Aarif….

Aarif….Aarif….32

Construction worker from Lucknow, working in Mumbai

He is working on the metro railway project

He receives wage at the end of the day

Aarif lives in a shared room with other workers

He has a feature phone, a debit card , voter id and even an UID

But, no safe place to keep his daily wage

He has to send money home, every month to his Abba and Ammi

What does

Aarif do?

What does

Aarif do?

ATMfor India

M.Des | Project 3Rajarshi Ray

Guide: Prof. R.Sandesh | Co-guide : Prof. N.SadhuIDC IIT Bombay

Financial inclusion

“… the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost”

- Rangarajan committee, 2008

Standard banking facilities to all irrespective of their income and socio-economic background.

About Rs 60 billion/ day can be collected by Government

No one has access to this liquid cash to do business

This is a low cost fund* (rate of interest levied is low)

70,000 bank branches in India, but a large section of Indian population remains credit starved^

*Rate of Interest : SBI SB a/c = 4% Yes Bank SB a/c = 6% Fixed deposit SBI = 9.25%^ Business Line, The Hindu, January 24,2006

From STAGE 0

SPEED OF URBANISATION BY 2030

Goldman Sachs argues that the economic potential of Brazil, Russia, India and China is such that they could become among the four most dominant economies by the year 2050. This thesis was proposed by Jim O'Neill, global economist at Goldman Sachs.#

INDIA BRAZIL

Population

No. of ATMs

1,339,724,854*

70,000~

192,376,496^

2,20,000~

*March 1, 2011. Census result ^ July 1,2011. IBGE Official Estimate ~ Lipi data systems Ltd. estimate 2011#http://www.foreignpolicy.com/articles/2010/08/16/prime_numbers_megacities?page=0,1

15,32,097

From STAGE 0

Objective

To design a banking system to address the needs of low income migrant class with low literacy levels. (rural people in urban setup)

Project brief

1 User friendly system which is not feared

2 Facility to

deposit, transfer and withdraw money

3 Easy interface for easy comprehension by the semi-literate people comprising construction workers, daily wage labours et al.

Survey carried out by International Data Corporation for NCR

Source : http://www.inclusivegrowth.co.cc/Mobile-Banking.html

Types of Account*

*Indian Bank’s Association : http://www.iba.org.in/account.asp as on January 30, 2012~ Business Standard : http://www.rediff.com/money/2005/nov/17perfin1.htm as onNovember 17,2005

Savings Account

Current Account

• Common account for individuals• Non-commercial transactions• Day-to-day banking transactions• Earning return

• Cheque operated accounts • Mainly business purposes • No limits on the number of transactions permitted• No interest on the balances maintained

No Frills Account ~• Zero balance or low minimum balance accounts • Policy of 'financial inclusion' of the poorer section• To counter a trend whereby all banks want to target the 'affluent' class

From STAGE 0

What is SBI doing in response ?

Green Channel * • Paperless banking introduced by SBI• Customer need not fill up any pay-in slips or draw cheques • Saves paper, and thereby contributing to the concept of ’Green Banking’• Originally targeted at Senior citizens who prefer branch banking

*http://thebankingbible.com/know-about-green-channel-counter-of-sbi-1332 as on January 31, 2012^ Gathered from conversation with Mr. J.Mukhopadhyay, Relationship manager,

Personal banking, SBI, Santiniketan, WB

Banker to every Indian

ATM penetration of SBI has been successful over the years. In fact customers today demand for ATM cards.To cater to the needs of BPL customers certain banks in rural areas have banking hours from 11AM – 6PM instead of standard 10AM – 5PM.

Focus of SBI in banking is now on :1 Green Channel 2 Mobile Banking 3 Internet Banking ^

From STAGE 0

Source : http://www.zamanzar.com/Mumbai/Commercial-Property-Prices.html

Source : http://www.telecomindiaonline.com/

Source : http://priyankasblog.com/mobile-india-a-statistical-look-at-urban-indian-mobile-users/

Source : http://www.pluggd.in/smartphone-users-in-india-297/

Source : http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats /

Source : http://www.pluggd.in/smartphone-users-in-india-297/

Mira Road, Maharashtra

@ Mira road

Human Tellers

10-15 lakhs

150 +

Cash depositing machine

75-80 lakhs

Unprocessed Cash = 1 Crore

Population comprise• contractors• labours• sex workers • businessmen • grocery vendors et al

Unprocessed Cash v ICMC processed Cashv

Integrated CashManagement Centre

(@ Bandra & Dombivali)

To Banks

v

Unprocessed Cash Remittance+ =processed Cash

Overnight cash holding limitCRI = Cash Remittance Limit ≈ 75 lakhs for Bank X at Mera road (can be as high as 10 crore)

ATMs do not have facility of cash recycling

(Auto fill of dispense tray from deposit tray)

v

NIM = Net Interest Margin

Loan given out=>

Advances _ Deposit = SPREAD

BOC = Branch Operating CostCHC = Cash Holding Cost = 2%CHC = Advances – (Deposit + BOC)CTF = Cost of FundsCTF = Σ (operating expenses + HR +ATM maintenance etc)

=>Advances Deposit = +ve~BANK PROFIT

ATM Service vehicle*

*Source : Obtained from WRITER Securities, Mumbai through personal interaction

• Cash filling is done only during daytime to avoid risks• One service agency/ service vehicle caters to multiple banks and is not exclusive to a bank• Cash collected to fill into an ATM is collected from an authorised bank branch• Only engineering servicing is done during night, in case of extreme emergency • One service vehicle caters to 15-20 ATMs of different banks in the same locality • Servicing one ATM ideally should take 15 mins but extends to about 30mins.

CREW = + +

Driver Technicians Armed guard

Driver

TechniciansArmed guard

Plan

Elevation

Vault

Vault

The vehicles which are usually retrofitted to serve as ATM service vans are Mahindra Maxi truck, TATA LP 407, TATA Winger etc.

Conclusions from User study

1 Depositing cash is a necessity for the target class.

2 People with low literacy levels are comfortable using automatic systems. They are experienced with using mobile phones.

However, a sense of security and immediate assistance is desired.

3 Cash recycling might not be possible in Indian scenario.

4 ATM card is shared between family members

2010 2015 2020 2025 2030

50 K

100 K

150 K

200 K

Demand

Supply

Year

Num

ber o

f ATM

s

Δx1

Δx2

Δx2 << Δx1

NB -This graph is only to aid explanation

Comparison of demand and supply of ATMs

What

can be the

SOLUTION

?

What

can be the

What

can be the

SOLUTION

?

What

can be the

CONCEPTS

VRS ATM CONCEPT : 1

Card swipe

Receipt output

Transaction slotTelephone

VRS ATM : Visual Mockup

User works all day Earns wage

Keeps part of wage

Deposits rest in ATM with help of VRS.Gets receipt.

Authorised vehicle collects the money

> User arrives at VRS ATM kiosk

1 User picks handset + swipes card - VRS is activated ; Language of user automatically identified

2 VRS begins3

Namaskar !Welcome to Hello Bank. Please enter your secret codeafter you hear BEEP

User enters PIN4

For deposit press GREENFor withdraw press RED For transfer press BLUEAfter you hear BEEP

VRS continues5 User presses GREEN6

User enters 6508

Money will now be deposited in Karim chacha’s a/c

Enter notes through the slot one by one after you hear BEEP

VRS continues9

User presses GREEN;Deposit channel activated

6 VRS continues; VRS has pre-fed information about USER’s related accounts

7

To enter money in Ramu’s a/c dial 505; for Karim chacha dial 650; for Ammi dial 777 after you hear a BEEP

505 650 777

Note is drawn inReal time display on screen

10

100

Note is drawn inReal time display on screen

10

100

USER keeps inserting notes until his target amount is reached

11

900Karim chacha now has Rs. 900. To continue deposit, insert the note through slot after BEEP or Press BLACK button to exit12 VRS continues

13 USER presses Black button

Rs 900 has been deposited in Karim chacha’s account. Thank you for using HELLO BANK VRS !

14 Receipt printed with transaction record

Segregated System CONCEPT : 2

Colour coded hardware

Segregated system ATM : Visual Mockup

User works all day Earns wage

Deposits rest in Deposit box of ATM. Gets receipt

TWD

Authorised vehicle collects the money

D

Keeps part of wage

Segregated System : Variant CONCEPT : 2

Colour coded channels

Small low Resolutiondisplay

Hard buttons indicating denominations like 500, 100 etc.

ENTER PIN

USER swipes card. ATM asks for PIN

1

DEPO

WITH

Deposit or withdraw option appears corresponding to buttons

2

Low resolution display

Printed dummy

CounterHard button

√

USER presses Deposit buttonDeposit channel activated

3

INSERT NOTE

USER gets instruction to insert note through active Deposit channel

4

Deposit channel

Rs 500

USER inserts note of Rs 500Counter shows number

5 USER inserts note of Rs 100Counter shows numberDisplay shows total amount inserted

6

Counter

1

Rs 600

1

1

X X

Rs 600

USER presses X button5 Deposit channel deactivated.Transaction receipt generated.

6

1

Thank youX

1

Deposit channel deactivated

Dep

osit

Rs 6

00

ATM on wheels CONCEPT : 3

Human teller

Automatic channels

ATM mounted on channel slides out

Technician & Teller

Plan Private space generated for USER

Technician

Withdraw module

Deposit module

Transfer module

ATM on wheels : Mockup

User works all day Earns wage

Deposits rest in ATM Van. Gets receiptATM Van deposits money to bank

Keeps part of wage

ATM mobile app + depository module CONCEPT : 4

Smart phone with banking app

Receipt

Transaction channel

CONCEPT : 4Mobile Banking Depository Module

> User gets ‘free’ app installed on mobile on opening bank a/c

> User gets info through app; like balance enquiry transaction record etc From bank’s server FREE OF COST

> Bank has small depository & withdrawal modules installed

> User goes near ‘deposit module’ with app on mobile & Dials ‘SECRET’ access number

> Module Activated

1 2 3

54

BANK NAME

BANK NAME

> User puts in cash through activated channel

> Module Activated > Mobile keeps showing amount entered in real time

> Once complete user presses OK button

Module deactivates & Generates receipt > Transaction record is noted in user’s a/c via app

SP 7

5 6 7

100

800 OK

8

9

RECEIPT

700

SW

O

T

• Comfortability of a human teller• Extended banking hours

• Diverse language VRS is difficult• Added cost of VRS• Cost of real estate

• Gradual training of novice users towards automated banking systems

• Diverse language options may confuse users

• Clear hardware demarcation• Cost reduction due to low resolution display

• Increased cost due to new hardware• Cost of real estate

• Effective for areas with low transaction volumes• Split hardware can be installed separately

• Proper space to install might be difficult to find• Designing new hardware

• Same equipment can cater to many areas • Retrofitting • Presence of humans• Night banking

• Man power necessary• Special vehicle required • Low cash handling capacity

• High penetration capacity • Can promote banking; eliminate fear about banking

• Moderate chances of dacoity

VRS ATM Segregated ATM ATM on wheels Mobile app• Cost of hardware minimal • Live account updating on mobile phone application

• User must have appropriate mobile phone

• Very high chances of success as mobile usage becoming popular day by day

• Chances of dacoity low, as amount transacted in very low

Thank you