Through smart cards banks reach to rural, urban poor

More and more banks have reached to the doorsteps of the urban and rural poor through smart cards and biometric cards. Smart card provider, FINO (Financial Information Networks and Operations) has just brought in one million households under its fold, in a joint arrangement with a number of banks including Union Bank of India, ICICI Bank and PNB.

The company has issued 8.5 lakh cards bringing million of house holds under its umbrella “The card issuances happen with a lag, but we have got a million customers already and issuances will follow,” FINO CEO Manish Khera said.

From few years the central bank has been emphasizing for reaching out the banking facilities to the poor people in rural areas. Working on these lines the banks are trying to draw in more people into the formal banking network by reaching out to the poor people in rural areas as well as hawkers in urban areas.

The Union Bank of India chairman and managing director MV Nair, stated that his bank has brought in two lakh people and the number is split between rural and urban poor. “Union Bank’s target for 2008-09 is to include half-a-million customers in rural as well as urban areas. We will issue cards to them as well, and encourage them to be a part of the formal financial system,” he said.

Smart cards, or biometric cards are similar to debit cards, but they use fingerprinting for identification instead of personal identification codes. According to Mr Khera this technology is actually safer than the current one used for debit and ATM cards.

He gave the suggestion that with the introduction of the fingerprinting and client-details in their database can contribute to the National ID program, as they are unique identification devices. He further added that the client’s ‘e-passbook’ is loaded on the card itself and contains all the financial details of the holder. The scheme got a good response since they are actually reaching out to the customers. “Banks normally adopt a passive approach to the poorer segments, further their procedural requirements can not be satisfied by most of the hawkers and migrants,” said Mr Khera. Banks, which have joined with FINO, have relaxed some of their know-your-client (KYC) requirements.