How Pradhan Mantri Jan Dhan Yojana pans out

Even after 68 years of independence, a large section of the Indian population still remains unbanked. However, in the recent years the government and the Reserve Bank of India has been pushing the concept of financial inclusion. August 28, 2015 marked the a year of completion of the Pradhan Mantri Jan Dhan Yojana has been part of this journey as it worked with several banks to open bank accounts under the yojana.

With business relationships spanning with 19 public sector banks covering 20,000 villages and a network of more than 9,000 business correspondents, HCL Infotech has successfully delivered state-of-the-art technology-enabled solutions that have enabled more than 5 mn account enrolments across 25 states in India. Dataquest spoke to Avinash Bector, Head - Financial Inclusion, HCL Infotech to know more about the Jan Dhan Yojana. Excerpts

Avinash Bector, Head - Financial Inclusion, HCL Infotech

How do you see the role of technology in taking banking services to every Indian?

Today technology is a key enabler for financial inclusion, bringing the excluded population
of the country under purview of banking services. Technology disruptions such as assisted ATMs, mobile technology, mobile wallets, etc, have helped expand the reach of banking to the grassroot level. Further, eCommerce is poised to play an extremely important role in changing the mindset of people and broadening the scope of financial inclusion. Customers want simple products with easy access and efficient service, and technology has the power to make that happen.

Since HCL has been a part of the Pradhan Mantri Jandhan Yojna, please spill more details about your role in it?

Financial inclusion is the foremost agenda for RBI. Recently, RBI Governor Raghuram Rajan urged all to use technology to achieve financial inclusion. Technology is helping to increase access by capturing customers’pulse, collate data, support analytics, and result in affordable excellence.

HCL Infotech with its expertise in technology is fuelling the growth of financial inclusion across the country. Our technology equips the banks to understand the profile of the customer and design simpler products, ie, insurance, basic bank account, payment of remittances, etc, and reaching the rural and remote areas.

How many accounts were opened through your drive? What kind of challenges did you face to bring people into the banking fold?

We are vigorously engaged in supporting the banks to penetrate deeper into the rural shores of the country. Beginning in 1990, we have already made more than 71 lakh enrolments and have enabled more than 115 lakh transactions across the country. We have an engaging relationship with all the leading national and regional rural banks. HCL Infosystems has maintained a wide network of fully-trained business correspondents all around the country. This helps us to support the banks by providing required manpower and technological support at the grass-root level, even during emergency situations.

Some of the challenges that we have faced in our endeavor to bring financial inclusion are:
Poor network connectivity, especially in the rural areas. It is the biggest challenge for bringing innovative technology solutions to the underbanked population. However, this issue is being resolved to some extent by government initiatives like National Optical Fiber Network. Both data and voice usage have increased, making it feasible to access
remote areas.

The vast majority of our population still lacks basic financial literacy, a prerequisite for effective financial inclusion. The unbanked population needs to understand how institutional banking works to make informed decisions. However, things are now changing for the better with new initiative by the government to improve financial literacy. As financial literacy spreads, we will see a manifold increase in the usage of banking services.

What are the technology solutions that can help the banking sector to increase their presence?

We believe that the foremost priority for banks (including all regional rural banks) should be to adopt Core Banking Solution (CBS) across all remote rural areas. This has to be supplemented with multi-channel service offerings, ie, handheld devices, mobiles, cards, micro ATMs, branches, kiosks, etc. Another imperative technological requirement is to seamlessly integrate all such transactions carried out through any front-end device with the banks’ CBS.

What does this mean to the Indians and the economy overall?

The main objective of setting up small banks in the remote rural areas is to generate greater financial inclusion, secure savings, and supply credit to small and micro businesses. This will have a huge positive impact on the hitherto financially excluded population, bringing them closer to the social security benefits introduced by the government.