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.
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.
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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