Business Standard
Sunday, Nov 08, 2009
 
drived banner
drived banner
  Advanced Search
Feedback | RSS
Content Guide
Follow us on  
  Home  |Markets & Investing|Companies & Industry|Banking & Finance|Economy & Policy|Opinion|Life & Leisure|Mgmt & Mktg|Tech World|BS Products 
 BS Headlines | News Now | BS Weekend | The strategist | The Smart Investor | Lunch with BS | Columnists | BS 1000
  Hindi | E-Paper | Motoring  | Live Markets |  Smart Portfolios II  | Blogs | Portfolios >
  Search:
Phone banking
Business Standard / New Delhi March 28, 2008
By the end of the year, the Andhra Pradesh government plans to give its rural pensions through the mobile telephone network, after a successful pilot has shown that the system works well. As this newspaper reported last week, 147 villages in Warangal district are already getting payments under the rural employment guarantee programme in this manner. The project comprises a Near Field Communication- (or NFC-) enabled mobile phone, which synchronises with a bank’s server over a wireless connection, using a fingerprint scanner and a thermal printer. So, if an NGO or the village sarpanch becomes the bank’s “business correspondent”, he/she gets the villagers’ fingerprints on the scanner and enrols them — a Bluetooth connection transmits these to the phone, which then synchronises with the bank’s server. The phone now serves as the bank’s computer in the village and all deposit/withdrawal transactions get reported to the bank on a daily or even hourly basis, depending on the frequency of synchronisation. All the bank needs to do is to ensure that the “business correspondent” has enough funds to take care of daily withdrawals — 14 banks are already using this system in 42 districts in 17 states. Based on reports on some of these banks, the costs are low enough for the system to be viable. Nearly half a million customers in villages are being served by these banks, using this system.
 
So far, the biggest hurdle to such transactions has been the high cost of setting up branch networks and in issuing smart cards to ensure that the person operating the account is the same as the person (possibly illiterate) opening the account. While a smart card with biometric information is one way to deal with account verification, a smart card can cost Rs 80-100. The NFC-phone-cum-scanner is simpler since fingerprints are used to verify identity. For a typical village, the cost would drop from Rs 1.5-1.7 lakh to Rs 20,000. What of the transaction costs? Right now, the government gives banks 2 per cent of the amounts being transferred as commission, and the bank shares this with its business correspondents. With more players coming in, this is certain to come down. According to Sony, which is one of the co-developers of the NFC phone, a fourth of all phones available in the market will be NFC-enabled in a few years. NFC phones have already been deployed in various cities as electronic bus tickets and even as loyalty cards for discounts at restaurants and shops. The technology is available and it makes sense to use it to the fullest, because it can make an enormous difference to bank accessibility, ease of service to rural customers, and accountability as well as transparency when it comes to government payments.

 
 
  Read Business news in 
Advertisements
  Your dream home can now be a reality.
  Visit Fortis for a preventive health check-up & get a 20% discount.
  Follow the ups and downs of your investments. Try our new Portfolio Tracker
  Kolkata Dock \ Freight contract for the British Gurkhas Nepal
  Find how Midsize Businesses use ERP to gain competitive advantage
  Trading in Forex is now as easy as 1-2-3
  Discover an economical and cost effective way to market your products and services
  Giftwithlove.com: Same day delivery of Flowers and Cakes to India
  Download the E-book on the Future of Business Intelligence
  Learn Best Practices for improving customer satisfaction
  Know your customers better... download the free e-book on CRM
   Discussion Board / User Comments    
Display Name  Email-Id  
Post your comment
Most Popular
Read
E-Mailed
Commented
   
- Vendors to share BSNL's 3G ad spend
- Great Indian telecom boom begins to ring hollow
- DTH sparks new row between producers and multiplexes
- Profit booking seen next week
- Now, shell out Rs 80,000 more for a designer Nano
 
 More  
BS Poll
Cast Your Vote
 
   
 
Should the private sector be allowed to manage urban water supply?
  Yes  No
Submit

  Hot Searches  
 
Amitabh Bachchan | N Chandrasekaran | Swine Flu | Mukesh Ambani | Anil Ambani | TCS | Infosys |  Air India |  Duronto |  Pranab Mukherjee | Sonia Gandhi | Congress | Rahul Gandhi |  Bigg Boss |  New Pension Scheme |  Service tax |  Excise duty |  Sebi | Tech Mahindra |  Ramalinga Raju |  Satyam |  Reliance  |  RBI |  GDP |  Gold |  Ratan Tata |  ICICI |  |  B-School | DLF  Sensex |  Tax calculator | Home Loan  | Bollywood | Personal Finance |  inflation | oil prices |  World Bank | Reliance Infratel |  HDFC |  Barack Obama  
  Member Area Write to the Editor RSS Archives Advanced Search
  Subscribe to BS print product BS e-paper Newsletter Portfolio Tracker
  BS Products BS Hindi BS Motoring
FOR HOT PRODUCTS
BS Bazaar.com
Home | Markets & Investing | Companies & Industry | Banking & Finance | Economy & Policy | Opinion
Life & Leisure | Management & Marketing | Tech World
About Us | Partner With Us | Code of Conduct | Careers | Advertise with us| Terms & Conditions | Disclaimer | Site Map | Contact Us | Feedback