mor-icici-india-EFfD (3)

8/2/2019 mor-icici-india-EFfD (3)

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e-Finance for Development- An Indian Perspective

Monterrey, Mexico March 19, 2002


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Agenda

Development Banking in IndiaICICI - Development frameworkSectoral initiativesLegal structure in IndiaGoing Forward


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Development Banking in India

Priority Sector in India characterised byLow capitalisation and limited assetsGeographical diversity and high mortalityPoor access to capital markets

Non accessibility to credit historyCash intensity in transactionsCyclical fund requirement and high commodity riskInformal sector and uncorporatised

High dependence on Govt. support/ subsidiesPoor financial disclosure on account of tax issuesHigh risk perception has led to high borrowing costs


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Agenda

Development Banking in IndiaICICI - Development frameworkSectoral initiativesLegal structure in IndiaGoing Forward


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ICICI Group - Developmentframework

Product lead approach for each sectorSmall and Medium Enterprise (SME)Agriculture and Micro FinanceCommunity Banking

Internet and Electronic BankingProduct and delivery technology dependentBranch remote approachCentral processing centres enable optimummonitoring


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Agenda

Development Banking in Indiae-initiatives in ICICI GroupSectoral initiativesLegal structure in IndiaGoing Forward


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SME - Strategic framework

Concerns Improve Quality Exit weak accounts Improve yields Reprice on RaRoC

benchmark Reduce delivery cost Web / call centre based

delivery

Aspirations Non capital intensive

growth Liability/ fee income Cash management

product Innovative delivery Smart / Credit cards Web / call centre

delivery Service relationships Banker for services

rather than credit


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SME - Service & DeliveryInformationLogging requests

Call centre

Customer

Branch

ATM

For alltransactionsexcept highvalue cash

Drop box point

High value cashtransactions

Handles exceptionsCross sellsMonitors accounts

Account/ Relationshipmanager

Trade financefactory

Credit factory

RPC/CPC

Processes all

pure creditrelated requests

Processes alltrade related

requests for acity

Providesupportbackbone forall transactionrequestsServicesdoorstepdeliveries

InformationLoggingrequests

InternetProcessing centres*


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Online Products

e-banking in ICICI

ICICI Marketsonline FX, Debt,

SME Portal

Corporate Infinityonline transfer/settlement system

Bill JunctionUtility bill payments

Business Multiplierweb interfaceICICI Direct and ICICI

Select

Pay Sealelectronic paymentsystem


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Agri - Micro-credit initiatives

Innovative structure for micro-credit in rural areasOvercome the reach problemLower administration costs

Channels for delivering micro-credit

Sugar companiesSeed producersInput companiesNGOs and micro credit institutions

These channels help build volumes, reduce costs andmonitor credit risk


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FSC provides one stop solution to the farmerAgri extension supportInputs and other servicesCredit

Market linkageRural infrastructure

These FSCs are promoted by Agri Input suppliers ,and avoids duplication of efforts by different players

Agri - Farmer Service Centres (FSCs)


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Smart card solution for FSCs

Bank Account/Credit History

Output Sale

Collect Money

Farmer Service Center

Credit Debit e-purse

MerchantStoreInput

Online update of Bank accounts


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Smart Cards An alternative

Difficulty in rural bankingManagement of Cash

Cost of idle cashCost of cash handling infrastructure

Geographical spreadsSolutions through

Elimination/ reduction of cash handlingInnovation of low cost delivery channels

Smart Card - an ideal vehicle


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Smart Cards at ICICI

Smart Cards launched in October 2000Infosys Campus in BangaloreManipal Academy of Higher Education (MAHE)

New Initiatives

Satyam Smart CardHPCL Petro CardWork on multiple application card - Debit, Credit, E-Purse and Loyalty


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Social Initiatives - ICICIcommunities

Give Online: On-line donation channelRetail donors can donate to specific initiatives acrossIndia100% of donations reach the initiative

Prompt feedback on utilisation of grantRs. 11.5 million towards Gujarat Earthquake

Shop the Cause: On-line shopping mallOver 100 exquisite hand crafted products available

The only facility of its kind available tonon-profits in India


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Innovations in Delivery Channels

Sustainable Access for Rural India (SARI) projectPartners: MIT Media Labs, Harvard University, IIT-Chennai, I-Gyan, DHAN Foundation, ICICI LtdProviding reliable Internet access through Kiosks in

rural Madurai using corDECT WiLL100 kiosks managed by entrepreneurs to be set-upProviding e-governance, communication andinformation services

Possibility of delivering banking services throughInternet kiosks being explored


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Internet Banking

First Bank in India to launch website - 1996First Bank in India to launch Internet Banking - 1997First Bank in India to launch online bill payment-1999

Only Bank in India with million online customersMonthly average transactions per online customer-7


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Internet Banking - Statistics

117% increase in transaction volume since April2001More than 1 million contacts in February 2002Coverage across 100 locations in the country

103% increase in internet banking registrants since April 01 84% increase in transactions since April 01


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Channel Usage

Apr 2001

Branch

41%

ATM51%

Internet4%

CallCentre

4%

Jan 2002

Cops7%

Branch35%

Internet5%

ATM47%

Call

Centre6%

Br anch ATM Cal l Cent r es Net COPS

Jan-02 18% 82%

Apr-01 19% 81%

Jan-02 41% 33% 9% 7% 10%Apr-01 50% 39% 6% 5% Nil

Cash Tr ansact ion s

Non Cash Transact ion s

Nil

Nil


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Retail Initiatives - Utility Payments

First bank to introduce this service in IndiaTie-ups with 50 utilities for online paymentsTalks with state governments/ municipalities tofacilitate e-governance

AP Govt. initiative - eSevaonlineVizag Municipality - Saukaryam


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Agenda



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e-banking related laws

e-banking governed by:Information Technology (IT) Act, 2000Internet Banking guidelines of the Central Bank

India is the 2nd country in Asia to initiate

technology related acte-banking encouraged through:

Focussed legislationAccess to IT skills, computers and incentives to ISPs


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Central Bank guidelines

Bank to have security policy approved by Board ofDirectorsIntroduction of logical access control systemsSecurity buffers between bank system and internet

Products to be compliant with domestic foreignexchange regulationsSetting of inter bank payment gatewayMandatory disclosure of risks in internet baseddealings


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Agenda



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Creating the e wave - Statutory

Legal validity for e transactionConsumer ProtectionNegotiable Instrument ActAcceptance of electronic based document

Full Account ConvertibilityExchange Control LawsStrengthening the Intellectual Property Laws


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Creating the e wave - Infrastructure

Encourage internet/ e usage Voice over InternetImprovement in telecom infrastructureTax incentives for internet based transaction

Incentive for electronic settlement


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Creating the e wave - Banking

Allowing appointment of third parties for bankingAllowing variable interest rates on depositsModifications in service area approach toencourage competition in the rural areas

Undertaking specific initiatives to provide animpetus to rural banking

Computerisation of operations of banks especiallythe rural operations

Land Records ComputerisationNetworking of Post Offices


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Creating the e wave - Electronic

Standards for smart cardsGuidelines on smart card interoperabilityChanges in Central Bank guidelines

Eligibility of clients

Loading of valueProvision of written reports and receipts

Govt. incentives to stakeholdersGovt. encouragement for ATMs/ POS infrastructureterminals


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e-enabling the economy Thank You !!!

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mor-icici-india-EFfD (3)