| Branch Banking though being the most contemporary and traditional form of banking and practiced all across the globe is probably not the form of banking which will be the way forward to reach the millions of unreached spread across the vast geography of the Indian sub-continent. The lacunas of this form of banking more so in the context of FI target group are numerous, like setting up of infrastructure at difficult locations, huge cost implications and the biggest of all is driving the un-educated and ill-informed masses towards bank branches. Having brainstorming over all these problems, Union Bank of India has come out with the pioneering idea of branchless banking under Biometric Smart Card technology by appointing BC-BF (Business Correspondents / Business facilitators) to reach the unreached and taking banking services at the doorstep of the unreached.
At present the bank has appointed three BCs who provide end to end solution to carry out banking operations through branchless banking mode. The bank appointed BC along with its technology team with the help of enrollment stations comprising of a laptop, web camera and finger print capturing machine enrolls the beneficiary. The data recorded in computer includes Name, address, father's/husband's name, occupation, annual income, category etc. Thereafter, impressions of all the ten fingers are captured and stored in the computer.
On the basis of the data captured following simplified KYC norms the bank opens a No Frill S.B a/c. The data thus captured is stored in the Chip embedded in the card and the card thus produced for a particular beneficiary is handed over to him/her. The advantage of the card is that instead of pin number it recognizes and authenticates transaction based on the fingerprints of the account holder stored in the chip embedded in the card. The Biometric technology eliminates the probability of impersonation and embezzlement. It is safe, as it allows only the account holder on matching his fingerprints to carry out any transaction. This card has 15 slots, meaning thereby that the bank can offer 15 different financial products to the cardholder like savings, term deposit, recurring deposit, Loan product, Insurance etc.
Once the card is issued to the customer, it is ready for operations. The representative of the BC will move to the customer with the hand held device (Point of sale machine (POS) which is also works as storage device. The POS is activated only after the representative identifies himself with the agent card provided to him. Once the POS machine is ready for operation, the account holder can start transacting after completing his identification process - inserting his card, matching the fingerprints etc.
Depending on the nature of the transaction, the agent either receives the cash from or pays cash to the accountholder. After completion of the transaction; the POS generates a receipt to that effect in duplicate of which one copy is given to the account holder duly signed by the agent.
At the end of the day, the agent goes to a nearest telephone landline point and uploads the data to the CBS which is a shared server maintained by the BC with viewing rights to the bank. Once all the active POS machines are sunk, the technology provider will come to know about all the transactions carried out on POS machines. It can also track the missing POS if any.
After netting the debit-credit transactions BC will arrive at the exact amount to be deposited or withdrawn in/from the BCs account opened in our Nodal Branch/Base Branches. The authorized branch official of the Nodal Branch, who has the password protected authority of viewing the details of each transaction stored on the shared server will, after reconciling with the TID, either debits or credits the BC's account and credits or debits to the subsidiary head 'SB Smart Card' opened for a particular project. Thus, the deposits /withdrawals get integrated with the Bank's SB portfolio.
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