Saturday, February 6, 2016

Interlinking eLounges in India-Break the Silo Mentality

          In the last year, Banks in India have been setting up eLounges across the country to encourage customers to migrate to Digital Transactions.

          Q: What is eLounge?
Ans: In layman’s language, eLounge is a self-serviced banking kiosk to enable bank customers to transact a variety of transactions at their own pace.

eLobby Banking can be understood  as the automated delivery of new and traditional banking products and services without the intervention of the bank staff and through the interactive communication channels.

          The following links show the spread of eLounge/eLobby in Banking sector in India.
State Bank Tech Learning Centre – Interactive learning session to familiarise Bank’s alternate banking channels viz Net Banking, Mobile Banking, Green Channel, ATMs, CDMs, Plastic Banking(Cards), Pass Book digital printing & more

          One of the main reasons for low adoption of eTransactions in the rural areas is the absence of safe transaction environment.

One way of reducing the fear of unsafe transaction environment is to ensure safe transaction environment.

Another challenge is the frequent disruptions due to power cuts or internet failures.
          The above links show that major banks in India have invested heavily to offer Safe eBanking environment to their customers. Please note this eLounge services is restricted to their CUSTOMERS.           Other bank customers can only access ATM services.

These eLounges’/eLobbies’ offer the following services, depending on the respective bank’s vision for increasing digital transactions:-

  • Cash Dispenser
  • Passbook Printing kiosk
  • Coin Vending Machine
  • PCs for Netbanking facility
  • Cash Deposit Kiosks
  • Cheque Deposit machines
  • Self service terminals
  • Automated Pass Book Printing
          All the above services operate in silos i.e they offer service to their respective bank customers only and no inter-operability is possible.
          This means a Bank of Baroda customer cannot access his/her account at Corporation Bank eLobby.

          Drawbacks of the Silo Mentality:

a)     Low number of transactions
b)    High maintenance  cost
c)     Low turnover of  transactions
d)    Reduction in Management interest
e)    Gradual shutdown of eLounge/eLobby

Reserve Bank of India vide its circular No RBI/2015-16/288
DBR.No.BAPD.BC.72/22.01.001/2015-16 dt.January 14, 2016 outlined the “Facilities which can be provided through ATMs”.

Broad interpretation of this circular indicates that customer of any bank should experience Safe Digital transactions environment in any ATM and should not be tied down only to his/her Bank eLounge.

ATMs should be kept free for cash transactions only and other machines in the ATM lobby may be made available for other facilities.

The average time for a cash transaction at ATM is 60 seconds and the average time for a non-cash transaction ranges from 60 seconds to 180 seconds.

The Alternates:

a)     Linkages of all banks eLounge/eLobby
b)    Customers of any bank can access basic electronic banking service at any bank eLounge/eLobby

As the basic infrastructure is already in place, linkages of eLounges’/eLobbies’ are feasible with minimal investment by the respective banks. 

Advantages of such linkages:

01)  Increase in footfalls at the eLounges’/eLobbies’
02) Increase transactions turnover at the eLounges’/eLobbies’
03)  Reduce recurring expenditure
04)  Assist in the spread of Digital India Vision

The broad contours of a typical eLounge for Safe eTransactions are as under:-

1.     Each hub to have a minimum of 3 high end computers
2.     Each hub to have broadband connection
3.     3 FA (3 Factor Authentication)
A.    1st Factor – something the user knows
B.    2nd Factor – something the user has
C.     3rd Factor – something the user has
4.     The hub to be protected from internet viruses and other threats

Bank eLounges can be set up "CSC eGov” service centres. 1,40,000 CSC eGov service centres are spread over India. The number is expected to be scaled up to 2,50,000 in the next couple of years. Difficult to believe!! Check this out.

At a single stroke, the footfalls in CSC service centres will increase and boost ancillary services too.

Friday, January 29, 2016

CashBack from Film Producers-Unexplored market

In the last couple of years, Indian eCommerce buyers have been bombarded with ‘CashBack’, offers from all Online shopping sites.

             CashBack is normally of the following types:-

  • Straight Discount over MRP – given by the seller or the online shopping site
  • CashBack Credit – This is given by the online shopping site. The CashBack amount is credited to the buyer’s account within a specified time period and the buyer’s can redeem in future.
  • CashBack Credit – This is given by the Digital Wallet companies. The CashBack amount is credited to the buyer’s digital wallet and the buyer’s can redeem this amount in any participating online sites.
CashBack or Discount is offered for almost all categories of goods.

Major eCommerce companies announce the amount of CashBack budget through which they plan to attract shoppers to their sites.

              @ Flipkart, Amazon and Snapdeal expected to burn Rs 2,000 crore in months leading to Diwali

              The first recorded history of CashBack is the program run by credit card companies wherein a percentage of the amount spent is paid back to the card holder in terms of points, airline points, or straight monetary amount.

              The CashBack is treated as normal marketing expenses.

              However, till date no CashBack has been offered on movie tickets.

              The marketing budgets for recently released Indian movies(Hindi,Telugu,Tamil etc) are sky-rocketing.

              Movie makers are unveiling innovative ideas to grab the viewers’ eyeballs. The trick is to get as many as viewers into the movie theatres.

              ‘Saala Khadoos’ publicity budget is INR9 crores. The majority of the budget is being spent on nationwide tours by the main cast.

              ‘Airlift’, publicity budget is INR15 crores give plus or minus a couple of crores.

              However, no movie producer is offering CashBack to the movie-goers. Technically this is feasible.

              Which eCommerce Site/Digital Wallet will be the first in world to offer CashBack to movie goers.

Sunday, January 24, 2016

Public/Private Sector Banks should be banned from opening PMJDY Accounts

          The PMJDY launched by Prime Minister Narendra Modi in August 14, has transformed many lives across India. The PMJDY implementation has not only transformed the lives of the PMJDY account holders but also the lives of the Implementation Team across various participants.

          Read here about success stories in Public sector banks viz: Canara Bank, Central Bank of India, Dena Bank, IDBI Bank, State Bank of Bikaner and Jaipur, State Bank of India, State Bank of Patiala and Union Bank of India.

          Each bank has devoted considerable human capital to ensure the success of PMJDY scheme. Yes, there are other success stories which are hidden from the public.

          As usual there are two sides to a coin, Success and Failure. Success or Failure depends from which view point the person is representing.

          PMJDY is a success as can be seen from the below infographic.  

          The next step is to prepare the base to enable new participants to widen the accomplishments of PMJDY.

          The following 11 steps will introduce PMJDY to a new set of Players in the Indian Banking system.

          In the next 12-18 months, Payments Banks and Small Finance Banks will start rolling out their offerings to the Indian public.

          The 56 Regional Rural Banks to be grouped under Small Finance Banks for the purpose of MUDRA Loans.

          The District Central Cooperative Banks to be grouped under Payment Banks for the purpose of PMJDY Overdraft Accounts.

01)   Payment Banks should have the exclusive rights to open PMJDY accounts.

02) Payment banks should have the exclusive rights to open PMJDY Overdraft Accounts.

03) All new entrants to Banking system should open a Bank account with a Payment Bank.

04) All credits from Government schemes should only be to bank accounts with a Payment Bank.

05) Payment Banks should not issue Cheque Books to their account holders. Transactions should be through Digital mode or self-withdrawal slips.

06) PMJDY Overdraft facility should be granted automatically to all PMJDY accounts wherein Government Credits are received.

07) The concept of ‘Family Accounts’, to be introduced to minimise over-indebtedness

08) Account Number portability to be activated from Day 1

09) PMJDY Overdraft account should be tagged to a physical Payment Bank Branch which is within a radius of 10  kms from eligible account holder’s residence. As and when the account holder shifts his residence, the PMJDY OD Account should be auto-ported.

10)  Mandatory physical address verification of PMJDY OD Account holder through the centralised eKYC agency. The eKYC agency to tag the GPS coordinates of the account holder in the central repository.

11)  The PMJDY Overdraft Limit be increased to INR10,000/- to accounts which are of 3 years vintage.

Regulatory Backing:-

a)     Payment Banks to be allowed to open PMJDY Overdraft Accounts

b)    One of the key assessing factors for MUDRA Loans applicants is the successful track record in servicing their PMJDY Overdraft Account.       

Additional Reading Material:-

AMMA Loans

Introduction to New Small Finance Banks

Introduction to New Payment Banks

Monday, January 18, 2016

11 tips for hassle-free Lalbagh Flower show-Bengaluru experience

              The 203rd edition of the Semi-Annual Lalbagh Flower show is currently open to the public. 

              The show opened on 16th January 2016 and is open to public till 26th January 2016.
              11 tips for hassle-free Lalbagh Flower show-Bengaluru experience

01)   Maximum rush is expected on 19th January, 24th January and 26th January. On 19th January, 26th January School children will have free admission i.e no need to purchase entrance tickets. 24th January is Sunday i.e Holiday.

02)   The best time to visit the flower show is around 9 am, when the show opens for public and visitors have not yet started to come in.

03)   This is the best time to take a number of photos too.

04)   Plan car-pooling or two wheelers for minimal walking distance to the park main gates.

05)   Carry minimal luggage. Only water bottles, caps are to be preferred.

06)   Carry plenty of monetary change as the same will be required for quick payouts at the food counters, stalls etc

07)    Update your FB status, tweet your presence at the Lalbagh flower show, to attract more visitors to Lalbagh.

08)   Prefer not to litter and throw all the waste in the designated dust-bins only.

09)   After coming out of the park, walk/travel down to VV Puram-Eat Street to relish mounth-watering street food. The added attraction is the Avare Bele Mela 2016

10)   Prefer not to loiter near the flower stalls, let all the visitors view the multiple flower attractions.

11)   Prefer not to take photos for at least 3o minutes when in Lalbagh and instead just savour the magnificent atmosphere.

Additional reading material:

Lalbagh's Gate Collections Spike on Sunday

Saying it With Flowers

Saturday, December 12, 2015

Religious places welcome Donation through NPCI_IMPS (Immediate Payment System)

          In the last five years, NPCI_IMPS (Immediate Payment System) has spread its wings far and wide.    NPCI_IMPS has touched many lives and introduced new safe digital transactions channel to many a sceptic.

          The participants in NPCI_IMPS ecosystem have been on the search to widen the base. One such effort is introducing NPCI_IMPS channel for donations in Religious places.

          The main source of income for Religious places is the Donations received through its devotees. In the olden days, the donations were handed over to devotees who were travelling to the respective places.

In majority of the homes, a donation box was kept in the praying place and money dropped into it. As and when the family members or known members travelled to the chosen religious place, the total Collection in the Donation Box was handed over to that person, to deposit in the final donation box. This was a special donation apart from donations to nearby religious places.

          To enable devotees to donate from the comfort of their homes, religious places turned their attention to digital modes. The Standard digital modes i.e Credit/Debit cards were introduced. However, the main drawback of the Credit/Debit card mode was the need to tie up with a Payment Gate way and associated maintenance charges.

          The Electronic Clearing Debit Services is a good digital collection tool. However, ECS Debit is situated for repetitive donations.

          It has been observed that ‘On the Fly’, donations are the most effective. The donation should be channelled before the feel-good factor evaporates.
          This is where NPCI_IMPS fits in. The Religious place only needs to publish its Bank Account Number and IFS Code to its devotees and wait for the MAGIC to start.

          The Bank Account Number and IFS code can be made known through a wide variety of publicity channels viz:-
01) SMS
02)                  Pamphlets
03)                  Donation receipts
04)                  Website
05)                  Packing material

Through NPCI_IMPS Devotees can donate:-
a)    Anytime
b)    From anywhere-No geographical barriers
c)    Minimal additional charges
d)    As and when they reach a personal target

Yes, now you can go and motivate your chosen Religious Place to accept Donations via NPCI_IMPS.

In subsequent posts, details of Religious places accepting donations through NPCI_IMPS will be published.