Mumbai: The SBI, Andhra Bank and JK Bank are among the banks that will work with the Institute for Development and Research in Banking Technology (IDRBT) and IIT Mumbai in a pilot project for biometric smart cards, aimed at rural inclusion into the banking system.
The rollout will take place in the next six weeks and will initially be confined to the North-East region.
With these smart cards, all kinds of government payments like pension, utility payments such as healthcare, crop insurance, life insurance would be channelised through this common infrastructure, which is expected to cut down the cost of delivery of these services.
These prepaid biometric smart cards, while serving as a national identification card, is also expected to serve as a centralised core banking system, thereby facilitating the purpose of a rural credit bureau.
Member Secretary, Governing Council and Director at IDRBT, Arvind Sharma told moneycontrol, "Through this project, we will be able to bring large rural audiences and banks together. Under the RBI's directive, intermediaries such as the banking facilitator and banking correspondent will obtain a village's records and save it in the bank’s service processor."
These smart cards will capture and process transactions, which will cut a major portion of the bank's cost according to IDRBT. IDRBT expects to take banking services to remote villagers and hopes that the smart card will help in the integration of various sources of money under various government schemes.
Additionally, such cards would also enable one to load subsidies granted under the public distribution system. “Rural micro-finance needs a common platform, which is missing today, but this is what we want to provide. A farmer need not come to a bank. So, maybe twice a week, the business correspondent will go around the village and help villagers with transactions, and also provide receipts on the spot. Also if a villager comes to a city and buys fertilizers or seeds, he would not need cash and can pay through this smart card,” says Arvind Sharma.
IDRBT hopes to target 20,000 accounts by December.
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