Company Confidential 1

100% Financial Inclusion is a stated goal

- Telcos can be the biggest catalysts to achieve that

Company Confidential

Hard facts about Soft Issues

• More experience in serving targeted customers – Mobility penetration in non urban areas is higher and growing fast

• Huge investment in brand– focus on high quality and integrity of service delivery

• Soft investment is more important– Customer training and education

– Channel Management

• Familiarity of operating in a regulated environment– KYC and QOS as per regulation

• Mobile technology is secure and accessible– High levels of privacy/security at low cost of entry

Company Confidential

Mobile subscribers growth pattern

0

100

200

300

400

500

600

700

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mobile Subs (in Mn) Unique A/c Holders (in Mn)

Data interpretedSource: RBI 2006, COAI

Company Confidential

Customer Contact Points - Rural

200

45

0

50

100

150

200

250

Telecom / Banking

Telco outreach

Customer Contact Points - Urban

600

60

0

100

200

300

400

500

600

700

Telecom / Banking

Estimates, Figures in 000sSource: National Census, RBI, COAI

Company Confidential

• Invest large sums in developing brand

• Invest large sums in deploying technology

• Established financial strength and stability

• Large existing customer bases

High stakes for a Telco

Telcos have attained Customer trust

Company Confidential

Unique Bank-TelCo partnership

• Best of both worlds– TelCo’s existing relationship with customer

– TelCo’s knowhow on customer handling

– TelCo’s knowhow on customer education & service

– Bank’s knowhow on Banking regulation, best practices & AML

– Bank’s knowhow on Cash Management

• Cost optimization for banks– Less viability for banks to run accounts with < Rs. 5,000 AQB

• Ride the TelCo’s channel to achieve reach

• Using customer history for future product offerings. E.g. microfinance loans

Company Confidential

Redefining roles – Enable Financial Inclusion

• Customer registration & access

• Assist in KYC

• Acceleration of Penetration

• Customer Care

• Distribution & Outreach

• Technology Solutions

• Creating usage avenues

• Open Accounts

• Implement AML & KYC guidelines

• Customer grievance guidelines

• Custodian of customer monies

• Best banking practices

• Interest payments

• Offer range of Banking products

TelCo Bank

Equal partners – balanced roles

Company Confidential

Regulation – consultative approach

• Proportionality– Risk-based approach

• Mobile experience– As different to traditional approach

• Innovation – Innovative services may not fit well within existing regulation categories

Guiding principle - Customer security and benefit

Company Confidential

Economy

•Extends economic inclusion to rural poor• Starts rural people

on the ladder of banking

•Reduces urban rural divide

Regulator

•Achieving Financial Inclusion objectives faster

•Maintaining Control

Bank

•Increases reach at viable cost – network benefits

•Additional revenue streams•Lower costs

TelCo

• Additional revenue stream• Customer stickiness

Customer

•Economic independence•Preserves Confidentiality

•Greater Convenience•Transaction speed

Benefits of Success

Company Confidential

Thank you