Welcome Project Directors Presentation on SMART CARD Commissioner, Rural Development Date

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

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 25 th 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 1 st 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. –DharmasagarS.B.I –GeesukondaAndhra Bank –Station Ghanpur A.P.G.V.B –Raghunathpally Axis Bank –HanumakondaUnion Bank of India –RaiparthyS.B.H. Started in 5 villages on April 30 th with pension payment. Pension payment under taken in all 6 mandals in the month of July 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 1 st July with pension payment. Pension payment has taken in two mandals from August,07 Wages under NREGS paid in the entire Thimmapuram mandal on 13 th Aug After the pilot, the bank model will be adopted.

Technology (M/s Fino) … Image Template Code Receipt Generation Slot Slot to capture thumb print Slot to insert Operator / Customer card Arrow Key for starting the device F 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 Warangal Karimnag ar Total Total no. of villages covered Beneficiaries covered 17,3358,69326,028 Payments madeRs Rs.24.34Rs (in lakhs)

Comparison - before and after pilot Saving of Rs lakhs per annum after commencement of disbursement through Smart Card Expected savings of Rs 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

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 Box Hardware C.S.P Payments

Roadmap Upscaling to 6 districtsBy Positioning of Business correspondents By Selection of CSPs to Enrolment of beneficiaries to Training to CSPs and BCs to Issue of smart card to Issue of last card Disbursement