Welcome Chief Secretary to Govt.
Presentation on
SMART CARD PILOT
Department of Rural DevelopmentDate18.08.2007
Outline Of The Presentation
Concept Stake holders Roles & Responsibilities Process Pilot districts Highlights of the pilot Present status Strengths Costing Scope of Business Roadmap Challenges
Concept.
Disbursement of Social Security Pensions and NREGS
wages through Smart Card technology.
Chip based smart card as identity card for disbursement.
Biometric (finger print based) proof of identity
arrangement.
Disbursement through a GP level Business correspondent
to beneficiaries.
Payment within 4 days of release of amount to bank /
financial institution. Continue
Concept.
It is a branch less banking model – major step
towards financial inclusion.
Enabling the establishment of a last mile
banking business correspondent network at
each village.
Provides mainstream banking and financial
services to the poorest of the poor.
Continued..
Stakeholders
IDRBT
RBI
Banking Institutions
Rural Development
NREGS Wage Seekers &
Pensions
Roles and responsibilities
Role of Rural Development
Provide information about approved beneficiaries.
Put in place appropriate systems and procedures
for transfer of payments.
In Warangal district, bear the cost of the smart
card and hand-held / point of sale devises.
2% service charges of the value of the benefits
disbursed in Warangal and Karimnagar districts.
Roles and responsibilities
Role of Banks / FINO MoU with Government. Open SB a/c accounts and issue Smart Card to
beneficiaries. Appoint, train and enter into contract with CSPs. Credit pensions / wages to the account of the
beneficiaries. Provide all required MIS from time to time.
Roles and responsibilities
Role of DRDAs / DWMAs
Supporting enrollment of beneficiaries.
Identification and orientation of VOs as Customer
Service Providers (CSP).
Provide copies of Wage / Pension payment orders.
Monitoring and periodical review.
Key-process
1. Enrollment Department gives list of beneficiaries – SSP &
NREGS
Concerned bank / Financial institution conducts an
enrolment camp in the village.
GPs, VOs assist the organisation in identification of
beneficiaries.
6/ 10 finger prints, photo and other details of the
beneficiary captured.
An account will be opened.
Contd..
Key-process
2. Preparation and issue Smart Card.
Data collected during enrollment is encrypted on
the card including biometric. (Encrypted Java
smart card with 32 KB memory).
Card is delivered to the beneficiary in the village
within three weeks.
Contd..
Key-process
3. Business Correspondent & Customer Service Provider (CSP) Bank / FI appoints a business correspondent. To deliver service at GP level. BC correspondent appoints CSP at the village level. Training to BC/CSP. Require hardware like Finger print reader, printer,
mobile phone etc., is positioned in the village.
Key-process
4. Payment
Government issue instructions to the Banks / FI
authorising payment.
List of beneficiaries and authorise amount will be given.
Individual account of beneficiary is credited.
Cash is physically transported and delivered in the
village to BC / CSP.
Key-process
5. Disbursement BC /CSP sits at pre-designated at government premises
usually GP building etc., Beneficiary approaches with card. Card is inserted in the card reader and identity of
beneficiary is established. Based on the a/c balance of the beneficiary as 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-process
6. Data uploading CSP / BC uploads data of disbursements daily. MIS report an progress of disbursement is
submitted to Government.
Pilot districts - Warangal
(6) Mandals in Warangal district with banks. Dharmasagar S.B.I Geesukonda Andhra Bank Station Ghanpur A.P.G.V.B Raghunathpally U.T.I Hanumakonda Union Bank of India Raiparthy S.B.H.
Started in 5 villages on April 30th with pension payment. Pension payment under taken in all 6 mandals in the month of
July 2007. An agency named Little World is providing technical support
and an agency named Zero Mass is providing logistic support to the banks
Pilot districts - Karimnagar.
(2) mandals in Karimnagar district with a private agency M/s Financial Information Network and Operations Ltd., (FINO) Thimmapur Sirsilla
Started in 5 GPs on 1st July with pension payment. Wages under NREGS paid in the entire
Thimmapuram mandal on 13th Aug. 2007. After the pilot, the bank model will be adopted.
Highlights of the pilot
Warangal
Karimnagar
Total
Total no. of villages covered
150 22 172
Beneficiaries covered 31,098 8,285 39,383
Payments made
Present status – warangal.
Mandal Bank Total Enrollcards issued
Disb, throu
gh card
card issued disb.
Manually
through
manual disb.
Total
disb.
Amount disb.
Paying since
Dharmasagar SBIPensions 4002 3850 3624 3064 450 173 3687 737400 May
NREGS 5788 4196 0 0 0 0 0 0
Raghunathapally UTIPensions 2452 2311 2181 1907 241 90 2238 447600 May
NREGS 10446 2823 0 0 0 0 0 0
Station GhanapurAPGVB
Pensions 3829 3512 3292 3159 118 192 3469 693800 June
NREGS 12121 2338 0 0 0 0 0 0
Gheeskonda ABPensions 2698 2504 2419 2324 26 225 2575 515000 June
NREGS 5662 0 0 0 0 0 0 0
Hanumakonda UBIPensions 2621 2458 2314 2028 277 185 2490 498000 May
NREGS 3030 2756 0 0 0 0 0 0
Raiparthy SBHPensions 3027 2842 2682 2655 26 205 2886 577200 June
NREGS 6173 0 0 0 0 0 0 0
Total Pensions 18629 17477 16512 15137 1138 1070 17345 3469000
NREGS 43220 12113 0 0 0 0 0
Present status – Karimnagar
by M/s FINO, Ltd., in 2 mandals
Mandal TotalEnrolled
cards issue
d
Disb. through card
card issued disb.
manually
through
manually
Total
disb.
Amount disb.
Paying since
Thimmapur Pensions 1739 1500 242 1 54 297 59400July in 5 GPs
NREGS 10163 1587 182 0 376 558 230000 Aug 13th
Sirsilla Pensions 2363 2031
NREGS 13919 1478
Strengths
Un disbursed pensions
112
1284
April (Before Smart Card)
July (After Smart Card)
Undisbursed amount
Rs. 22400
Rs. 256800
April (Before Smart Card)
July (After Smart Card)
Saving of Rs.1.89 lakhs after commencement of disbursement through Smart Card
Expected savings of Rs.158.00 lakhs per month if up scaled for entire state
Un disbursed pensions – breakup
• Never turned up for enrollment - 474 (most likely bogus cases)• Enrolled but (did not turn up) - 810 may or may not come back.
• Total 1284
Costing - pilot
One time investment (In lakhs)
District Beneficiaries (no)
Card Cost @ Rs.90/- & Rs.60/-
Terminals @ Rs.10000/-
Total
Warangal 31,098 27.98 15.40 43.38
Karimnagar 8,285 4.97 - 4.97
TOTAL 39,383 32.95 15.40 48.35
Recurring (In lakhs)
District Beneficiaries (no)
2% Service charge
Warangal 31,098 18.88
Karimnagar 8,285 5.31
TOTAL 39,383 24.19
Costing - Up scaling in two districts
One time investment
DistrictBeneficiari
es (no)
Card Cost @ Rs.90/-
Terminals @
Rs.10000/-
Total (in lakhs)
Warangal 6,40,000 576.00 101.00 677.00
Karimnagar
5,11,821 460.64 119.00 579.64
TOTAL 66,51,821 1036.64 220.00 1256.64Recurring cost (In lakhs)
District Beneficiaries (no)
2% Service charge
Warangal 6,40,000 436.00
Karimnagar 5,11,821 351.93
TOTAL 66,51,821 787.93
Costing – up scaling to entire state (annual)
One time investment
(In lakhs)
Beneficiaries (no)Card Cost @ Rs.90/-
Terminals @
Rs.10000/-Total
94.832,791 8467.44 218.90 8686.34
Recurring cost (In lakhs)
Beneficiaries (no)2% Service
charge
94.832,791 6114.23
Scope of Business
Pensions likely to touch 50 lakhs. Amount to be disbursed Rs.12,000.00 crores
NREGS wages seekers 60 lakhs.
Amount to be disbursed Rs.24,000.00 crores Total SHGs in the state 6.99 lakhs. Number of members of SHGs 87.37 lakhs. SHGs transactions Rs.10,000.00 crores. Crop loans Rs.17,300.00 crores. Housing loans Rs.4,115.00 crores. Total business in Rural areas Rs.67,000.00
crores
Roadmap
Pilot in 8 mandals in two districts By September 15th 2007
Entire Warangal & Karimnagar districts
By December, 2007
Entire State
- expand to 4 districtsBy December, 2007
- expand to 4 districts By June,2008
- expand to 4 districtsBy December, 2008
- expand to 4 districts By June,2009
- expand to 4 districtsBy December, 2009
- expand to 2 districts By March, 2010
Challenges
Up scaling to the entire state. Budget.
Autonomous certification agency – technology
etc., Availability of vendors.
Cost sharing model. Sharing between RBI and Government. Cost sharing by banks.
Contd..
Challenges
MIS – sending of authenticated reports. Nodal agency to compile and provide authentic
MIS. Database MIS.
Operational issues. De duplication. Enrolment process. Money evacuation.
Contd..