with the overall mandates givenby the Banks

• Ensure that the Banks have a touch point with end customer in the geographiclocation of choice





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• Creation of an Operation framework

• Leverage the distribution network established to enable customer solicitation

• Leverage the distribution network to enable transactions for withdrawal anddeposits for the customers of Banks

• Leverage the distribution network for cash management for Banks

Method of operation:

Identification of the locations where Banks would wish to commence the BC/BFactivity

Identification of the various components of the activity which encompasses the role of a BC

Identification of joint and individual responsibilities between F^3, Banks

Identification of locations to commence the initial dry runs

Mapping of the locations of the desired BC locations to the Bank locations

Training, audit, and reporting formats

Identification common personnel between F^3 and Banks for escalations and otheroperational requirements

Initiation of the dry run and benchmarking the performance

Why F^3??

• A Pan India reach through its closely monitored and nurtured distributionnetwork

• A choice of locations and distribution options to choose from

• A single point access to the entire distribution network, thereby ensuring that

the Banks are able to ramp up quickly and focus on its core business

• A delivery point whose processes and technologies are open to audit

• Training and setting up the technology infrastructure for the BC with regards tothe technology and the services offering being offered by the Bank

• Ensure a monthly visit to all the 50 BC locations





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• Ensure availability of complete branding as per Bank requirements

• Be a first level of escalation for all the BC points to address issues

• Ensure that BC comply with all the reporting requirements mandated by Banks

• Be a single point interface between the Banks and the BC network

• Identify training requirements and escalate the same to FINO and Banks

• Ensure that all issues related to cash management and reconciliation betweenlocal branches of Banks and the BC locations is handled as a first escalationand also a redressal point

•Ensure that all necessary technology infrastructure, and the logistics support ismade available to the BC points to facilitate the transactions

• Ensure that the BC locations are suitably equipped through a process of training on a continuous basis to manage first level of technology, customereducation and service issues

• Ready F^3 points for Bank to tap:

• Presently F^3 is working with multiple partners in different states. Please findbelow the existing network of FINO FINTECH Foundation:







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- Application controls

Management controls:

Well defined process is in place in our Information security policy for the system. The customer data is

accessible to authorized person only with proper authentication mechanism. PWC has completed an

independent audit of the system (FINO components) for Union Bank of India. Our Transaction

acquisition system & related components are ISO 9001:2000 certified by Bureau Veritas Certification and

currently undergoing PCI DSS Compliance.

Infrastructure control- Transaction Acquisition System

Logically the network are segregated into three security zones

- External Zone - This zone consists of PGS network connected to internet cloud.

- DMZ / Server Farm Zone -This zone consists of Web Server with cold standby Web server in

place.

- Internal Zone - This zone consists of Database servers and application servers only accessing the

Web servers which is located at DMZ

Established Firewall standards

o A formal process for approving and testing all external network changes to the firewall

configuration

o Documented list of services/ports necessary for business

o Justification and documentation for any available protocols besides HTTP and SSL, SSH, and

VPN

o Periodic review of firewall rule sets

o Build a firewall configuration that denies all traffic from “un-trusted” network/hosts, except for

Web Protocols- HTTP(Port 80) and Secure Sockets Layer (SSL port 443)

o System Administration protocols( E.gs, Secure Shell (SSH) or Virtual Private Network 9VPN)

o Restricting inbound internet traffic to IP address within the DMZ( Ingress filters)

o Restricting inbound and outbound Internet traffic to Ports 80 and 443





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All components are loaded and hosted separately. Our Transaction Acquisition solution has the

industry standard high end firewall namely Juniper Network NetScreen-408 Advanced Model

Firewall Appliance in active-active mode addressing the high availability. Net Screen delivers ICSA

certified state full inspection firewall security and the highest level of data security (3DES IPSec/AAS

encryption support).The Net Screen firewall compliances with the below Security certifications

• Common Criteria: EAL4 and EAL4+

• FIPS 140-2: Level 2

• ICSA Firewall and VPN

The Firewall appliance has restricted administrative network access level

• Firewall for enable the traffic to permit or deny based on access control deployment on the

firewall.

• Detecting and protecting the network from attacks

The infrastructure for the FINO owned components is protected via. Fortigate 100A

• The Terminal equipment as well as other workstations do not keep any secret information.

• Application components of the server software and workstations have complex access control

system aimed for preventing:

Un-authorized Access of applications

Direct connection and usage of Database

External controls:

Routers/Switches deployed at our transaction acquisition centers are configured and security hardened to

prevent the following general threats:

o Unauthorized access,

o Session hijacking,

o Rerouting,

o Masquerading,





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o Denial of service (DoS)

o Eavesdropping

o Information theft

The ISS Proventia IPS is configured to alert the following:

o Stateful Traffic Inspection

o IP Defragmentation and TCP Stream Reassembly, Detailed Protocol Analysis, Asymmetric

Traffic Monitoring, Protocol Normalization, Advanced Evasion Protection, Forensic Data

Collection, Protocol Tunneling, Protocol Discovery, Signature Detection User-Defined

Signatures, Realtime Signature Updates, Anomaly Detection Statistical Anomaly, Protocol

Anomaly, Application Anomaly, DoS Detection Threshold-Based Detection, Intrusion Prevention

Stop Attacks in Progress in Real Time

o Drop Attack Packets/Sessions, Initiate TCP Reset, ICMP Unreachable, Packet Logging,

Encrypted Attack Protection Stops Encrypted Attacks in Real Time, Granular Security Policy

Enforcement, High Availability Stateful Failover

Centralized Syslog server continuously monitor for alerts received from Firewall and IDS system.

Suspected incident are currently attended to as per the PCI standards.

Application control:

Standard user name and password are used for authentication. Actions like data upload, download,

update / modification etc. are being logged and reviewed periodically by authorized operations team.

Database control

In the Transaction Acquiring and Processing system the SQL Server is configured to Monitor the specific

probe constantly monitoring the internal performance and space allocation throughout the SQL Server

database and feeds essential information based on pre-defined criteria to the Availability Manager for

appropriate alert notification. An extensive range of pre-defined alerts are configured in SQL Server

Monitoring Probe. Monitoring of SQL Servers address the following log monitoring:

• Server uptime

• Size of database

• Buffer cache-hit ratio





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• Log-file cache-hit ratio

• Free log-file space

• Number of databases, active users, logged-in users, deadlocks per second etc.

• Database reads

• Database writes

• flush waits

• latch waits

• Full scans

• Transaction log growth

• Transaction log shrinking

System Components

Enrollment Station

Self contained mobile unit containing the below mentioned items to capture beneficiaries demographic

details, digital images of photograph & fingerprints.

• Laptop

• Web Camera

• Fingerprint Scanner

• Signature Pad

• Customized S/w application to capture details as desired by Bank

Smart Cards

Contact microprocessor Smart Cards conforming to ISO 7816 standards with the following

specification are being provided with:

• EEPROM of 64 KB with Java OS

• Protocol: T=0 & T=1

• 4/4 color offset/silk-screen printing with Unique Registration Number (URN) printed

using dye sublimation/laser process

• Applications on Smart Card.





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The smart card will has 15 different pockets which can be used to enable the same no. of

different products onto the card. Last 10 transactions for each product are stored on the card.

Few applications are mentioned below:

• Savings Account

• Loan

• NREGS

• SSPS

• Pension disbursement

• Wage disbursement

• Insurance

Other applications as required by SLBC can also be loaded on the card through backend

application updates

Hand Held Terminals

EFT Sagem Bio930M

The offline smart card terminals consist of the following features:

• 32-bit RISC ARM9 (200 MHz) microprocessor

• Built in security coprocessor

• Memory 32 Mb Flash + 8 Mb SDRAM [Optional : Extended SDCard Memory]

• EMV Smart card Reader

• Thermal printer SAM (Security Access Module) reader-2

• Swipe card reader: Track I, II

• Optical Biometric Module

Acquisition Time < 1 sec

Recording < 256 bits

• NiMh batteries: averages 200 transactions per charge.

•Terminal Software.





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The terminals application is a user-friendly menu-driven interface and can be used for all

transactions with a user and is also used to authenticate the Smart Card holder using biometrics

(fingerprint). Basic functionalities:

• Recording all transactions

• Fingerprint 1-1 matching software

• Transfer agent for upload of data to PC/server

• Key matching software, using SAMs, to authenticate Smart Cards

• Batch download from PC/server to terminal

• Transactions for Savings, Insurance, recurring deposit, loan, fixed

deposit and remittance applications

• New applications that may be desired can be incorporated and loaded to

the terminals deployed on the field.

Network Access Controller

NAC services across the country using which terminals dials a local no. instead of STD to connect to the

FINO central server for transfer of data. Local availability of NAC services ensures low operating costs to

the last mile agent.

Central Switch

FINO uses ACI’s Base24 Financial Switch as its transaction acquisition & switching system which is one

of the widely use Financial Transaction Switch by banks in India and across the world. Data from the

terminal are uploaded into the switch through the NAC. At the switch, the transactions are segregated

based on the transaction type and host. The central switch also enables two way data exchange between

the offline terminals and the backend client hosts.

Personalization Bureau

The smart card would be personalized at FINO personalization bureau or any 3rd party personalisation

bureau. Data required for personalization would be generated by the Central card management system and

provide to the personalization bureau. FINO uses state of the art high speed dye sublimation printers for

personalization of both chip & fascia of smart cards in a single pass with a daily capacity of 5000 cards

per day with a capacity to scale up if when required





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Disaster Recovery & Business Continuity Plan

- For the purpose of Disaster recovery and business continuity the Primary switch system

(Transaction Acquisition System and related components) is connected to a DR Switch system

over redundant Leased lines using TCP/IP. The DR System will take over the functions as a

backup system in the event of the Primary system failure.

- Periodic DR drills are carried out so as to ensure that plan is executed properly in case of any

contingencies

- Business Continuity Plan for primarily identified cases like Card Failure, Device Failure, Loss of

Transactions, Absence of Agents etc has been mentioned as under:

- Card failure

o In case of card failure, customer may be allowed to do a transaction in the bank branch if

it is so desired by the Bank

o Call for the same should be logged at FINO help-desk so that the same card can be

blocked and a new card can be re-issued with latest account balance

o It’s a business call by the bank whether agent should be allowed to conduct a transaction

in such cases manually (controlled by process). If it is so then the same can be carried out

as per the arrangement with BC and Bank and accordingly such transactions should be

entered manually in the system based on transaction vouchers submitted by Agent

- Device Failure

o All the transactions performed in field are stored in POS memory as well as on SAM

card. In case where POS memory crashes, transaction can be recovered from SAM

o If SAM is also not available then process of Manual Batch Posting is to be followed

where in based on copy of charge slips kept with agents, transaction entries are done

manually by the authorized person of MFI

o As mentioned above, it is the business call of the Bank whether manual transactions

should be allowed or not in case where device is not working

- Loss of Transactions

o In case where transaction has been conducted on customer card but before it is settled

with server, the data is lost (including charge-slips) then the same can be brought into

notice by difference in Card account balance and Host account balance. Based on that,

account balance re-conciliation can be carried out for that specific batch of transactions





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- Absence of BC-Agent

o Transactions can be carried out with any agent of the appointed BC. So if one agent is not

available then customer can avail his services through other agents

o Transactions across BCs are also allowed in a system though the same is controlled by the

parameter. So in case of Liability products (like Saving a/c) where all BCs share the GL

account with the same Bank then inter-BC transactions also can be allowed

- Business Continuity plan in case of Termination

a. Customer-entity shall be entitled to intervene and take such appropriate measures likeappoint another person to provide the Services or the possibility of bringing the outsourced

activity back in-house in the event the performance of the Services by FINO are interrupted

for any reasons whatsoever. FINO shall adhere to fair practice in performance of the

Services.

b. On termination of service, all the customer data/information residing/available with FINO

in FINO’s database/severs/records/technology platform(s) shall be migrated/ transferred

to the customer-entity’s designated servers/technology platform(s) to the satisfaction of

customer

c. FINO will develop and establish a robust framework for documenting, maintaining and

testing business continuity and recovery procedures. FINO will periodically test such

business continuity and recovery plan. Customer-entity shall be entitled to conduct joint

testing and recovery exercise with FINO





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ANNEXURE 3

Mobile – Transaction Terminal

This option will make Mobile phone to act as a Transaction Terminal like POS. It will

allow customers to carry out transactions with Cards (contact / contactless) in offline

mode. The necessary peripherals will be attached with the mobile over serial / blue

tooth interface.

Components:

- Hardware : Mobile phone (NFC for contactless cards), Bluetooth enabled Bio-

Scanner, Printer (& Smart Card Reader for contact cards)





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- Software : Windows Mobile / J2ME platform

- Communication: GPRS / CDMA

Process:

1) Customer comes with a card* (contactless) for a Transaction. NFC phone

establishes the trust with the card using SAM residing in a secure element of

the phone memory

2) Customer’s fingerprint stored on the card gets verified with the help of BT

enabled scanner

3) Agent enters the transaction details on screen which again gets verified by the

customer and after successful verification, card details are updated,

transaction is stored on Mobile phone & the receipt gets generated on BT

enabled printer

4) Periodically data gets uploaded from phone to server

*Note:Contact readers could be attached to Mobile over USB / BT interface so as to

enable transactions with Contact Cards.

Mobile – Transaction Terminal for Collection:

- This can be used by agents specifically to collect loan repayments / deposits

etc in card-less environment

- It will pull demand information from server and accordingly transactions will be

carried out in field and the same will synched with server at day end / when

connectivity is available

CONTACT DETAILS

Sl.

No.

ITEM DETAILS

1 Name of Company Financial Information Network

and Operations Ltd.2 Postal Address C-401, Business Square,





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Andheri - Kurla Road, Andheri

(E), Mumbai-4000933 Telephone/Mobile and Fax Number (022) 40973466,Fax-022-

409733004 Contact Persons Details

a) Rishi Gupta

CFO & President (Sales &

Marketing)

[email protected]

(9870346661)

b) Tarun Agarwal

Vice President ( Business

Development)

[email protected]

(9870606007)

c) Annuradha Phougat

Asst. Vice President( Business

Development)

[email protected]

(9870606002)

d) Bidisha Sengupta

Asst. Manager ( Business

Development)

bidisha.sengupta@ FINO.co.in

(9870988751)













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Documents

FINO Business Proposal