Banks Strategies for Financial Inclusion

A. Rajan

Country Head-Operations

HDFC Bank Ltd

Agenda for Discussion

• Typical Challenges in Financial Inclusion• Support from Micro Finance & Self Help Groups• Information Communication & Technology• Mobile Banking• Biometrics ATMs• Rural Employment Opportunities

Challenges of Financial Inclusion

• Illiteracy• Remote Locations• Cost of servicing small sized transactions• Telecommunication• Reach of Technology

Micro Finance & Self Help Groups

– Reach remote unbanked areas/non branch locations

through SHG Lending Programme – SHG Clients being serviced with Loan & Savings

Products– Door step banking (disbursement of loans and

collection of installments) to all the SHGs using Service

Providers (SP) as our Business Correspondents.

Information Communication & Technology

• Cash Terminals – Card based transactions– Hub and spoke model with co-operative banks– Cash Deposit and withdrawals– PIN based cards

• Hand Held Devices – Biometrics enabled– Offline devices for remote locations– Biometrics for customer authentication– Transactions record on the spot

Mobile Banking – Catalyst for Microfinance

• Current Usage– Currently only for A/C Related Enquiry– Use of Mobile Phones for Financial Transactions

• Opportunities - Microfinance– Exploration with Technology Partners– Funds Transfer using Mobile Phones – SMS Based– Mobile to Mobile funds transfer ( Futuristic )– Stringent KYC norms of Telecom cos. to be leveraged

• Challenges– Security on mobile devices– Transaction encryption

Biometric ATMs

• ATMs with Biometric solution• Biometrics as authentication mechanism• Illustrative ATM screens for illiterate

customers

• Challenges– ATMs efficiency and maintenance in Rural

conditions– Biometrics efficiency in Rural condition

Rural BPOs

– Migration of non-core image based activities to Rural BPOs to create employment opportunities to rural youths.

– Enable rural youths to gainfully use their education in their own environment.

– Reduce rural youth’s migration to crowded cities causing frustration caused by infrastructural inadequacies there.

– Contribute to rural development enabling educated youth to support their family business in their spare time.

– Extra income enables Rural youths live a life of dignity and escape clutches of economic poverty.

Opportunities

• Improved Communications• Technology reaching out to the Rural

Areas.• Huge Business Opportunities• Stickiness of Rural Customers• Mass Banking – Very Large volumes• Low Establishment Cost

Thank You