The Hindu : Front Page : Zeroing in on branchless rural banking

Online edition of India's National Newspaper
Sunday, Oct 07, 2007
ePaper

Front Page

Front Page

Zeroing in on branchless rural banking

Special Correspondent

Indian agencies join hands to create unique mobile-based micro-banking solution

— Photo: Special Arrangement

QUICK FIX: Villagers in Mizoram queue up with their smart cards to transact microbanking business using the zero mobile system.

Bangalore: Hundreds of villagers in Warangal district in Andhra Pradesh will, for the first time this week, receive payments under the National Rural Employment Guarantee Act (NREGA) through a cutting-edge disbursement method that would be deemed “tomorrow’s technology” in many developed nations.

The recipients have been given smart cards fuelled by the Radio Frequency Identification (RFID) technology and incorporating what is known as a “biometric” scan of their fingerprint. The disbursing official carries the entire bank system on a special mobile phone that has been enhanced by a chip developed by the European semiconductor company NXP, (originally founded by Philips), with key contributions made at its Indian development laboratory in Bangalore.

The chip enables secure data communication between the phone and RFID smart cards, using contactless Near Field Communication (NFC) technology co-invented by the NXP. A scanner to read the recipient’s thumbprint, or a printer to issue receipts, can also be attached to the phone. The application using the NXP chip is the work of the Mumbai-based technology developer, A Little World, who fashioned it into the “Zero” mobile platform for inclusive banking. They are partnering the non-profit agency Zero Micro-finance and the Savings Support Foundation (ZMF) in taking it, on a pilot-plant basis to Uttarakhand, Andhra Pradesh and the North Eastern States. Six banks — the SBI, Union Bank, UTI Bank, Andhra Bank, SBH and AP Grameen Bank — and the RGI have come forward to deliver services to the ‘unbanked’ rural areas using the Zero platform.

Talking to The Hindu, Anurag Gupta, founder and Chief Executive of A Little World ( www.alittleworld.com) said the project had already gone live in Warangal district for social security pensioners. For the first time, payments were made on Saturday to beneficiaries using the Zero solution. It had been tried out successfully in remote areas around Aizawl in Mizoram and Pithoragarh in Uttarakhand, which did not have a bank branch.

Ashok Chandak, Director of NXP Semiconductor (India), explained that the NFC technology used in the Zero application harnesses the same chip that is embedded in the electronic passport that is being implemented in over 35 countries. The NFC-enhanced phones used in the Indian micro-banking project are sourced from Nokia and Motorola.

Printer friendly page
Send this article to Friends by E-Mail

Front Page