Financial Inclusion
Andhra Bank’s Experience
Challenges!
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Enrollment of large numbers
Wide geographic spread
High maintenance costs for accounts
Small ticket size of transaction
Illiteracy and use of vernacular
Product & service pricing
Trust and acceptance
Lack of electricity
Poor telecommunications
Financial Inclusion through Smartcard
Bank’s role in AP
• Schemes covered so far
• Social Security Pensions (SSPs)
• Wages under NREG Scheme
• SHG Linkage (Pilot)
• Geographic scope
– Indentified mandals in
• Warangal, Karimnagar, Medak, Mahaboobnagar,
Chittoor, East Godavari
– One- district-one-bank
• Srikakulam and Guntur
Our Technology Partners
• A Little World Pvt Ltd
– Pilot project in Geesukonda Mandal
– Warangal district
• Access Development Services (BC)
& Atyati Technologies
– Districts of East Godavari, Srikakulam, Karimnagar,
Mahaboobnagar, Medak, Chittoor, Guntur
• Fino Ltd.
– SHG Linkage – Pilot - in East Godavari
Pilot Project – AP Govt - 2007
• Andhra Bank was allotted 25 villages in
Geesukonda Mandal (Warangal district).
• Government has extended financial assistance
– of Rs. 90/- per card
– Rs.10,000 per hand held device
– Service charges of 2% of the volume of cash
disbursed.
ALW –Solution
• One-Time Costs
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Cost of Smart Cards Per Card
Enrollment Fees Per Card
Cost of Photo Personalization Per Card
Cost of Terminals- Per Terminal
Cost of Cashboxes One time
• Operating Costs
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Technology Operation fee Per Card
Transaction Fee Amt Disbursed
Cash Management Charges Amt Disbursed
Monthly fee per CSP Per Month
Mobile (connectivity) expenses
Salient aspects of our RFP
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Proven Technology
Scalable and interoperable system
Contact or Contactless smartcards
Fingerprint image acquisition as per RBI norms
End-to-end Solution (technology and banking
services)
The merits of the approach
• The entire solution outsourced
– to a single Systems Integrator
– result in better efficiencies and effectiveness.
• Bank need not procure any hardware or software
• Bank need not procure any other resources
– Pay for the Vendor’s resources on usage basis.
• Integration of Banking and financial services
– Provided by the same vendor
– Payment for services based on gross value of customer transactions.
• Avoidance of risks from
– obsolescence of Technology and
– change of Methodology if any, will be handled by the Vendor.
Architecture suggested by Govt. of AP
FRONTEND SYSTEMS
CONNECTIVITY
BACKEND SYSTEMS
Biometric
scanner
ISO 19794
Smart
Card
Smart
Card
Reader
GSM/GPRS/PSTN/
LEASED LINE/ INTERNET
POS
Terminal
Backend
Banking
Server
Financial
Switch
Printer
ISO 7816-4 /
ISO 14443-4
ISO 8583
Technical Specifications - RFP
• Smartcard
– ISO 14443 / ISO 7816
– EMV Compliant
– 32 K EEPROM memory
– Standard dimension PVC / Polycarbonate Card
– DES/3DES (key length 1024/2048)
– Hold User Certificates, Smartcard OS, Applications,
etc
Technical Specification - RFP
• Handheld devices
– Integrated system or 2/3 components
– ISO 14443 / ISO 7816 and ISO 18092 for read and write
operations
– Built-in PKI support
– EMV Compliant
– Multilingual support
– Online & Offline capability
– Secured storage and communication
– Long hours of battery support
Technical Specifications - RFP
• Fingerprint Scanner
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Image acquisition at setting level 31 of ISO/IEC 19794-4
Contact area 1 x 1 sq.inch
Min. capture-size 13mm wide x 17 mm high
Pixel density 500 ppi with + 5 ppi
Pixel depth 8 bits
200 grey levels (dynamic range of scanned image)
Sense live-scan plain finger impression
Strong anti-spoofing features
Protection from ambient light, residual images
Standard for Data-Interchange - ANSI-378
Encrypt fingerprint minutiae with 3 DES
Scanner surface to be resistant to dust, humidity, shocks, electronic discharge,
ambient light, extreme temperatures, etc
32 KB
32 KB
64 KB
Contact
Contactless
Contact
ISO 7816
ISO 14443
ISO 7816
PSTN,
GPRS, WiFi
GPRS
PSTN
CDMA
Front-end system Multilingual support
Available
Available
Voice Prompt on Front-end system
Not
Available
Backend Interface with Middle-tier tried
and
tested
in
their
prior
engagements
De-duplication of Biometric
Indication of the timelines for the solution
to go live.
BIDDER-7
Yes
Communication between Front-end and
Middle-tier
BIDDER-6
BIDDER-3
Yes
Smartcard
BIDDER-5
BIDDER-2
Yes
End-to-End proven experience
BIDDER-4
BIDDER-1
Responses to RFP
Yes
No
Yes
No
32 KB
64 KB
32 KB
Contactless
Contact
Contact
ISO 14443
ISO 7816
ISO 7816
GPRS
PSTN
PSTN,
CDMA
GPRS, GSM,
CDMA
Will be
available
Available
Not Available
Available
Not
Demonstrated
Not
Available
Not
Available
Available
Not Available
Not
Available
Not
Demonstrated
Yes
Yes
No
Yes
No
No
Not yet tried in
a bank
AFIS
Propreitory
AFIS
Not
factored
AFIS
AFIS
Not factored
2 months
1 month
2 months
1 month
2 months
2 months
6 months
No Card
Outsourcing Terms
Payment to Vendor
• Enrollment,
• Card Personalization
• Delivery of the Card to Customer
• Card Management services
fixed price per-card basis
• Technology & Management
•Facility Management
Commission as a
percentage of gross
amounts received / paid
to Beneficiaries
Part of deliverables by
vendor at no extra cost.
• Banking and financial services
• Financial Literacy
• Capacity building of BC
Progress in coverage
• Beneficiaries covered so far in AP
– Warangal District (pilot) 14,000
– East Godavari District (enrolled) 150,000
– Srikakulam District 20,000