THE ABC MODEL OF BANKING - PART II

Our first article in this series wherein we had proposed a radically new model of banking was received very well by our readers.  Herein we are providing an extension of the same idea and proposing some more betterment and improvement in our system of banking.  As we always say, our emphasis on banking is only for the sole reason that it is the banking system which is at the heart of the economy (in literal sense!) which pumps money and circulates money into the system and thus keeps the economic systems of the world running.  Just like a healthy heart is required for a healthy body, a healthy banking is required for a healthy economy.

DIGITAL BHARAT : APNA MITRA – new age of banking

Are our rural households digitized enough to call Bharat a digitized Bharat?  Here we are not talking about the internet.og initiative of web giants like Facebook. We cannot call Bharat digitized if our rural and semi urban population have to stand in a queue in front of Bank, Tehsildar office, Taluka panchayat etc.

A secured payment gate way is the need of the hour. We are discussing the digitization solely from the bank perspective. In the age of mobile banking, internet banking and phone banking where is the banking?.  An illiterate person is still facing the issue while opening a bank account, withdrawing the money and sending the money. We call for a one stop solution. Whenever the rural Bharat customers come to the bank, they face a hell lot of issue regarding transfer of money and it’s not because of bank or bank staff it is because of the stringent KYC rules, which majority of the layman rural public are unaware of. Why we require PAN card when a simple and strong document such as Aadhar card is there?  It’s high time to appreciate the use of Aadhar card.

 HASSLE-FREE ACCOUNT OPENING

As mentioned in our first article, even an illiterate person can open an account without signing a paper work. Mr Nobody has come up with a digitization solution for banking in our Bharat.  Just go to APNA MITRA [ Name of a banking Kiosk ] and One Mitra [ Business correspondent – any government/bank  appointed person ] will be there who will help in opening of account . Just provide Aadhar card number and biometric signature [ thumb imprint ].  If both match then automatically the kiosk will show nearest bank and its branch;  if user wants to select some other bank, then that option will also be there . Click on submit and go to the concerned banks' business correspondent [ BC}. BC will issue the passbook with Aadhar no as the Unique Customer Identification number (to prevent duplication of the same person opening accounts in multiple banks) and a bank-specific account number.  While issuing the passbook, the BC has to ensure the nomination of the account.. The data collected at the Kisok will be updated at the back end of various banks in batch at the midnight so that customer will not face any issue. Probably by this, everyone can have a bank account especially an illiterate person.

THE NEW PAYMENT GATEWAY MODEL

For the new payment system we propose a system of BIDN or the Beneficiary Identification Detail Number which is nothing but a type of PIN (or personal identification number) that you use for withdrawing cash from your ATM, etc.  It is scientifically proven that generally a person can remember well without mixing up any number upto 4 to 5 digits and hence the PIN is normally kept at 4 digits.  A similar PIN or BDIN can be issued to all account holders that will help them receive cash from others just by sharing their BDIN with their benefactors.  The transfer system should be something like this:-
->Person will go to kiosk and put his/her thumb on biometric panel.

->Aadhar card and corresponding bank accounts will be displayed

->Select a bank account

->Go to transfer section

->Enter the BIDN [Beneficiary Identification Detail Number]

->Select the account

->Put the amount and click on transfer.

->Click on submit.

Aadhar card no is having all the details such as name, phone no, Date of Birth , Address and Biometric. So if we create a central clearing center where central database will be maintained containing bank account number and aadhar card, kiosk will be setup at the place of  high security such as police station , bus stand , railway station, airport , hospital , public offices and banks etc  where the  threat perception will be low , so that user will be able to do the transaction peacefully. The whole network will be under the supervision of the central bank under the vertical of central clearing system.  User should be in possession of BIDN number [Beneficary identification detail number] of beneficiary before doing the transaction of sending the money.  In case of government and corporate accounts, the user has to request for BIDN himself /herself.  For generation of BIDN the beneficiary can call a toll free number constituted by the central clearing system where IVR will ask to put the Aadhar card number and account number.  If the three fields, i.e. registered mobile number, Aadhar card number, and account number will match then, BIDN will be messaged to the user on the registered mobile number.  If user is not using the registered mobile number, then IVR will ask the user to pitch in date of birth and registered mobile no to create a secure framework.  After receiving the BIDN the sender has go to a nearest kiosk , wherein he / she has to put his/her thumb imprint and Aadhar no to login. After logging in, the central clearing system will display all the account numbers the user is maintaining with different banks. User has to choose the desired account number, put the amount, BIDN and submit.  Money will be transferred immediately.

This particular system can be used for ECS [ electronic clearing System ] as well.  We appreciate the services of IMPS for sending the money, but for rural and semi urban population a simpler payment solution might be more helpful.  Probably after reading the article readers might think that Mr Nobody has come up with another junk , but it is fact if we are unable to increase the economic status of rural and semi urban households we will not be able to achieve the dream of digitized Bharat.  And for this to happen it is also required that all the government departments such as revenue and land records can also come up with a functionality to get the requisite documents online thus leading to decrease in corruption and an increase in efficiency.

A Happy Ethmos to All!