1. EBT Model of Post Offices - Challenges & Outcomes in Operating at Scale Sandhya Rani. K Postmaster General (Busi.Devpt.& Technology) Hyderabad, Andhra Pradesh Enhancing Delivery of Govt. to People Payments in Rural Areas Intnl. Workshop New Delhi, 29.11.12

2. Plan of Presentation Post Office EBT Model in Andhra Pradesh – Factors leading to the Initiative – Coverage – Implementation Arrangements – Technology solution – Achievements & Outcomes Lessons & Challenges Policy Implications & Areas for Action

3. Factors leading to PO-EBT Model  External  AP Govt. ICT Model for MGNREGS implementation  eFMS fund flow to last payee & ensure real time MIS  Integration w/State Govt. smart card project  Internal  Over 13 million Wage Accounts manually handled!!  To avoid delay in payments  To avoid fraudulent payments  To ensure real time MIS  To address competition from Banks!

4. PO – EBT Model – Implementation Arrangements Tripartite Agreement in GoAP, DOP and AP Online Online fund flow Post Office Savings Bank Account Local SHG women as Postal Franchisee/CSP in GPs without PO Robust Monitoring & Alerts System

5. Post Office EBT Model - Coverage MGNREGS Wage Payments No. of Gram Panchayats: 5125 No. of Districts: 9 (5 underway) No. of Post Offices: 3613 No. of Wage seekers: 4.02 ml. Wage amts. disbursed: Rs.8588 ml. Social Security Pensions No. of Districts: 2 No. of Post Offices: 1196 No. of Pensioners: 1.2 ml. Amount disbursed: Rs.2173 ml. Technology: POTD front end, offline transactions and day end Sync with Server Central Server and application support Real Time MIS on Portal - http://appost.aponline.gov.in http://appost.aponline.gov.in

6. 1. Generation of Pay Order at MCC 2. Uploading of generated Pay Order to NREGS Server 3. Authorisation of FTO by CRD 4. Confirmation of remittance by the Bank 5. Pushing the Pay Order to AP Online Server (pulled date) 6. Approval of Pay Order by the Head Postmaster after receipt of FTO 7. Crediting wage amounts to individual SB accounts 8. Downloading Deposit data to the POTDs 9. Supply of Cash 10. Payment of Wages & Upload data Cycle of Wage Payments

7. Electronic Benefit Transfer- Disbursement of MGNREGS Wages APOnline Data Centre 3 5 6 BO (MCC) NREGS State Data Centre 1 2 MCC 7 3 SO 4 6 HO 7 3 Muster Roll 6

8. Wage Disbursement – Day Wise Activities APOnline Data Centre BO (MCC/DCC) NREGS State Data Centre MGNREGS Central Fund Account SOHO FTO to Bank Fore Transfer Fund Transfer through Bank Entry of Musters & Measurements Day 1/2 Day 2 Day 2/3 Day 2 Day 1 Day 2 Day 3/4 Post Office Wage Payments System Each Day

9. Portal - appost.aponline.gov.in appost.aponline.gov.in

10. District YearMonth Total No. Transactio ns % Paid In 1 TO 4 Days 5 TO 7 Days 8 TO 14 Days >14 Days Nizamabad 2010May1.27 ml20.3118.2526.9534.48 Nalgonda 2012June1.29 ml27.6917.1923.9331.18 Delay Analysis (Peak Month) (From Pay Order Fetched Date To Paid Date)

11. Achievements & Outcomes 100% authenticated payment, no manual payment 100% - Real time MIS Wage disbursement: < 7 days (40 - 45%); 7- 14 days (55 - 60 %) Pension Payment, much appreciated by Pensioners Biometric failures – 0.1% Delay Payments – different reasons – Wage seekers desire to save & not w/d wages immediately – Delay in issue of Wage Slip – Delay Cash supply – POTDs failures – Inadequate monitoring

12. Lessons & Challenges Lessons – Tripartite arrangement works better – Demonstrated the power of rural postal network – Transaction without Smart Card – Security of biometrics? – Need to strengthen Cash Supply Systems Technology related – Repeat enrolments – absence of interoperable data systems – Integration of Post Office with eFMS – Need for fast tracking R-ICT Project of Dept. of Posts Operational Issues – Dedicated Project Mangers & Capacity Building – Limited working hours of Branch Postmaster – Mechanizing & Monitoring Cash Supply Lines

13. Leveraging the PO Network Item of workCoverageVolumes Existing PO SBAll India No.of SB Accounts:265 ml. > Available in > 150,000 POs MGNREGS wage Payments All India No. of Accounts: 58 mil Amt disbursed: > Rs.300,000 mil > 97,972 POs Govt. Benefit Transfer – Pensions * Kerala, T.N., Karnataka, Rajasthan, H.P. Gujarat, >5.3 mil Pensions MOs/ month Amt paid – 125 crs Commission earned – Rs.70 mil > 1.3 ml SB accounts too Indiramma Housing Scheme A.P. No. of SB Accounts: 0.63 mil Amt disbursed: Rs. 9600 mil 14, 683 POs Untapped! Direct Cash Transfer SHGs, W & CD payments, Tribal Welfare, Informal Sector Workers SSS

14. Policy Implications & Areas for Action 1. Financial Inclusion & other departments related – POSB as an instrument for Financial Inclusion – Restrictive definition of ‘no frill account’! – Integration with Aadhar Authentication System – Reengineer CGA business processes relating to PO A/ctg Sy 2. Strategy & Approach – DOP – Put in place Inter – operable system w/Aadhar link – Strengthen ‘last mile connectivity’. – Ensure robust real time MIS & monitoring systems – Fast Tracking Rural – ICT Project

15. Policy Implications & Areas for Action 3. Human Resource & Establishment Review – Orientation and capacity building at different levels – Strengthening P.O Franchisee/CSP Model: Thinking beyond Branch Office Network – Simple & easily implementable incentive system – Performance based remuneration for GDS BPMs – Simplifying establishment review system of ED BOs 4. Changing POSB Business Processes: – Inline with Biometric based authenticated payments – Stop duplication of data processing

16. Policy Implications & Areas for Action 5. Financing Post Offices – Change conservative authorized cash balances practices – Bring in mandated mechanized cash supply systems – Liberalize norms & simplify process for opening Direct Bank A/cts for large no. of S.Os with local Banks – Strengthen infrastructure in local rural bank branches 6. Accounting & Reconciliation – Integrating with EFMS/CFMS of State Government partners – Online fund flow to Postmasters’ Accounts – CGA to increase the no. of Accredited Banks for PO transactions in each Circle (allow all Nationalised Banks) – Devise process for Integration into CGA reporting system to enable PAOs pairing and reconciling Online credits

17. 17