Welcome Project Directors

Presentation on

SMART CARD

Commissioner, Rural DevelopmentDate19.09.2007

Outline of the presentation

• Concept

• Phase – I districts

• Stakeholders

• Process

• Roles & Responsibilities

• Pilot districts

• Highlights of the pilot

• Roadmap

Concept.

• Disbursement through smart card is a branch

less banking model – major step towards

financial inclusion.

• Enabling the establishment of a last mile

banking business correspondent network at

each village.

• Provides mainstream banking and financial

services to the poorest of the poor.Continued..

Concept• Disbursement of Social Security Pensions and NREGS

wages through Smart Card technology.

• Chip based smart card as identity card for disbursement.

• Biometric (finger print based) proof of identity

arrangement.

• Disbursement through a GP level Business

correspondent to beneficiaries.

• Payment within 4 days of release of amount to bank /

financial institution.

Contd..

Phase – I districts

• Warangal

• Karimnagar

• Medak

• Mahaboobnagar

• Chittoor

• East Godavari

Stakeholders

IDRBT

RBI

Banking Institutions

Rural Development

NREGS Wage Seekers &

Pensions

Key- process

1. Enrolment

– Department gives list of beneficiaries – SSP & NREGS

– Concerned bank / Financial institution conducts an

enrolment camp in the village.

– GPs, VOs assist the organisation in identification of

beneficiaries.

– 6/ 10 finger prints, photo and other details of the

beneficiary captured.

– An account will be opened.

Contd..

Key- process

2. Preparation and issue Smart Card.

– Data collected during enrolment is encrypted on the

card including biometric. (Encrypted Java smart card

with 32 KB memory).

– Card is delivered to the beneficiary in the village within

three weeks.

Contd..

Key- process

3. Business Correspondent & Customer Service Provider

(CSP)

– Bank / FI appoints a business correspondent.

– To deliver service at GP level.

– BC correspondent appoints CSP at the village level.

– Training to BC/CSP.

– Required hardware like Finger print reader, printer,

mobile phone etc., are positioned in the village.

Key- process

4. Payment

– Government issues instructions to the Banks / FI

authorising payment.

• List of beneficiaries and authorised amount will

be given.

– Individual account of beneficiary is credited.

– Cash is physically transported and delivered in the

village to BC / CSP.

Key- process

5. Disbursement– BC /CSP sits at pre-designated government premises

usually GP building etc. – Beneficiary approaches with card.– Card is inserted in the card reader and identity of

beneficiary is established.– Based on the a/c balance of the beneficiary as displayed

on the screen, cash is paid.– A receipt is generated in duplicate.– A manual acquittance also maintained.– In case of exigencies, manual payment is made.

Key-process

6. Data uploading

– CSP / BC uploads data of disbursements daily.

– MIS report an progress of disbursement is submitted to

Government.

Roles and responsibilities

Role of Rural Development

– Policy decisions will be taken by the

department.

– Put in place appropriate systems and

procedures for transfer of payments.

Roles and responsibilities

Role of Banks / FINO

– MoU with Government.

– Conduct enrolment camps at village level.

– Open SB account and issue Smart Card to beneficiaries.

– Appoint, train and enter into contract with BCs.

– Credit pensions / wages to the account of the beneficiaries

and disbursement at village level.

– Maintaining centralized database.

– Provide all required MIS from time to time.

Role of District Collector:

– Formation of District Implementation Committee.

– Oversee the entire implementation process.

– Conduct review meetings every Monday for a period of

3 months, then have monthly meetings.

– Identify bottlenecks and inform to the State Level

Steering Committee.

Roles and responsibilities

Roles and responsibilities

Role of DRDAs

– Supporting enrolment of beneficiaries

– Provide information about approved beneficiaries.

– Identification and orientation of VOs as Business

Correspondent (BCs) and CSPs.

Contd..

– Provide copies of Pension payment orders by 25th of

every month.

– Transfer pension amount to the bank a/c

– Ensuring smooth disbursement of pensions

– Consolidating MIS reports and forwarding to Head

office.

– 2% service charges of the value of pension benefits

disbursed in the district.

– Monitoring and periodical review.

Contd..

Roles and responsibilities

Role of DWMAs.

– Arrange 2% service charges to the Banks for wages

disbursed..

– Ensuring smooth payment of wages.

– Consolidating MIS reports and forwarding to Head

office.

– Conducting regular review meeting with the MPDOs.

Roles and responsibilities

Role of MPDOs.

– Shall make necessary action arrangements for

enrolment process.

– Shall send electronic copy and hard copy of Wage

payment orders to the Banks.

– Transfer funds to the bank A/c

– Ensuring smooth disbursement of SSP and payment of

wages.

Roles and responsibilities

Role of Village Organization (VO)

– VO is identified as a Customer Service Provider.

– VO shall identify a literate SHG member who will take-up

operations on behalf of VO.

– the VO shall over see the process of Identification,

enrolment and disbursement.

– Shall extend the support for smooth implementation.

Roles and responsibilities

Role of Business Correspondent (BC)

– Shall be responsible for money evacuation.

– Appoint and enter into MoU with CSP.

– Provide training and handholding to CSPs.

– Ensure smooth disbursement of SSP and Payment of

NREGS wages.

Roles and responsibilities

Role of Customer Service Provider (CSP)

– Shall operate the terminals.

– Shall disburse the pensions from 1st of every month.

– Shall make payment of NREGS wages once in a week.

– Shall upload information on a daily basis.

Pilot districts - Warangal• (6) Mandals in Warangal district with banks.

– Dharmasagar S.B.I

– Geesukonda Andhra Bank

– Station Ghanpur A.P.G.V.B

– Raghunathpally Axis Bank

– Hanumakonda Union Bank of India

– Raiparthy S.B.H.

• Started in 5 villages on April 30th with pension payment. • Pension payment under taken in all 6 mandals in the month of

July 2007.• An agency named Little World is providing technical support

and an agency named Zero Mass is providing logistic support to the banks

Pilot districts - Karimnagar.• (2) mandals in Karimnagar district with a private agency M/s

Financial Information Network and Operations Ltd., (FINO)

– Thimmapur

– Sirsilla

• Started in 5 GPs on 1st July with pension payment.

• Pension payment has taken in two mandals from August,07

• Wages under NREGS paid in the entire Thimmapuram

mandal on 13th Aug. 2007.

• After the pilot, the bank model will be adopted.

Technology (M/s Fino)

11001000…

Image

TemplateCode

Receipt Generation Slot

Receipt Generation Slot

Slot to capture thumb print

Slot to capture thumb print

Slot to insert Operator / Customer card

Slot to insert Operator / Customer card

Arrow Key for starting the device

Arrow Key for starting the device

F buttonF button

Technology (M/s Little World )• Based on new generation Near Field Communications (NFC)

mobile phones; contact-less RFID smart cards and integrated biometrics.

• Alternate option of attaching fingerprint scanner + card reader to a PC or PoS.

Can also be deployed on PCs - by adding a NFC card reader + fingerprint scanner (both USB peripherals costing about Rs. 6000)

Highlights of the pilot

WarangalKarimnagar

Total

Total no. of villages covered

150 52 202

Beneficiaries covered

17,335 8,693 26,028

Payments made Rs. 124.16 Rs.24.34 Rs.148.50(in lakhs)(in lakhs) (in lakhs)

Comparison - before and after pilotPHYSICAL

Undisbursed pensions 112

1284

April (Before Smart Card)

July (After Smart Card)

FINANCIAL Un disbursed amount

Rs. 22400

Rs. 256800

April (Before Smart Card)

July (After Smart Card)

Saving of Rs.11.38 lakhs per annum after commencement of disbursement through Smart Card

Expected savings of Rs.18.93 crores per year if up scaled for entire state

Un disbursed pensions – breakup

• Never turned up for enrollment - 474 (most likely bogus cases)• Enrolled but did not turn up - 810 (may or may not come back).

• Total - 1284

Work flow

Govt.

• RD. Dept.• DRDA• DWMA• MPDOs

MIS Report

• MoU• Benf. List• Transfer of Funds• Services Charges

Bank

Business Correspondent• Appointment of CSP• Enrolment - Card Issue• Training to CSP• Cash Delivery• Data Upload

Cash BoxHardware

C.S.P

Payments

Roadmap

Upscaling to 6 districts By 01.01.2008

Positioning of Business correspondents

By 15.10.2007

Selection of CSPs 18.10.07 to 28.10.07

- Enrolment of beneficiaries 22.10.07 to 24.11.07

- Training to CSPs and BCs 30.10.07 to 10.11.07

- Issue of smart card 06.11.07 to 07.12.07

- Issue of last card 15.12.07

- Disbursement 01.01.08