Taking Financial Services to Grassroots

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Dr Dinesh Tyagi

 Given the vast expanse and diversity of the land that India is, the goal of achieving financial inclusion looks an uphill task, but not for CSC Chief Executive Dr Dinesh Tyagi, who knows how to go about it. Excerpts from an interview with Nayana Singh of Elets News Network (ENN)

Give us an overview of the work done by CSC for empowering the rural masses.
The Common Service Centres or CSC has been set up to enable delivery of services in the space of both government and private businesses. The objective of the scheme is to make accessible these services to the people in their neighbourhood. Across the country, there are about 1,30,000 Centres and they are vibrant enough to deliver a large number of services in both government and private businesses space. So, the mandate that was assigned to us by the government to empower citizens in terms of information and skills by availing these services has been achieved to a great extent.

What kind of activities is CSC involved in?
The CSC has a complete framework ready now to work towards attaining the goal of Financial Inclusion. That is, now the Centres can be engaged as business correspondents (BCs) for banks, and we have already signed agreements with all the 26 PSU banks.

Across the country we have a CSC network… In all, there are about 12,000 such Centers that act as BCs, and we are in the process of having around 25,000 such Centres by the end of this year. They will facilitate account opening, deposits and remittances. In addition to these activities, some of the banks are also allowing business facilitation. We find that the general acceptance of BCs in the CSC framework has been fairly high.

This has been a foolproof arrangement, as since its inception, no case of fraud has been reported from any part of India. It is a very low-cost model and people have, by and large, shown faith in this system. And the only cost input is that of `4,000 for buying a biometric machine, and it becomes operational.

Is the CSC also working towards insurance facilitation?
Although insurance facilitation is a crucial aspect of financial inclusion, its penetration in India is very low…especially in the rural areas where it is only about 3 percent. So, there was a need for a framework in the rural areas. The Insurance Regulatory and Development Authority (IRDA) has issued some guidelines, following which the CSC could act as brokers. Soon our Centres will be authorized to act as brokers. We will deliver services of various insurance companies, both in life and nonlife segments. We are in the process of signing agreement with various companies and enabling the process to be put in place. This will be a unique system, revolutionary in terms of both time and delivery, as the insurance products would become accessible in the rural neighbourhood.

It will be a completely paperless mechanism wherein a citizen’s data would be captured, and once the payment is made, the papers would be immediately handed back to him. It will also help in overall saving and promoting the reach of services to the communities in far-flung areas. At present, we are collecting premiums for both SBI and LIC products. In the days to come, we might become one-stop shop for people’s insurance needs. For collecting premiums for LIC, the footfalls are fairly high. For the insurance part, we are asking candidates to appear for an examination and then they would be selected. All of them shall be approved by the IRDA and then deliver services and sell the products of insurance companies, which will help take insurance to rural India. Although the LIC commission structure is not very good, it raises the footfalls.

Similarly, the third part of FI is pension. In India, we do not have a system to provide pension in rural areas. That being the reason, now CSC has become an aggregator of rural pensions, and we have started the PFRDA initiative with an initial pension scheme. So far, we have 10,000 of these beneficiaries, but we want to cover about a lakh or half-a-million by the end of the year. We are strenuously trying to have a structure for them, so that they can avail pensions more easily.

In short, the CSC is on way to becoming the fulcrum for real financial inclusion in rural India. We shall cater to the needs of people both in terms of banking & insurance and pension.

“CSC mechanism has been a foolproof arrangement, as since its inception, no case of fraud has been reported from any part of India. It is a very low-cost model and people have, by and large, reposed faith in this system” 

CSC has been involved in many educational activities like e-literacy and others. Brief us on the nature of these programmes.
The other focal point of CSC is to impart education to empower people…empowering them to learn. We have signed agreements with the National Institute of Open Schooling (NIOS), and the National Institute of Electronics and Information Technology (NIELIT). Our centers can do facilitation work for the NIOS students appearing for various examinations and extend help at various levels. This will also be a kind of social service to make people aware of the importance of attending schools and minimizing dropout rates. NIOS is a powerful tool that can drive rural India towards full literacy. NIELIT is associated with IT education. We have also signed agreements with some other universities.

You have also tied up with NABARD for promoting financial inclusion. Can you elaborate it?
NABARD has assigned to us the states of MP and Chhattisgarh for financial inclusion promotion-related activities, which gels well with the mandate of financial literacy. This could be a game changer for us, because it will increase footfalls. We have also tied up with the Department of Company Affairs, SEBI and SIDBI for similar activities.

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