Welcome Presentation on SMART CARD Government of Andhra Pradesh.

Welcome

Presentation on

SMART CARDGovernment of Andhra Pradesh

Objectives

To increase the outreach of main- stream banking and

financial services to the poorest of the poor by using

technology based solutions.

Ensure efficient and timely transfer of Govt. benefits to

the poor.

Minimize the possibility of fraudulent payments.

Total Financial Inclusion.

Approach

Create branchless banking infrastructure.

Open zero-frills accounts & issue Smart Cards to the poor.

Establish a banking out post in each village.

To begin with NREGS and SSP payments .

Banks will subsequently deliver banking services.

AP model- bank led

Banks lay the entire infrastructure through Service Providers and BC selected through competitive bidding.

Service providers provide technology.

– PoS equipment , biometric reader , Printer, cards, backend servers etc.

Business Correspondent delivers financial services to people through a village level CSPs

All CSPs are women and members of SHGs

Stationary Payment system in every GP

Govt pays 2% commission on payments handled.

Technology Aspects

• Back end network– central servers of service providers integrated to bank servers

• Front end– Finger print scanner and reader– Hand held equipment provided with a printer which handles

enrolments and payments– Mobile phone with camera

(OR)– PoS terminal which integrates all the above functions.

• Mx Smart Card– 32 KB and with java Card application called “data store”.

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A.P. SMART CARD PROJECT

Technology (M/s Fino)

11001000…

Image

TemplateCode

Slot to insert Operator / Customer card

Slot to insert Operator / Customer card

F buttonF button

Receipt Generation Slot

Receipt Generation Slot

Slot to capture thumb print

Slot to capture thumb print

Arrow Key for starting the device

Arrow Key for starting the device

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A.P. SMART CARD PROJECT

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)

Awareness

Orientation to APDs, MPDOs,APOs & TAs by

PD,DWMA

Orientation to IKP staff

by PD, DRDA

Orientation to FAs at

Mandal level

Orientation to VOs at

Mandal level

Awareness prog for the non-

officialsat Mandal level

Awareness prog for the non-

officialsat Mandal level

Key- processes

1. Enrolment

– RD gives beneficiaries data of SSP & NREGS database

– Concerned bank conducts enrolment camp in the village

through SP.

– GPs, VOs assist the organisation in mobilization and

identification of beneficiaries.

– 6/ 10 finger prints, photo and nominee details of the

beneficiary captured.

– Data will be forwarded to back office for processing

Contd..

Enrollment- work flow

Key- processes

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).

– Account is opened

– Card is delivered to the beneficiary in the village

within three weeks.

Issue of Cards- work flow

Key- processes

3. Business Correspondent(BC) & Customer Service

Provider (CSP)

– BC of the bank appoints CSP at village level.

– Training to CSP is given by bank and BC.

– Required hardware like Finger print reader, printer,

mobile phone etc., are positioned in the village.

Key- processes

4. Payment

– Govt. issues instructions to the banks authorizing

payment.

• List of beneficiaries and authorized amount will

be handed over to bank

– Bank credits the Individual account of beneficiary

– Cash is physically transported by the BC on behalf

of bank and delivered at the door steps of CSP.

Key- processes

5. Disbursement– CSP sits at a 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 through biomatric authentication.

– a/c balance of the beneficiary is 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-processes

6. Data uploading

– CSP uploads data of disbursements daily, bank

data base is updated.

– MIS report on progress of disbursement is

submitted to Government by bank.

Smart card – interface work flow

Beneficiary A/cs updated

B.C. Delivers cash to CSP

CSP pays & uploads data

S.P. & Bank servers updated

Musters entry

A/c No. data

Govt.

A/c Data is updated in MCC

e-payorder & Check

MIS to Govt.

Enrolment in Village

A/c opened and cards personalized

Bank & S.P.

Pilot districts - Warangal

(6) Mandals in Warangal district.

– Dharmasagar S.B.I

– Geesukonda Andhra Bank

– Station Ghanpur A.P.G.V.B

– Raghunathpally Axis Bank

– Hanumakonda Union Bank of India

– Raiparthy S.B.H.

Started in 5 villages on April 30th 2006 with pension payment. Pension payment under taken in all 6 mandals 7/06 Service provider- ALW & Zero Mass, for all banks

Pilot district - Karimnagar.

(2) mandals in Karimnagar district with -FINO

– Thimmapur

– Sirsilla

Started in 5 GPs on 1/7/06 with pension payment.

Wages under NREGS paid in the entire Thimmapuram mandal

on 13th Aug. 2007.

After the pilot, the bank model was adopted.

Pilot - progress

No. of GPs covered : 199

No. of benfs, enrolled : 1.37 Lakhs

No. of cards issued : 1.12 Lakhs

Amount paid : Rs. 53.34Cr

Pilot continued for 1 year for stabilization

Upscaling ( service area model) Phase -I

Upscaled to 6 districts in Aug. 2007.

Service area approach adopted.

20 banks out of 27 agreed to implement, but only 10

banks started work.

Service Area Model

S.No. Bank District No. of Districts

1 State Bank of India

Warangal, Karimnagar,

Medak, Mahabubnagar,

Chittoor, East Godavari

6

2 Union Bank of India

3 Corporation Bank

4 Axis Bank

5 Deccan Gameen Bank

6 A.P.G.V.B.

7 ING Vysya Bank

8 Andhra Bank

9 Punjab National Bank

10State Bank of

Hyderabad

Progress at a glance - Phase-I

Villages where enrolment started : 3636

Beneficiaries enrolled : 23.19 Lakhs

Beneficiaries issued cards : 20.79 Lakhs

Amount disbursed to the beneficiaries :Rs.273.17

Crs.

Limitations in service area approach

Project is being implemented in isolated pockets

because a bank branch has few villages in its SA.

Service areas of a bank are small and widely dispersed.

MPDO had to deal with several banks.

Operations became cumbersome.

This model could not saturate sizable area and failed to

enthuse the stakeholders.

Upscaling (One bank – one dist. Model) – Phase -II

Govt. of AP explored new models.

Based on such recommendations of a technical

committee recommendations, RBI approved “One

Bank – One District model”

Banks started showing considerable interest in this

model.

One Bank – One District Model

S.No. Bank DistrictNo. of

Districts

1 State Bank of IndiaVizianagaram, Kadapa &

Nalgonda3

2 Union Bank of IndiaVisakhapatnam, West Godavari & Prakasam

3

3 Andhra Bank Srikakulam & Guntur 2

4 Axis Bank Krishna & Ranga Reddy 2

5 Syndicate Bank Ananthapur & Kurnool 2

6 A.P.G.V.B. Khammam 1

7 State Bank of Hyderabad Nellore 1

Total 14

Progress at a glance - phase-II

Villages where enrolment started : 6902

Beneficiaries enrolled : 32.07 Lakhs

Beneficiaries issued cards : 21.67 Lakhs

Amount disbursed to the beneficiaries :Rs.193.55

Crs.

Overall progress at a glance

No. of GPs where project is under way. : 10,737

No. of benfs, enrolled : 56.65 lakhs

No. of cards issued : 42.46 Lakhs

Amount paid : Rs. 466.73Crs

Emerging models

1. One bank – one mandal – pilot – in 8 mandals (Aug-06)

• 6 banks participated• 199 Panchayats covered• 1.12 lakhs cards issued• Rs.53.34 Crs amount disbursed to the beneficiaries

2. Service Area approach – in 6 districts (Aug-07)

• 10 Banks are participating• 3,636 G.Ps work started• 20.79 lakh cards issued• Rs 273.17 Crs. amount disbursed to the beneficiaries

3. One bank – One district model – in 14 districts (Sep-08)

• 7 banks are participating• In 14 districts work has started• 21.67 lakh cards issued• Rs 193.55 Crs amount disbursed to the beneficiaries

Important developments

RBI announced an incentive policy of Rs.50/- for each account opened ( effective from 01.07.2008 )

• 6 banks accessed Rs 1.81cr sofar

GOI established Financial Inclusion Fund (FIF) and Financial Inclusion Technology fund (FITF) with 500 crores.

• APGVB is the first bank to access Rs.20.00 crores from FIF.

RBI set up a state level steering committee with CS as

chairman

Critical learning from the project

1. Detailed implementation arrangements: At state level, district & Sub-district level

Should involve Govt., Banks & Service providers

Involvement of Regional Office of RBI

A dedicated team at every level is critical

*Bank & Service Provider position a point person at district level

2. Enrolment: Better to start block by block, saturate and move on

Arrangements for prior intimation identification of beneficiaries

After completion of main phase. Separate arrangements for handling left over enrolments.

For Coordination

Critical learning from the project

3. Issue of Cards: Delay in opening accounts

Delay in activation of cards

Delay in handing over cards to beneficiaries

*Activated cards ready for operation should be delivered in 2-3 weeks after enrolment

4. CSPs : Identification, Training and Positioning - delays

Regular over sight

Periodical training, inspection

*Possible problems of politicization

Contd..

Critical learning from the project

5. Payments:

On-line MIS and 100% biometric based electronic payments are very critical

Advisable to keep a pass book with beneficiary

6. Change management:

Orientation to Govt. Officials, Banks staff and Public representatives

– On concept and procedure

– Helps raising awareness, removing apprehension and problem solving

– Training Branch managers and Bank Staff is critical

Contd..

Critical learning from the project

7. Long – Term issues

De- duplication of data

Laying uniform technology standards

Inter –operability across varies service providers

Delivering Banking services

Contd..

Enrolment Kit

Enrolment – photo graph

Enrolment – Capturing finger prints

Disbursement of Cards

Disbursement of Cards

Handing over cash to CSP

CSPs about to make payment

Payment –finger print checking

Payment –finger print checking

Payment –finger print checking

Payment –Receipt printing