ATM for India M.Des | Project 3 Rajarshi RayGuide: Prof. R.Sandesh | Co-guide : Prof. N.Sadhu IDC IIT Bombay
From STAGE 0 Financial inclusion “… the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost” - Rangarajan committee, 2008Standard banking facilities to all irrespective of their income and socio-economic background. About Rs 60 billion/ day can be collected by Government No one has access to this liquid cash to do business This is a low cost fund* (rate of interest levied is low) 70,000 bank branches in India, but a large section of Indian population remains credit starved^ *Rate of Interest : SBI SB a/c = 4% Yes Bank SB a/c = 6% Fixed deposit SBI = 9.25% ^ Business Line, The Hindu, January 24,2006
From STAGE 0 SPEED OF URBANISATION BY 2030Goldman Sachs argues that the economic potential of Brazil, Russia, India and China is suchthat they could become among the four most dominant economies by the year 2050. Thisthesis was proposed by Jim ONeill, global economist at Goldman Sachs.# INDIA BRAZIL Population 1,339,724,854* 192,376,496^ No. of ATMs 70,000~ 2,20,000~ 15,32,097 *March 1, 2011. Census result ^ July 1,2011. IBGE Official Estimate ~ Lipi data systems Ltd. estimate 2011 #http://www.foreignpolicy.com/articles/2010/08/16/prime_numbers_megacities?page=0,1
ObjectiveTo design a banking system to address the needs of low income migrant classwith low literacy levels. (rural people in urban setup)Project brief 1 User friendly system which is not feared 2 Facility to deposit, transfer and withdraw money 3 Easy interface for easy comprehension by the semi-literate people comprising construction workers, daily wage labours et al.
Survey carried out by International Data Corporation for NCR
From STAGE 0Types of Account* Savings Account • Common account for individuals • Non-commercial transactions • Day-to-day banking transactions • Earning return Current Account • Cheque operated accounts • Mainly business purposes • No limits on the number of transactions permitted • No interest on the balances maintainedNo Frills Account ~• Zero balance or low minimum balance accounts• Policy of financial inclusion of the poorer section• To counter a trend whereby all banks want to target the affluent class *Indian Bank’s Association : http://www.iba.org.in/account.asp as on January 30, 2012~ Business Standard : http://www.rediff.com/money/2005/nov/17perfin1.htm as onNovember 17,2005
From STAGE 0What is SBI doing in response ? Green Channel * • Paperless banking introduced by SBI • Customer need not fill up any pay-in slips or draw cheques • Saves paper, and thereby contributing to the concept of ’Green Banking’ • Originally targeted at Senior citizens who prefer branch banking ATM penetration of SBI has been successful over the years. In fact customers today demand for ATM cards. To cater to the needs of BPL customers certain banks in rural areas have banking hours from 11AM – 6PM instead of standard 10AM – 5PM. Focus of SBI in banking is now on : 1 Green Channel Banker to every Indian 2 Mobile Banking 3 Internet Banking ^ *http://thebankingbible.com/know-about-green-channel-counter-of-sbi-1332 as on January 31, 2012 ^ Gathered from conversation with Mr. J.Mukhopadhyay, Relationship manager, Personal banking, SBI, Santiniketan, WB
Population comprise • contractors • labours 150 + • sex workers • businessmen • grocery vendors et al @ Mira roadCash depositing machine Human Tellers 10-15 lakhs 75-80 lakhs Unprocessed Cash = 1 Crore
Unprocessed Cash v v processed Cash Integrated Cash Management Centre (@ Bandra & Dombivali) v To Banks Unprocessed Cash + processed Cash = Remittance
Overnight cash holding limitCRI = Cash Remittance Limit ≈ 75 lakhs for Bank X at Mera road (can be as high as 10 crore)ATMs do not have facility of cash recycling v (Auto fill of dispense tray from deposit tray)
NIM = Net Interest Margin Loan given out => Advances _ Deposit = SPREADBOC = Branch Operating CostCHC = Cash Holding Cost = 2%CHC = Advances – (Deposit + BOC)CTF = Cost of FundsCTF = Σ (operating expenses + HR +ATM maintenance etc) Advances ~ Deposit = +ve => BANK PROFIT
ATM Service vehicle*• Cash filling is done only during daytime to avoid risks• One service agency/ service vehicle caters to multiple banks and is not exclusive to a bank• Cash collected to fill into an ATM is collected from an authorised bank branch• Only engineering servicing is done during night, in case of extreme emergency• One service vehicle caters to 15-20 ATMs of different banks in the same locality• Servicing one ATM ideally should take 15 mins but extends to about 30mins. CREW = + + Driver Technicians Armed guard *Source : Obtained from WRITER Securities, Mumbai through personal interaction
VaultTechnicians Elevation Vault Armed guard Plan Driver The vehicles which are usually retrofitted to serve as ATM service vans are Mahindra Maxi truck, TATA LP 407, TATA Winger etc.
Conclusions from User study 1 Depositing cash is a necessity for the target class. 2 People with low literacy levels are comfortable using automatic systems. They are experienced with using mobile phones. However, a sense of security and immediate assistance is desired. 3 Cash recycling might not be possible in Indian scenario. 4 ATM card is shared between family members
Number of ATMs Comparison of demand and supply of ATMs Demand200 K Δx2 Supply150 K Δx1100 K Δx2 << Δx1 50 K 2010 2015 2020 2025 2030 Year NB -This graph is only to aid explanation
VRS ATM : Visual Mockup Keeps part of wage User works all day Earns wage Authorised vehicle collects the money Deposits rest in ATM with help of VRS. Gets receipt.
Namaskar ! Welcome to Hello Bank. Please enter your secret code after you hear BEEP1> User arrives at 2 User picks handset + swipes 3 VRS begins VRS ATM kiosk card - VRS is activated ; Language of user automatically identified For deposit press GREEN For withdraw press RED For transfer press BLUE After you hear BEEP 6 User presses GREEN 5 VRS continues 4 User enters PIN
505 650 777 To enter money in Ramu’s a/c dial 505; for Karim chacha dial 650; for Ammi dial 777 after you hear a BEEP6 User presses GREEN; 7 VRS continues; VRS has Deposit channel activated pre-fed information about USER’s related accounts Money will now be 100 deposited in Karim chacha’s a/c Enter notes through the slot one by one after you hear BEEP10 Note is drawn in 9 VRS continues 8 User enters 650 Real time display on screen
Karim chacha 100 900 now has Rs. 900. To continue deposit, insert the note through slot after BEEP or Press BLACK10 Note is drawn in Real time display on screen 11 USER keeps inserting notes 12 VRS continues button to exit until his target amount is reached Rs 900 has been deposited in Karim chacha’s account. Thank you for using HELLO BANK VRS ! 13 USER presses Black button 14 Receipt printed with transaction record
Segregated System CONCEPT : 2 Colour coded hardware
Segregated system ATM : Visual Mockup Keeps part of wage User works all day Earns wage D D W T Authorised vehicle collects the money Deposits rest in Deposit box of ATM. Gets receipt
Segregated System : Variant CONCEPT : 2 Hard buttons indicating denominations like 500, 100 etc. Colour coded channels Small low Resolution display
Printed dummyHard button Counter ENTER DEP WITH PIN O 1 USER swipes card. ATM 2 Deposit or withdraw option asks for PIN appears corresponding to buttons Low resolution display
Deposit channel √ INSERT NOTE3 USER presses Deposit button 4 USER gets instruction to insert Deposit channel activated note through active Deposit channel
Counter 1 1 1 Rs 500 X Rs 600 X5 USER inserts note of Rs 500 6 USER inserts note of Rs 100 Counter shows number Counter shows number Display shows total amount inserted
Deposit channel deactivated 1 1 Rs 600 X Thank you Deposit Rs 6005 USER presses X button 6 Deposit channel deactivated. Transaction receipt generated.
ATM on wheels CONCEPT : 3 Human teller Automatic channels
Technician Technician & TellerTransfermoduleDeposit moduleWithdraw module ATM mounted on channel slides out Plan Private space generated for USER
ATM on wheels : Mockup Keeps part of wage User works all day Earns wage ATM Van deposits money to bank Deposits rest in ATM Van. Gets receipt
ATM mobile app + depository module CONCEPT : 4 Smart phone with banking app Transaction channel Receipt
Mobile Banking Depository Module CONCEPT : 4 BANK NAME1> User gets ‘free’ app installed 2> User gets info through app; 3> Bank has small depository on mobile on opening bank a/c like balance enquiry & withdrawal modules installed transaction record etc From bank’s server FREE OF COST BANK NAME 4> User goes near ‘deposit module’ 5> Module Activated with app on mobile & Dials ‘SECRET’ access number
SP 75> Module Activated 6> User puts in cash 7> Mobile keeps showing through activated channel amount entered in real time 9 Module deactivates & Generates receipt > Transaction record is noted in user’s a/c via app 8> Once complete user presses OK button
VRS ATM Segregated ATM ATM on wheels Mobile app • Same equipment can • Cost of hardware • Comfortability of • Clear hardware cater to many areasS a human teller minimal demarcation • Retrofitting • Extended banking • Live account • Cost reduction due • Presence of humans hours updating on mobile to low resolution • Night banking phone application display • Diverse language • Increased cost due • Man power necessary • User must haveW VRS is difficult to new hardware • Special vehicle appropriate mobile • Added cost of VRS • Cost of real estate required phone • Cost of real estate • Low cash handling capacity • Gradual training • Effective for areas • High penetration • Very high chances ofO of novice users with low transaction capacity success as mobile usage towards volumes • Can promote becoming popular day automated • Split hardware can banking; eliminate fear by day banking systems be installed about banking separately • Diverse • Proper space to • Moderate chances • Chances of dacoityT language options may confuse users install might be difficult to find • Designing new hardware of dacoity low, as amount transacted in very low