HCL, TCS bag contract for BoI's IT-based inclusion plan

Tata Consultancy Services (TCS), HCL Infosystems and Integra Micro System have bagged a contract worth Rs 243 crore from Bank of India (BoI) to provide information technology (IT)-based solutions for financial inclusion.

The bank had a three-year plan to disburse credit worth Rs 12,000 crore and open 12.5 million no-frill accounts, including 1.2 million in urban areas, a senior official at the bank said.

Financial inclusion is delivery of banking services at an affordable cost to a vast section of the disadvantaged and low income group. It also means extending the banking habit among the less privileged in urban and rural India and weaning them away from unorganised money markets and moneylenders.

There will be an in-built overdraft in all no-frills accounts and the bank intends to issue entrepreneurship credit to 6.7 million households through credit products like Kisan Credit Cards and General Credit Cards.

HCL, TCS and Integra Micro System will provide smart card-based solutions. Integra will be also involved in mobile-based solutions. HCL has commenced work on a pilot project in Ranchi in Jharkhand and Thane, adjoining Mumbai. TCS is engaged in pilot projects in Bhagalpur in Bihar and Khandwa in Madhya Pradesh.

BoI plans to cover 40,000 villages, out of which 7,400 villages will get services by March 2011. It has already opened 3.56 million no-frills accounts and issued 0.45 million smart cards up to June 2010.

According to the Reserve Bank of India data, the reach of financial services is limited to 41 per cent of the population. About 61 per cent of the rural population is outside formal financial services.