Dbt strategy synopsis of recommendations

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Dbt strategy synopsis of recommendations

  1. 1. Strategy Paper on Direct Benefit Transfer: How to make it happen Summary of Recommendations 1. Dedicated officers for FI at all rural branches to promote FI as an important line of business. 2. DBT-Led Financial Inclusion to be based on Aadhaar Platform. It should be led by DBT. DBT should include obligation to make available payment of cash at habitation level. Business volumes can be built with active campaign for DBT. 3. Customer Service Provider: CSP to be a resident of the village and every village to have a CSP. CSP to act as Business Correspondent and Business Facilitator. BC-BF should be tagged to the branch not to Corporate BC. 4. ICT to provide end-to-end solution with online transactions and visibility to the FI Officer/Branch Manager. 5. Inter-operable FI Solutions to work across bank, place and agent. 6. Multiple platform access: Rupay Card, Biometric-enabled Rural ATM in every Village, Establishments, Mobile money, etc. 7. Aadhaar as proof of identity and proof of address for the residents, facilitates instantaneous opening of bank account and delivery of services. 8. CIDR as sole custodian of biometric data of residents. 9. CIDR to provide biometric authentication services as a public utility on not for profit basis. 10. NPCI-APB-AEPS as backbone for hassle free FI Platform. 11. Trigger the Gold Rush. Penetration pricing to cut across barriers & inhibitions. 12. Service as Right. Ensure mobile connectivity in all villages; roll out FI services in all connected villages. Let telecom providers connect remaining villages as per market share or let BSNL do it.
  2. 2. 13. Keep it simple and stupid. Reengineer processes and Redesign Financial Inclusion Products and services. 14. Start NOW & right away delivering services. Wait for nothing or no one. Fast track the FI Campaign. 15. Bring SBI Group, Nationalized banks and RRBs fully on board. 16. Solar modules for charging micro ATMs. 17. Trigger the Gold Rush: Adopt a Strategic Approach: 18. Neutralize First-mover disadvantages & promote First-mover advantage. 19. The first bank to seed the account and make payment on AEPS retains the seeding for a period of one year as the default banker. It will retain customer, if continues to serve better as per annual performance. & 20. Identify Stakeholders & reward value chain activities attractively. 21. Identify risks like wrong seeding and false acceptance and create a fund to neutralize them. 22. Provide a Law for Aadhaar, DBT and FI covering UIDAI, CIDR, protection against abuse of data, profiling, breach of privacy, protection of actions done in good faith, recovery of amounts credited/paid wrongly, etc. 23. Post Office as Bank on CBS. 24. No service tax on financial inclusion services for ten years. 25. Exception Handling Procedures for residents failing authentication: One Time Password, Authorized Messenger, Joint Account, etc. 26. Customer Protection: Provide for Mini-statement, SMS alerts, transaction print out, pass book entries, voice over in vernacular. 27. Trigger the Gold Rush: Provide an Attractive Reward System: to all Stakeholders; settle the dues at day end. Sponsored Bank, Beneficiary Bank, Paying Bank, Technology Service Provider,
  3. 3. Business Correspondent, Customer Service Provider, APBS, AEPS, Risk Fund. Total Cost of DBT for User Agency: 2.55%. 28. Special FI accounts which can be credited with their share of remuneration instantly or on day-end settlement basis. 29. Cash Management for Financial Inclusion: Supply of cash in interoperable scenario: BC-CSP can be allowed to draw cash from any bank branch or ATM to make DBT Payments upto Rs. One lakh per day. 30. Create Demand Pull: Availability of service will make the resident demand for more! They will volunteer for enrollment, opening up of villages for services, cutting across feudal barriers & vested interests and inhibitions against change. 31. AP experience shows universal acceptance & customer satisfaction. 32. Work in Mission Mode: Enrolments for AADHAAR on campaign mode on saturation basis. 33. Expedite generation, issue & delivery of UIDs. 34. Permanent Enrolment Centers for residual enrolments and for updating existing records. 35. Now there is a Mission Director for DBT at the Centre; every State may have a State Mission Director to lead the roll out locally. 36. If it is so BIG, give it What It Takes (WIT): A. Build on Strengths: Public Sector Banks to recruit, train & deploy 35000 new rural bank officers on Service Area Approach with private banks to offer competition and choice to customer. B. Broadbase the system and make it universal, inter-operable and ubiquitous: The services can be made accessible to residents through multiple agents across banks, multiple establishments, multiple channels like biometric ATMs, through Rupay Cards, mobile banking, etc. C. Jobs for a million functionaries: CSPs in 6 lakh villages supported by FI officers, ultra small branches
  4. 4. Reasons for Slow Progress of FI-DBT: 1. 2. 3. 4. 5. 6. 7. Absence of Business Case for any Stakeholder; Bank-TSP-BC-CSP. FI-EBT taken up to satisfy Govt & RBI; Corporate Social Responsibility. Private databases for biometrics: inability to saturate enrollments. Unreliable mechanism for service delivery. Poor connectivity for GPRS in villages. Shortage of Electric Power to charge POTD. Absence of adequate number of reliable Corporate BCs and Technology Service Providers. 8. Failure of common RFP to appoint Business Correspondents. Reasons for slow progress on AADHAAR Platform: 1. Enrollments are not completed; large number of poor people still left out. 2. Delays in issue of UID, in communicating UIDs issued. 3. Delay in seeding databases of User departments. 4. Delay in seeding Bank accounts and in mapping them on NPCI-APB. 5. CSPs yet to be positioned in many villages. 6. Procurement and positioning of micro ATMs to be done. 7. Inter-operability among banks, still not achieved. 8. SBI Group and some Nationalized banks are still not on board. 9. Remuneration of stakeholders is not yet defined. Banks gain nothing by doing FI-DBT. No clarity on remuneration of TSP-BC-CSP. 10. Professions of faith in FI-DBT do not result in service availability. 11. Statistics on FI speak of BCs positioned and accounts opened, but are silent about services rendered and volumes achieved. 12. Absence of dedicated officers for FI. 13. CSPs are poorly paid and have no motivation. 14. Technology is in place; Policy and Strategy are found wanting.

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