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Track 2A Mor Part II ICICI Microfinance ppt NextBillion net

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					     Mobilising remittances
      – Indian Experience



Nachiket Mor, Executive Director, ICICI Bank
San Francisco, December 13, 2004
    The ICICI Bank Group




    Successful joint ventures in insurance, merchant banking,
    venture funding and asset management



2
         Vast geographical reach


                      AMRITSAR SHIMLA
                        JALLANDHAR
                                                                        Balance sheet size    $ 25.46 bn
                          NAWASHAHAR
               LUDHIANA
                  (2)
                    CHANDIGA
                      RH (3) FARIDABAD
                                                                        ATMs                  1790
                     DELHI (7)
                JAIPUR
                               Lucknow                       Guwahati   Branches              469
             UDAIPUR
             AHMEDABA
                 D (2)
                          BHOPAL
                                         Patna                          Customers             6.0 mn
MOTI    JAMNAGAR
                BARODA INDORE
KAVDI                                              ALIPORE
                                          JAMSHEDPUR
                                                                        Internet bank users   1.4 mn
       RAJKOTSURAT
                                                CALCUTTA
               VALSAD
                  NASIK     NAGPUR                     (3)
      DAHANU                                 BHUBANESWAR
                  AURANGAB
      MUMBAI
                         AD
        (12)
                 PUNE
                                HABSIGUDA
                              HYDERABA
                                        VIZAG                           Credit cardholders    0.6 mn
                                 D (3)


               GOA (3)
                                                                        Bond holders          6.0 mn
                               CHENNAI
                   BANGALOR
                                  (3)
                       E       PONDICHERRY
                       MANIPAL
            MANGALOR     COIMBATO
               E           RE (3)


                KOCHI




3
    Transforming channel usage…
                           Share of          Share of
        Channel         transactions in   transactions in
                          March 2000      December 2003

       Branches             94%                30%

         ATMs                3%                46%

    Internet & mobile        2%                13%

       Call centre           1%                11%


      …scaling up to handle rapid volume growth


4
      Rapidly establishing a strong overseas
      platform
    Canada                                         Russia
                                UK                      China
             USA

                                                  UAE        Bangladesh
                                     Bahrain

                                               Mumbai
                                                                  Singapore
                                                 Sri Lanka




                            South Africa

                   Representative Office        Offshore Branch
                   Subsidiary                   Proposed presence



5
    Remittance business in India is driven by
        Cash based           Money Transfer Operators (MTOs) -
     electronic transfers      Western Union Money Transfer


        Post Offices,        Department of Post handles 150 mn
        Bank drafts           Money Orders worth USD 1.33 bn


     Account-to-account
       wire transfers       Through established bank wire system



          Informal               Friends, courier companies,
          channels                     bus drivers etc.




6
    Pattern of remittances to India
                                      10%
                                1%                       Figures in USD billion

    Total remittance of                    1.8
                                                                41%
      USD 17.60 Bn
                                                   7.2
                                     7.2                        Annual growth rate
                          41%                                        of 15%
                                                 1.2
                                                    7%
                    US      UK       GCC     Singapore Other countries


       Banks                                                                      (65-70)%

       Money Operators                           (20-25)%

       Exch. houses              (5-10)%



7
    ICICI bank has adopted a three pronged
    strategy…




8
      …using cutting edge technology solutions

                          Technology




    Product     Process                Value




9
     …to offer a full gamut of remittance
     offerings
                               Online Channels
      e-Transfer     Cheque Transfer Power Transfer       Net Express
      Direct Debit     Collection of     Wire transfer      Internet
        facility        cheques           of funds          banking

                               Offline Channels
             Speed Transfer                       DD Drawing
         Remittance file uploads by      Drawing of DDs on ICICI Bank
          Exchange Houses / banks                   locations

              Insta Transfer                      Home Point
          Instant transfer of funds        Deposit funds at branches

                       Foreign Currency Cheque Collection



10
         A multi-channel remittance offering
         Remittance Origination                     Remittance Payment

        Internet                                         Demand draft issued and
                                                          dispatched by ICICI Bank from
                                                          India
                    Remitter uses our
                    Money2India facility to
                    transfer funds                        Credit to the beneficiary's
                                                          account with ICICI Bank
        Overseas Branch
                    Remitter posts a           Credit to account facility is available
                    cheque drawn on its         at over 450 ICICI Bank branches at
                    Bank                        over 200 locations
                    Remitter makes a           ICICI Bank can issue & dispatch
                    request to its Bank, to     DDs to over 1250 locations in India
                    wire transfer money

                                              Direct Credit to Accounts at over
                                              30 banks will be launched shortly



11
     Unique benefits offered by Money2India

        Superior Exchange rates
        FREE money transfer to ICICI Bank accounts
        DD can be issued to over 1250 locations
        Convenient tracking facility for Internet based money
         transfer facilities



         Money2India from ICICI Bank offers a wide range of money
           transfer products to suit the needs of every customer




12
     Designing product access to service
     rural customers
        Urban customers           Rural customers

         Product design            Product design

                                Product access design
       Time to transfer (TAT)

                                 Proximity to customer
       Cost/ Fx margin

                                 Fraud proof
       MIS support

                                 Friendly interface




13
     Technology can change the rural banking
     paradigm …

     Rural India                                            Rural banking



     638,000                                                32,000
     villages                                               branches


     742.0 mn
                                                            C/D = 0.42
     population


               … through low cost ATMs and rural kiosks


      Source : Census 2001, RBI Quarterly Statistics 2003
14
     Bridging the digital divide by using
     technology in the rural areas
     Low Cost ATMs
        •Low cost ($1,365) compared
         to traditional ATM ($ 25,000)
        •To provide most basic
         service of deposits and
         withdrawal
        •Facilitating a chip card for all
         financial transactions and
         data storage



15
       Kiosks as multi activity centres


                                                                   Wireless
                                           Internet Kiosk         Connectivity




                                                            Personal Computer
STD/PCO:                                                      with Speakers,
•Enabling voice                                             webcam and other
communication                                                  accessories
•Co-ordination with
traders and local
partners
                                                            Printer and Copier:
                                                             Enabling DTP &
                                                                 job work
               Kiosk Operator:
               •Entrepreneur
               •Provides commercial services


16
      Facilitating remittances through kiosks
                                               INDIA   GULF COUNTRIES



                      ICICI Bank
                                                          Remitter
             (4)                              (3)
                       Proximity                          (2)
                      Fraud proof
                   Friendly interface
Remitter’s                              (1)
 family



                                                           Exchange
                      Internet Kiosk                        House



17
     The untold story of Indian Postal System
                                         Money Order    E. F. T.   Speed Post

                                           Parcels     Insurance   Mutual fund



         155,600 post offices all across India
               16,500 Urban locations
               139,100 Rural post offices covering 638,000 villages
         150 million money orders (MO) handled per annum
         USD 1.33 billion changes hands through MO




18
        Money walks the Shramika Sahajoga (SS)
        way – Adhikar initiative
                                                            (4)
                               Twice-a-week remittance
                               MIS – list of families, amount
        SS Bank A/c                    disbursed etc.              SS Bank A/c Tangi
S       Gandhidham
A              (1)                                                   (5)
V (3)
I                                       Name & address
N
G                                       Detail of family members
         Registration
S                                                                   SS field staff
               (2)
                                              (6)    Money delivered to
                                                     family members of
                                                        the migrants
     Passbook to individuals

     Speed, safety & cost-effectiveness

19
     The road ahead
        Credit recovery mechanism
             Personal loans
             Capex loans – house, auto
        Recovery of MFI loans
             Lending through MFIs to get
              recovery by remittances
        Payment options
             Insurance, investments etc.


              Linking remittances to asset products


20
      Creating unique customer ID and linking
      to credit history of individuals

        Unique
      Customer ID



     Credit History   Common info pool
       Data on
     CIBIL Pattern

                                         Prudent Lending



21
     Key Issues and challenges

        Information systems for accurate, speedy and cost-
        effective delivery of services

        Controls to prevent frauds where fund flows are
        predictable & customers known

        Awareness about an alternate channel amongst
        migrants is critical for achieving scale

       Regulatory issues for the agencies to become
       money transfer agents for Banks


22
     Thank you




23

				
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