1. © Copyright IBM Corporation 2007 GANASEVA: BRANCHLESS REMOTE BANKING MULTI-SERVICE DELIVERY MODEL FOR REACHING THE RURAL PEOPLE By Dr S S Satchidananda Ph.D., Head, Risk Solutions and Research Financial Services Sector IBM India, Bangalore

2. © Copyright IBM Corporation 2007 OUTLINE  Integrated Approach for Rural Services Delivery  Establishing DIGITAL Rural Information Infrastructure  Banking & Services Delivery Model

3. © Copyright IBM Corporation 2007 Current Scenario  Plethora of rural technology initiatives  Concerns: - Well intentioned attempts with un-established relevance - Incomplete / Partial solutions - Insufficient BPR and mere “ mechanization ” s - ICT as an embellishment- peripheral / PR exercise - Increase in Access difficulties,Transaction cost, - Taking Technology to People rather than taking service to the people.

4. © Copyright IBM Corporation 2007 BENEFITS OF AN INTEGRATED APPROACH ACCESS +COST- TIME_CHOICE+ QUALITY+GROWTH / POVERTY ALLEVIATION+

5. © Copyright IBM Corporation 2007 IRCS DRIVERS  New Wealth generation thru new investment, trade and commerce enabled by ICT  Commercial gains thru market enlargement and growth  Economic integration of the Rural and the Urban areas & overall welfare improvements  Development as business

6. © Copyright IBM Corporation 2007 INTEGRATED SOLUTION ARCHITECTURE Investment Career guidance Infrastructure Matrimonial Astrology Trade Health Counseling Education Banking

7. © Copyright IBM Corporation 2007 INTEGRATED FRAME WORK  Banking service delivery as the core function  Utility service provision as second layer  Other services as outer layer: governance information, education, health  Entrepreneur- based operations: - Private initiatives or PPP initiatives - Immense potential for innovation

8. © Copyright IBM Corporation 2007 TECHNOLOGY ELEMENTS  Online Transaction Processing Electronic platform  Utility services Applications  Information services Applications  Applications for other services

9. © Copyright IBM Corporation 2007 WHY BANKING SERVICES AS THE CORE?  Need for money for carrying on livelihoods  Need for increasing capital formation in rural areas  Need for Banks to broadbase their portfolio  Payment system infrastructure  Supply leading role of banking in development.

10. © Copyright IBM Corporation 2007 MULTIPLE DEPLOYMENT STRATEGIES  Computerization of operations of existing entities  Use of Technology- enabled, appropriate delivery channels: - Cyber Kiosks - ATMs - Mobile ATMs - Smart cards - Broad bands

11. © Copyright IBM Corporation 2007 MAJOR TASKS  Ensuring Financial viability  Long term sustainability  Solution development with provision for flexibility / adaptability for local needs environment and infrastructure.  Consensual & functional approach: Innovation, Commitment & Effective leadership.  Long term strategy rather than PR or Quick fix approach.

12. © Copyright IBM Corporation 2007 all-purpose ecommerce technology platform and channel stewardship Kick starting the value chain of ebanking and ecommerce  Thru Information Services & “ Service Intelligence ”  Thru enabling transactions between & among the banks & other service providers and all the unbanked people and the banked people  Thru collection management of bank receivables  Thru enabling the payment and other services on the same platform  Thru enabling the proactive delivery of banking & other services at the doorsteps of the rural people using appropriate non-branch channels (mobile service systems, kiosks, cell phones, broadband etc., )

13. © Copyright IBM Corporation 2007 BENEFITS OF REMOTE RURAL SERVICE DELIVERY SYSTEM  Greater & faster access to high quality banking & other services  Lower transaction costs thru sharing (non-duplication + outsourcing +automation+BPM)  Lower investment cost for ecommerce  Empowerment of the rural people thru access & choice  Improvement in productivity & growth of unbanked  Comprehensive & cost effective method for delivery of banking and other services

14. © Copyright IBM Corporation 2004 Rural Information Infrastructure for Banking and other Services Dr. S.S. Satchidananda, Ph.D. Head, Risk Solutions & Research, FSS, IBM India, Bangalore

15. © Copyright IBM Corporation 2007 NEED  Collecting comprehensive data about the social and economic aspects of the 700 million rural people at the level of individuals in a self-validating and ready – to-use form  Updating the data on an ongoing basis  Managing and processing this data and for making it available to the various users

16. © Copyright IBM Corporation 2007 CURRENT AND POTENTIAL USERS  Commercial banks,cooperative institutions and other rural financing agencies  Governmental authorities from village  Planning & Development Agencies  Private businesses  International agencies

17. © Copyright IBM Corporation 2007 SOLUTION MODEL  Use of ICT for building and operating this information infrastructure involving collection, storage updation,consolidation and processing of the data and making customised offering  Entreprenurial model with provision for assurance review by public authorities or users or both  Pay for use business model

18. © Copyright IBM Corporation 2007 TECHNOLOGY  PDA with Specially made Applications for Data (Voice, Picture and Data)capture,verification and validation and updation  Data Center with Technologies for storage, processing and management  Smart clients at the user-ends  Threeway CDMA connectivity

19. © Copyright IBM Corporation 2007 PILOT PROJECT  Project : GANASEVA RCDS  Location: IDAGUNJI  Coverage: All adults in Select Five backward villages in Interior Karnataka  User partners: Rural Financing Agencies, Syndicate Bank, SBI, PACS, Government forums

20. © Copyright IBM Corporation 2007 DELIVERIES  Model for Rural Information Infrastructure covering data content identification and methodolgy for validation and updating  Model for credit rating of rural individuals  ICT model for implementing the Rural Information Infrastructure  Successful demonstration of the technological feasibility  User-proofing of the Implemented Model for making loans, etc.,

21. © Copyright IBM Corporation 2007 “ GANASEVA ” TECHNOLOGY- ENABLED RURAL SERVICES SOLUTION  INTEGRATED BUSINESS SOLUTION USING TECHNOLOGIES FOR DELIVERY OF RURAL SERVICES RESEARCHED AND ARCHITECTED  SOLUTION TESTED AT HONAVAR, KARNATAKA, INDIA  FEATURES: - OPERATIONALISING OF DIGITAL RURAL INFORMATION INFRASTRUCTURE & ELECTRONIC PLATFORM FOR SHARED DELIVERY OF SERVICES - REDUCTION IN TRANSACTION COSTS & DELIVERY TIME - IMPROVEMENT IN QUALITY OF SERVICES - INCREASING AVAILABILITY AND CHOICE OF SERVICES TO 700 MILLION RURAL PEOPLE

22. © Copyright IBM Corporation 2004 Rural Individual Information Data Collector IMDS I n c e n t i v e s Easier Access Lower Prices Increases Choice I n c e n t i v e s Job & Profits I n c e n t i v e s Profits & Growth I n c e n t i v e s Cost Savings Better Identification of Targets Better Profits Faster growth Effective delivery of services National RII Data Grid Banks/PACS Governments NGOs Credit Rating Agencies Other Service Providers Village Knowledge Centers

23. © Copyright IBM Corporation 2004 IMDS Entrepreneur MSDS Entrepreneur Facilitator Entrepreneur END User Bank1 Bank2 Bank3 Bankn Connectivity Providers Entrepreneur I n c e n t i v e s Home Delivery Availability Choice of Bank Choice of Products Growth I n c e n t i v e s Profits Business Growth I n c e n t i v e s Cost savings Business Growth Choice of business Choice of Clientele Better Quality Assets

24. © Copyright IBM Corporation 2007 SUGGESTION!  Establishing Digital Rural Information Infrastructure (DRII) for every village in India as the basis for governance, development & commerce using GANASEVA model  Issuing Smart Identity Card to every citizen based on the DRII which can be used by the person for all purposes requiring authentication  Initial application of the DRII for the providing banking ( account opening, loaning and cash at doorstep services through the coop banks & PACS using the ready-to-use solution of the GANASEVA model  Data Centre for DRII may be established using available infrastructures e.g. BSNL Exchanges / at NIC   Project can be taken up by the Private companies/ Government / on PPP model

25. © Copyright IBM Corporation 2007 THANK YOU

26. © Copyright IBM Corporation 2004 GANASEVA- An ICT Solution for Rural Services Delivery Dr. S.S. Satchidananda, Ph.D. Head, Risk Solutions & Research, FSS, IBM India, Bangalore

27. © Copyright IBM Corporation 2007 Outline  Opportunity: Serving Rural India thru ICT  Problem: Inadequacies and Inefficiencies in the Delivery of financial services in rural areas  GANASEVA  Elements of the new Model  Major Tasks  Opportunities & Benefits

28. © Copyright IBM Corporation 2007 Current Scenario  Huge credit gaps, High transaction cost, Delays  Systemic Issues - Data Inadequacy/unavailability - Knowledge Gap about Rural People and Economy - Documentation difficulties - Bureaucratic delays - Lack of Accountability - High transaction costs - Access cost

29. © Copyright IBM Corporation 2007 Elements of the Model  Imaginative use of ICT services (shared information and delivery infrastructure)  Entrepreneur-based Operations (Outsourcing data collection and unbundling credit processes)  Human interface (local faciltator)  Secure, un-intimidating human-aided interface (software support)  Pro-active Delivery of Services (analytics)

30. © Copyright IBM Corporation 2007 End User Benefits  Better (faster, easier) and larger credit delivery to Rural India  Reduction in “ Digital Divide ”  Business for Banks and IT Companies  Greater rural productivity & income

31. © Copyright IBM Corporation 2007 MOBILE RURAL BANKING SYSTEM  IMDS  MSDS  BANKS/ NON BANKS/ SUPPLIERS  CDMA NETWORK

32. © Copyright IBM Corporation 2007

34. MSDS INTERFACE

35. © Copyright IBM Corporation 2007 UNIQUE FEATURES  OUTSOURCING MODEL  ONLINE TRANSACTIONS  LEVERAGING TECHNOLOGY FOR VALUE CREATION  ENTERPRISE MODEL  NEW INSTITUTIONS LIKE RURAL CREDIT RATING  LOCAL LANGUAGE INTERFACE  VOICE SUPPORT FOR TRANSACTIONS

36. © Copyright IBM Corporation 2007 Summary  ICT for Rural India – an alternative solution  Common Information Infrastructure & shared delivery system  Reduction in transaction costs & delivery time  Improvement in Quality of Services  Increasing availability of services

37. © Copyright IBM Corporation 2007 THANKS!!! THANK YOU FOR YOUR TIME AND PATIENCE !