Promoting Financial Inclusion - United Nations Development ...

The concerned government department
communicates the list of social security
benefits to ensure that all intended
beneficiaries in a specific locality are
brought under inclusive banking. The BC
gets data about the NREGA beneficiaries
from National Informatics Centre (NIC).
The BC then organizes enrolment camps
at village level and collects information
of the ‘would be account holders’ as also
their biometric identification. After due
diligence of ‘no-frills accounts’ (NFA),
banks open the accounts in their books. The
government decides the fee for delivery
(2%) and mandates that it must go through
a bank, which takes a cut (0.25%). Every
account holder is issued a smart card, which
contains the basic data of the account
holder along with the biometric data and
photograph.
The BCs have hand held devices which
facilitates connecting to bank’s database and
carry out cash-in and cash-out function on
behalf of the bank. A day or two before the
due date of payment, government gives an
invoice to the bank along with the details
of the beneficiaries. The bank credits the
accounts of the beneficiaries enabling the
BC to access the account balance through
a mobile access device and disburse cash
at gram panchayat level. The Bank/BC
receives advance payment of the services
that it provides in respect of G2P from the
government department.
G2P payments of FINO are in operation
with the tie up of state governments of
Andhra Pradesh (AP), Haryana, Gujarat,
Chhattisgarh, Jharkhand, Karnataka,
Maharashtra, Madhya Pradesh (MP) and
Uttar Pradesh (UP). The highest numbers
of FINO bandhus, about 3,000 of them
are in AP, which accounts for the highest
number of beneficiaries for G2P payments.
• Banking Services: NFA accounts, Deposits,
P2P payments/Remittance
FINO works as a TSP to banks in providing
technology solutions for remote banking.
This could be both back end and front end.
The relationship with banks can be in two
ways:
a. As a TSP to banks and this technology is
then provided to a BC.
b. FINO as a TSP and FFF as a BC.
BOX C.6: Scale achieved by FINO
(Oct 2010)
Total customers served 22 million
FINO network of bandhus 10,000
No. of villages touched 50,000
Gram panchayats covered 5,884
Districts 278
States 22
Partner banks 22
Insurance companies 4
Government entities 10
Banks invite requests for proposals
from various TSP for branchless banking.
FINO can then be chosen as a technology
partner for the bank. In addition FINO’s
sister concern FFF can act as a BC using the
technology provided by FINO. The bandhus
are recruited by FFF as commission agents
of banks. On an average a bandhu is able to
earn `750-3,500 per month.
The most common banking service
provided by FINO is opening of NFA.
NFA has a simple one page application
form with requirement of a simplified
KYC document of residence proof. A
new account can be opened by the bandhu
immediately after receiving the completed
application form and the smart card can be
issued to the customer on the spot. FINO’s
communication with its bandhus is in the
form of an SMS-driven web-based tracking
system called Samvaad. As soon as a bandhu
touches bases with a customer, she sends a
samvaad (SMS) to the block coordinator –
this samvaad is linked to the central server
and his activity is daily updated.
Enrolment of new NFA accounts is
also outsourced by FINO to registered
56 PROMOTING FINANCIAL INCLUSION