State Bank of India which has the largest branch network in the country invites eligible individuals/ NGOs/Companies (other than NBFCs)/ other entities to join hands with us to take banking to all. Some of the important features of our BC Model are given below.
1. Entities eligible to be appointed as BC
NGOs/ MFIs set up under Indian Societies/ Trust Acts.(Care: excluding NBFC)
Societies registered under mutually aided co-op. societies (MACs) Act or the Coop. Acts of States.
Section 25 companies.
Post Offices.
Retired Bank employees
Ex-Service men.
Retired Govt. Employees.
Individual kirana/ medical/fair price shop owners.
Individual Public Call Office (PCO) operators.
Agents of small savings schemes of Government of India/ Insurance Companies.
Individual who own petrol pumps.
Retired teachers.
Authorized functionaries of well run Self Help Groups (SHGs) linked to banks.
Individual member of Farmers Clubs.
Individual operators of Rural Multipurpose kiosks/ Village Knowledge Centres
Individuals/ proprietors/ owners who manage Agri Clinics/ Agri Business Centres.
Retired Post Masters.
Individuals such as auto dealers, tractor dealers and FMCG stockists.
Insurance agents including of private insurance companies (IRDA certified) and postal agents.
Individuals operating Common Services Centres (CSCs) established by Service Centre Agencies (SCAs) under the National e-Governance Plan (NeGP).
For profit companies
Any other individual considered suitable by the selection committee.
2. Nature of Services to be rendered by the BC and its outlets:
The BC arrangement essentially means enrolling customers and enabling the transactions of the customers at the Customer Service Points (CSPs) besides sourcing various deposit and loan products for the Bank as a Business Facilitator. The outlets of the BCs will need to undertake BC activity through any one of the different technologies adopted by the Bank. These can be Card Technology, Kiosk Banking Technology and the Cell phone messaging Technology.
As far as the Card Technology is concerned, we have two different vendors and if the BC entity would like to undertake BC activity, it can choose either of these technologies, where the processes, the front end hand held devices, and the commercials are slightly different from each other.
Here either a Smart Card, i.e., a card with a Chip, (which is a contact or a contact less card) or a Chip-less or just a plastic card may be used for transacting. These cards work with biometric identification. The transactions can be either online or offline also.
In this card technology, the BCs can enroll customers and open No-Frills Account in the form of SBI Tiny Savings Bank and SBI Tiny Recurring Deposit Accounts, undertake deposit and withdrawal transactions (in cash) in these two accounts through the technology provided by the Bank/Technology vendors concerned, for the customers thus enrolled. The Savings Bank account can also be opened as a Savings Bank cum Overdraft Account. After six months of operation of the account as a Savings Bank account the customer would be eligible for an overdraft also.
In Kiosk banking, using a Finger Print capturing device supplied by the Bank and using the internet connectivity, a BC can enroll customers and open No Frills Savings Bank Account. Other products are likely to be added soon. The transactions are always online in Kiosk Banking.
In both the Card Technology and Kiosk Banking Technology, remittances from one account to any other account in the Bank are permitted.
In the Cell phone messaging technology anyone with a mobile phone can open the No Frills Accounts. This is not biometric enabled and has different security features. However, this technology is not right-away available for BCs and may be available after some time.
Further, we consider every BC as BF plus, (BF = Business Facilitator); that is every BC is expected to source business outside the technology enabled No Frills Account. It is also seen from our various pilots that to make the BC activity viable, BF activity also needs to be undertaken by the outlets of the BC. For this a few simple banking products will be initially selected and training on the features of the products and Know Your Customer (KYC) guidelines of the Reserve Bank of India (RBI) will be given by the Bank.
For such BF activity, the outlet operators would need to identify customers, motivate and market the banks liability and asset products to such customers. Also help the customer in filling the loan application/account opening forms, obtain photographs, documents for complying with the KYC guidelines of the RBI, documents and papers for sanction of the loans and direct the customers to the link branches concerned with all papers.
Cash will be accepted/ paid only through technology in the No Frills Accounts and for all other accounts i.e., only the CSP of the BC can accept cash / make cash payments. The BF is not permitted to handle cash. Customers sourced by the BF will transact at the concerned Branch only.
The BC will also need to participate in the Financial Literacy/ Awareness efforts of the Bank.
4. Security Deposit: In terms of our Banks Policy, the BC would be required to keep security deposit equivalent to a fixed percentage of the expected business volumes of a year.
5. BC Agreement: A copy of our standard BC agreement will be forwarded to you separately for your information and reference.
6. Location of the Pilots: Once the BC arrangement is finalized, a pilot could commence in selected districts/States. Based on a review of the performance this can expand by mutual consultation. We would also be visiting a few of the proposed outlets before launching the arrangement.
7. Once the CSPs are identified, the BC is required to forward to us the list of CSPs on a standard format to enable us to send it our Circle concerned for verification and mapping of our link branches. As you are aware, every CSP outlet has to be linked to a Branch which is at a distance of less than 30 km in Rural/ Semi urban centres. Once the CSPs are mapped and codes allotted, the BC can commence activities.
8. The BC will have the option of choosing one of the technologies being offered by the Bank. The BC is required to invest in the hardware/necessary equipment required for undertaking BC activities. Presently, the Bank has Hand Held Point of Service, Cell Phone messaging based and Internet based SBI Kiosk technologies. A coordination document in respect of the technology vendors will also be shared with the BCs, wherein the roles and responsibilities of the BC, Technology vendor and the Bank would be delineated.
9. Cash Management: For the BC transactions the BC would be required to open a Current Account called the Settlement Account and keep it pre-funded. In terms of the technology we are using, whenever a customer comes and deposits cash into his account at the BC outlets, the customers account will be credited and the BCs Settlement account will be debited. Similarly whenever a customer withdraws money from the outlets, his account will be debited and the BCs Settlement will be credited. Therefore, in respect of BC operations undertaken by the BC the Cash Management, i.e. maintaining sufficient pre-funded balance in the Settlement account, and sufficient cash at the outlets and movement of the funds between the outlets and the Settlement Account are required to be taken care of. Plus, the cash at the outlet being the BCs cash, the risk and costs associated with this also will have to be borne by the BC.
12. Selection of agents/sub-agents, Due Diligence: Selection of agents/sub-agents will be done in terms of guidelines issued by RBI from time to time.
13. Banners and Stationery: Bank will supply with suitable banners/sign boards as well as the stationery required for BC operations.
14. Commission Payable to BC: The rates of commission payable to the BC will be advised after the completion of selection process.
15. The BC will need to draw up a Business Continuity Plan to ensure that the customers enrolled are served without any disruption.
16. The BC/ BF outlet would be subject to Inspection & Audit by Bank official/ RBI/ Other Statutory Auditor.
We would request you to revert to us in case you need any more information or clarification on the above points or on any other areas concerning BC/BF arrangement. You may please feel free to call the Dy. General Manager (Rural Business- Alliances)
SBI Corporate Centre, Mumbai at
022-2274-2860 or 022-2274-0991/0992/0999.
SBI Business CorrespondentRBI/2013-14/653
DBOD.No.BAPD.BC.122/22.01.009/2013-14
June 24, 2014
All Domestic Scheduled Commercial Banks
(excluding RRBs)
Dear Sir /Madam
Financial Inclusion by Extension of Banking Services
–
Use of Business Correspondents
Use of Business Correspondents
Please refer to paragraph 26 of the First Bi-monthly Monetary Policy Statement, 2014-15 announced on April 1, 2014 which stated that “On financial inclusion, the fourth pillar, the recommendations of the Mor Committee on accelerating the flow of credit to those at the bottom of the pyramid and enlargement of catchment area of the Business Correspondents (BCs), including through possible inclusion of new entities as BCs, are under examination”.
2. Taking into account the recommendations of the Mor Committee, the existing guidelines on appointment of Business Correspondents (BCs) have been reviewed as under:
i) Eligible individuals/entities
As per extant instructions, Non-banking Finance Companies (NBFCs) are not allowed to be appointed as Business Correspondents (BCs) by banks. It has been decided that banks will be permitted to engage non-deposit taking NBFCs (NBFCs-ND) as BCs, subject to the following conditions:
a) It should be ensured that there is no comingling of bank funds and those of the NBFC-ND appointed as BC.
b) There should be a specific contractual arrangement between the bank and the NBFC-ND to ensure that all possible conflicts of interest are adequately taken care of.
c) Banks should ensure that the NBFC-ND does not adopt any restrictive practice such as offering savings or remittance functions only to its own customers and forced bundling of services offered by the NBFC-ND and the bank does not take place.
ii) Distance criteria
In terms of our circular DBOD No BL BC 43/22.01.009/2010-11 dated September 28, 2010, with a view to ensuring adequate supervision over the operations and activities of the retail outlet/sub-agent of BCs by banks, every retail outlet/sub-agent of BC is required to be attached to and be under the oversight of a specific bank branch designated as the base branch and the distance between the place of business of a retail outlet/sub-agent of BC and the base branch should ordinarily not exceed 30 kms in rural, semi-urban and urban areas and 5 kms in metropolitan centres. In case there is a need to relax the distance criterion, the District Consultative Committee (DCC)/State level Bankers Committee (SLBC) could consider and approve relaxation on merits in respect of under-banked areas etc. With a view to providing operational flexibility to banks and in view of the technological developments in the banking sector, it has been decided to remove the stipulation regarding distance criteria. The banks should, however, while formulating the Board approved policy for engaging BCs, keep in mind the objectives of adequate oversight of the BCs as well as provision of services to customers while deciding how to modify extant distance criteria.
3. Banks may continue to take measures to address possible reputational risks arising out of appointment and functioning of BCs.
4. All other instructions regarding the BC model will remain unchanged.
Yours faithfully,
(Lily Vadera)
Chief General Manager
~DELHI ~Copy of MOU between BC and PNB
L 650108
e Memorandum of Understanding between the Unique Identification Authority of India and Punjab National Bank for implementation of UIO Project e This Memorandum of Understanding (MoU) has been executed at New Delhi on the so" jpay of July 2010 between
the Unique Identification Authority of India having its office at Tower 11, Jeevan Bharati Building, Connaught Circus, New Delhi 110001 (hereinafter referred to as "UIDAI") •
AND ~
iunjab National Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 having its Head Office at 7, Bhikaiji Cama place New Delhi (hereinafter referred to as 'Registrar).
IDAI and the registrars shall be collectively referred to as "Parties".
reamble Whereas, Government of India has set up Unique Identification Authority of India hereinafter "UIDAI") with the mandate to issue Unique Identification Numbers hereinafter "UID") to all residents of India (hereinafter "UID Project")
rv'hereas Punjab National Bank a nationalized bank having large customer base and would .be in a position to identify its account holders for facilitating issuance of UID by UIDAI. 1 1,
Whereas, in order to implement the UID project Punjab National Bank is entering into this MoU with the UIDAI.
Whereas Punjab National Bank has set up a Core Team to oversee the implementation of the UID project among the constituents (account holders, nominees and others) of Punjab National Bank.
Whereas this MoU shall come into effect from July 30, 2010
Definitions: Unless the Context requires otherwise: Registrars are departments or agencies of the State Government! Union Territory, public sector undertakings and other agencies and organizations, who in normal course of implementation of some of their programs, activities or operations interact with residents. Examples of such Registrars are Rural Development Department (for NREGS)OR Civil Supplies and Consumer Affairs Department (for TOPDS), Insurance Companies and Banks
Enrolling Agencies are entities hired by Registrars to perform enrolment functions on behalf of the Registrar(s).
UID Project and the scope of the MoU
1. The UIDAI has the mandate from the Government of India to issue Unique Identification Numbers (UID) to residents of India based on demographic and biometric data of the individual. UIDAI will partner with Government and other agencies leveraging their existing infrastructure in order to implement the UID Project. These agencies will be called the Registrars of the UIDAI.
2. UIDAI will set standards and processes for enrolment to be uniformly followed by all Registrars and Enrolling Agencies. The UIDAI will issue UIDs after checking that the resident applying for UID does not already have a record and a UID number in the UID database (de-duplication). In addition, the UIDAI will provide online, real- time Authentication service.
3. This MoU between the UIDAI and Punjab National Bank sets out below, the general and broad-based intentions of both parties for collaboration and as an umbrella understanding for facilitation of subsequent agreements and documents relevant for the implementation of the UID project by the registrar.
4. The UID project will be implemented in a phased manner; the UIDAI will be conducting proof of concept studies and pilots to test the working of the technology and process of enrolment, subsequent to the Pilots the full roll out of
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the UID project will take place. The registrar will co-operate and actively participate in each of these phrases as required by UIDAI.
5. In the interest of clarity and to reduce ambiguity, the UIDAI shall execute additional agreements and documents to capture details about implementation of UID Project with the registrar.
6. UIDAI shall a) Develop and prescribe standards for recording data fields, data verification and biometric fields. b) Prescribe a process for enrolment of residents; this will include among other things the process for collection of biometric data. c) Provide/ prescribe the software that will be used for the enrolment of people into the UID database in order to issue the UID number. d) De-duplicate the database of the residents on the basis of the Demographic and Biometric data and issue UID numbers to only those, whose uniqueness of identity has been established and after ensuring that the person has not enrolled in the UID database before. e) Issue a letter communicating the UID number directly to the person, who has been allotted UID number after de-duplication, UIDAI will also communicate the UID number electronically with the Registrar in UIDAI prescribed format. f) Authenticate the identity of a person with a UID number as per the protocols prescribed by the UIDAI. g) Prescribe protocols for record keeping and maintenance of the information collected for the issuance of a UID number. h) Prescribe protocols for transmission of the data collected for de-duplication. i) Prescribe protocols to ensure the confidentiality, privacy and security of data. j) Prescribe limits for fees that could be charted for issuing a UID number. k) Prescribe protocols for spreading and communicating the message, content and intent of the UID project. Since the UIDAI logo and brand name are properties of the UIDAI, the UIDAI will prescribe the manner and limits of the use of UIDAI logo, brand name, brand design and other communication and awareness materials. I) Prescribe other protocols, processes and standards and that the UIDAI may deem necessary for the implementation ofthe UID project. m) Conduct periodic audit ofthe enrolment process and to this end shall have the authority to visit and inspect offices of the Registrar and Enrolling Agencies. Such audits are necessary to ensure the integrity of the enrolment process and to ensure uniformity across the country. n) Prescribe mechanisms for resolution of grievances that the residents may have during enrolment and authentication.
7. The registrar shall:
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a) Co-operate and collaborate with the UIDAI in conducting proof of concept (PoC) studies, pilots to test the working of the technology and process of enrolment into the UID database and subsequently, full roll out of the UID project. b) Follow the criteria and processes for appointment of enrolling agencies prescribed by the UIDAI. c) Put in place an institutional mechanism to effectively oversee and monitor the implementation of the UID project in general and monitor specifically Enrolling Agencies. d) Provide required financial and other resources to carry out the enrolment processes as per the phasing decided by UIDAI. e) Cooperate and collaborate with and provide all assistance and support to the Deputy Director Generals (DDGs) concerned of the UIDAI to effectively implement the UID project with Punjab National Bank f) Provide logistic and liaison support to the staff and representatives of UIDAI when they visit the Enrolling agencies implementing the UID Project. g) Work with the UIDAI to resolve difficulties faced on the ground in the implementation ofthe UID project.
8. The following is an indicative list of the obligations of Punjab National Bank as Registrar. These will be elaborated and detailed additional agreements and documents as deemed necessary by UIDAI. Notwithstanding anything contained in this clause, this list can be expanded or elaborated as required to ensure integrity and uniformity of enrolment into the UID database. In order to implement the UID project the Registrars shall:
a) Either do the enrolment directly or through Enrolment Agencies, who shall be identified and appointed by the Registrars (UIDAI may recommend certain criteria to be fulfilled to be an Enrolment Agency). The Enrolment Agencies will be working on behalf of the Registrars and will be accountable to the Registrars; therefore, they should follow all the standards, protocols, processes laid down by the UIDAI to implement the UID project. Registrars must ensure compliance by the Enrolling Agencies of the standards, protocols, processes laid down by the UIDAI on a continuous basis. b) Follow the standards for data fields, data verification and biometric fields prescribed by the UIDAI. c) Follow the process for enrolment of residents; this will include among other things the process for collection of biometric data prescribed by the UIDAI. d) Use the software developed by the UIDAI for the enrolment of people into the UID database for the issuance of the UID number. e) Use only those devices and IT systems whose specifications have been approved by the UIDAI.
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h) Follow the confidentiality,. privacy and security protocols prescribed by the UIDAI. i) Have the option to charge a fee for enrolment into the UID database and issuance of UID number but the fees charged from residents cannot be higher than the maximum amount prescribed by the UIDAI in this regard. j) Follow protocols prescribed by the UIDAI for spreading and communicating the message, content and intent of the UID project. Since the UID logo and brand name are properties of the UIDAI, the UIDAI will prescribe the manner and limits of the use of UIDAI logo, brand name, brand design and other communication and awareness materials. k) Follow protocols, processes and standards prescribed by the UIDAI for the implementation of the UID project. I) Allow the UIDAI to conduct periodic audit of the enrolment process and to visit and inspect the offices and records of the Registrar and Enrolment Agencies and another place the UIDAI or its empowered agency may deem necessary for the purpose. m) Submit periodic reports of enrolment to the UIDAI in the form and manner prescribed by the UIDAI. n) Provide logistic and liaison support to the staff and agents of UIDAI when they visit the Registrar and Enrolling agencies implementing the UID project. 0) Provide information related to the UID project to the UIDAI from time to time as requested by the UIDAI. p) Work with the UIDAI to resolve difficulties faced on the ground in the implementation of the UID project. q) Follow the process set out by the UIDAI for resolution of difficulties and conflict regarding matters concerning the UID project.
Miscellaneous:
9. At the time of collecting data for the purpose of the UIDAI, the Registrar may collect data from the resident that is required for the purpose of their business/service operations.
10. In situations where the processes and standards for enrolment set by the UIDAI are not followed or are violated (willfully or otherwise) by the Registrar and/or an Enrolling Agency, the UIDAI shall make reasonable attempts to discuss and attempts to resolve difficulties with the Registrar. Pursuant to which, if the recommendations of the UIDAI are not implemented and the matter settled to the satisfaction of both the parties, the UIDAI shall have the option to de-register 5 1·
the concerned Registrar and/or demand replacement of a concerned Enrolment agency as the case may be.
11. Any provision of this MoU may be amended to waived if, and only if, such amendment or waiver is evidenced by a written instrument signed by duly authorized representatives of the Parties, or in the case of a waiver, by the Party against whom the waiver is to be effective.
IN WITNESS WHEREOF, the undersigned have executed this MoU, in duplicate, as of the date set forth above.
For Pun] b Nation
J (Signatures) Name: M V Tanksale signation: Executive Director
For Unique Identification Authority of India t(l-t ~ (Signatures)) • Name: Ashok Pal Singb. Designation: Deputy Director General
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https://www.pnbindia.in/En/ui/FinancialInclusionNewInitiatives.aspx
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