As the implementing agency for the CSC scheme in the state, J&K Bank has adopted a number of innovative practices and used technology to reach beneficiaries

Sajad Wani, Executive (IT), J&K Bank

We are one of the leading banks in J&K and are operating 650 branches across India. We have  leveraged our network and the Common Service Centres (CSCs), which are called ‘Khidmat  Centres’ in Jammu and Kashmir, to take financial inclusion across the state. As a premium  bank in the state with little competition, we also took financial inclusion as our social  responsibility.

Khidmat Centres

In February 2009, the CSC project was entrusted to J&K Bank for implementation, on the  recommendation of the state government. As we started this venture before any mandate for  financial inclusion was brought out by the regulatory authorities, we planned for financial  services as the key activity at these centers for the villages. Under the CSC scheme, our bank  has to have 109 CSCs set up in the state and so we began on our journey. Every six villages  were to have a CSC, and with 6,600 villages in the state we have 1109 CSCs, and so clustering  of the villages was done in order to have evenly scattered CSCs across the state.  This was followed by the selection of Village Level Entrepreneurs (VLEs), followed by  identification and development of the sites followed by standardised branding of the CSCs  across the state. The infrastructure at the CSCs in J&K includes laptop, printer, connectivity  (VSAT), furniture, digital camera and power back-up. 650 such centers are operational.

Each smart card has the ability to have 15 accounts and track previous transactions. The  accounts includes saving bank account, no frills account, MNREGA and social security accounts and loans

We were given a target of 1260 unbanked villages i.e. 535 SLBC villages and 725 non SLBC  villages to be covered by March 31, 2013. As of now we have engaged 423 VLEs as BCs to  provide ICT for financial services to villages in the state. In the state, 805 unbanked villages will be covered by 423 VLEs.

One of the services offered at these centers included J&K Bank Loan Documentation Product.  This was devised considering the many legal documents that we required for loans. For  financial inclusion, we took a special permission to include the VLEs operating the CSCs as  Business Correspondents (BC), apart from these we have educational services, utility services and others.

The major challenge when we started the project was to finance the centers, and it was the  VLE who had to bear the costs of setting-up and running the centre successfully. Our bank  took a special initiative and devised a unique product for financing the CSCs and is named as  the J&K CSC Finance. In this product, `1.58 lakh is given as a loan to VLE to set up the centre.

Technology platform

For the technology platform we have tied-up with FINO (Financial Information Network and  Operations Ltd), and they provide us smart cards that have biometric authenticated cards  provided to the customers – that are suitable for the citizens residing in remote villages as it  avoids al the paperwork that is required for either depositing or withdrawal of cash from the  Khidmat Centres. Each smart card has the ability to have 15 accounts and track previous transactions. The accounts includes saving bank account, no frills account, MNREGA and social security accounts and loans. The major CSCs earning are coming from the financial inclusion schemes and we are looking forward to a wider reach and penetration of our services  to the unbanked in the state.

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