mor-icici-india-EFfD (3)
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Transcript of mor-icici-india-EFfD (3)
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e-Finance for Development- An Indian Perspective
Monterrey, Mexico March 19, 2002
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Agenda
Development Banking in IndiaICICI - Development frameworkSectoral initiativesLegal structure in IndiaGoing Forward
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Development Banking in India
Priority Sector in India characterised byLow capitalisation and limited assetsGeographical diversity and high mortalityPoor access to capital markets
Non accessibility to credit historyCash intensity in transactionsCyclical fund requirement and high commodity riskInformal sector and uncorporatised
High dependence on Govt. support/ subsidiesPoor financial disclosure on account of tax issuesHigh risk perception has led to high borrowing costs
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Agenda
Development Banking in IndiaICICI - Development frameworkSectoral initiativesLegal structure in IndiaGoing Forward
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ICICI Group - Developmentframework
Product lead approach for each sectorSmall and Medium Enterprise (SME)Agriculture and Micro FinanceCommunity Banking
Internet and Electronic BankingProduct and delivery technology dependentBranch remote approachCentral processing centres enable optimummonitoring
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Agenda
Development Banking in Indiae-initiatives in ICICI GroupSectoral initiativesLegal structure in IndiaGoing Forward
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SME - Strategic framework
Concerns Improve Quality Exit weak accounts Improve yields Reprice on RaRoC
benchmark Reduce delivery cost Web / call centre based
delivery
Aspirations Non capital intensive
growth Liability/ fee income Cash management
product Innovative delivery Smart / Credit cards Web / call centre
delivery Service relationships Banker for services
rather than credit
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SME - Service & DeliveryInformationLogging requests
Call centre
Customer
Branch
ATM
For alltransactionsexcept highvalue cash
Drop box point
High value cashtransactions
Handles exceptionsCross sellsMonitors accounts
Account/ Relationshipmanager
Trade financefactory
Credit factory
RPC/CPC
Processes all
pure creditrelated requests
Processes alltrade related
requests for acity
Providesupportbackbone forall transactionrequestsServicesdoorstepdeliveries
InformationLoggingrequests
InternetProcessing centres*
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Online Products
e-banking in ICICI
ICICI Marketsonline FX, Debt,
SME Portal
Corporate Infinityonline transfer/settlement system
Bill JunctionUtility bill payments
Business Multiplierweb interfaceICICI Direct and ICICI
Select
Pay Sealelectronic paymentsystem
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Agri - Micro-credit initiatives
Innovative structure for micro-credit in rural areasOvercome the reach problemLower administration costs
Channels for delivering micro-credit
Sugar companiesSeed producersInput companiesNGOs and micro credit institutions
These channels help build volumes, reduce costs andmonitor credit risk
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FSC provides one stop solution to the farmerAgri extension supportInputs and other servicesCredit
Market linkageRural infrastructure
These FSCs are promoted by Agri Input suppliers ,and avoids duplication of efforts by different players
Agri - Farmer Service Centres (FSCs)
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Smart card solution for FSCs
Bank Account/Credit History
Output Sale
Collect Money
Farmer Service Center
Credit Debit e-purse
MerchantStoreInput
Online update of Bank accounts
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Smart Cards An alternative
Difficulty in rural bankingManagement of Cash
Cost of idle cashCost of cash handling infrastructure
Geographical spreadsSolutions through
Elimination/ reduction of cash handlingInnovation of low cost delivery channels
Smart Card - an ideal vehicle
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Smart Cards at ICICI
Smart Cards launched in October 2000Infosys Campus in BangaloreManipal Academy of Higher Education (MAHE)
New Initiatives
Satyam Smart CardHPCL Petro CardWork on multiple application card - Debit, Credit, E-Purse and Loyalty
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Social Initiatives - ICICIcommunities
Give Online: On-line donation channelRetail donors can donate to specific initiatives acrossIndia100% of donations reach the initiative
Prompt feedback on utilisation of grantRs. 11.5 million towards Gujarat Earthquake
Shop the Cause: On-line shopping mallOver 100 exquisite hand crafted products available
The only facility of its kind available tonon-profits in India
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Innovations in Delivery Channels
Sustainable Access for Rural India (SARI) projectPartners: MIT Media Labs, Harvard University, IIT-Chennai, I-Gyan, DHAN Foundation, ICICI LtdProviding reliable Internet access through Kiosks in
rural Madurai using corDECT WiLL100 kiosks managed by entrepreneurs to be set-upProviding e-governance, communication andinformation services
Possibility of delivering banking services throughInternet kiosks being explored
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Internet Banking
First Bank in India to launch website - 1996First Bank in India to launch Internet Banking - 1997First Bank in India to launch online bill payment-1999
Only Bank in India with million online customersMonthly average transactions per online customer-7
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Internet Banking - Statistics
117% increase in transaction volume since April2001More than 1 million contacts in February 2002Coverage across 100 locations in the country
103% increase in internet banking registrants since April 01 84% increase in transactions since April 01
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Channel Usage
Apr 2001
Branch
41%
ATM51%
Internet4%
CallCentre
4%
Jan 2002
Cops7%
Branch35%
Internet5%
ATM47%
Call
Centre6%
Br anch ATM Cal l Cent r es Net COPS
Jan-02 18% 82%
Apr-01 19% 81%
Jan-02 41% 33% 9% 7% 10%Apr-01 50% 39% 6% 5% Nil
Cash Tr ansact ion s
Non Cash Transact ion s
Nil
Nil
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Retail Initiatives - Utility Payments
First bank to introduce this service in IndiaTie-ups with 50 utilities for online paymentsTalks with state governments/ municipalities tofacilitate e-governance
AP Govt. initiative - eSevaonlineVizag Municipality - Saukaryam
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Agenda
Development Banking in Indiae-initiatives in ICICI GroupSectoral initiativesLegal structure in IndiaGoing Forward
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e-banking related laws
e-banking governed by:Information Technology (IT) Act, 2000Internet Banking guidelines of the Central Bank
India is the 2nd country in Asia to initiate
technology related acte-banking encouraged through:
Focussed legislationAccess to IT skills, computers and incentives to ISPs
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Central Bank guidelines
Bank to have security policy approved by Board ofDirectorsIntroduction of logical access control systemsSecurity buffers between bank system and internet
Products to be compliant with domestic foreignexchange regulationsSetting of inter bank payment gatewayMandatory disclosure of risks in internet baseddealings
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Agenda
Development Banking in Indiae-initiatives in ICICI GroupSectoral initiativesLegal structure in IndiaGoing Forward
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Creating the e wave - Statutory
Legal validity for e transactionConsumer ProtectionNegotiable Instrument ActAcceptance of electronic based document
Full Account ConvertibilityExchange Control LawsStrengthening the Intellectual Property Laws
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Creating the e wave - Infrastructure
Encourage internet/ e usage Voice over InternetImprovement in telecom infrastructureTax incentives for internet based transaction
Incentive for electronic settlement
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Creating the e wave - Banking
Allowing appointment of third parties for bankingAllowing variable interest rates on depositsModifications in service area approach toencourage competition in the rural areas
Undertaking specific initiatives to provide animpetus to rural banking
Computerisation of operations of banks especiallythe rural operations
Land Records ComputerisationNetworking of Post Offices
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Creating the e wave - Electronic
Standards for smart cardsGuidelines on smart card interoperabilityChanges in Central Bank guidelines
Eligibility of clients
Loading of valueProvision of written reports and receipts
Govt. incentives to stakeholdersGovt. encouragement for ATMs/ POS infrastructureterminals
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e-enabling the economy Thank You !!!