Open Standards On Smart Card Based Solution For Financial Inclusion

Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.

Extending banking to the unreachable and excluded areas where there are no bank branches, consistent power supply or communication links such as telephones or Internet is a daunting task. This calls for innovative approaches in taking banking to remote regions. The Reserve Bank of India has come up the business correspondents/business facilitator model. Instead of opening full-blown brick and mortar bank branches in remote areas (an expensive proposition) it is proposed that with the help of modern information technology and managerial capabilities of business correspondents banking services could be extended to vulnerable groups and people in remote regions.

Several banks and technology solution providers have ventured to provide information and communication based solutions for financial inclusion. The lack of common technical standards has impaired the pace of ICT deployment for Financial Inclusion and has led to vendor dependence for technology components. This has made solutions deployed by a particular bank solution provider specific making a customer of a bank unable to interoperate across all outlets of the same bank. IBA and IDRBT teamed up to provide a solution to this problem by holding a ‘Workshop on Open Standards for Financial Inclusion’ in February 2009. During this workshop it was decided to constitute a “Technical Committee on Open Standards for Financial Inclusion” comprising of a few select banks like State Bank of India, Punjab National Bank, Union Bank of India, Corporation Bank, South Malabar Gramin Bank, UCO Bank, NABARD and institutions like IIT Kanpur and National Informatics Centre (NIC). This Committee as its first step has drafted standards for smart card based solution for financial inclusion.

  • Overview Document
  • Technical Document I Customer Card Data Architecture
  • Technical Document II Terminal Operator Card Data Architecture
  • Technical Document III Terminal Specifications
  • Technical Document IV Key Management Scheme