“There has been expansion, greater competition and diversification of ownership of banks leading to both enhanced efficiency and systemic resilience in the banking sector. However, there are legitimate concerns in regard to exclude rather than attract vast sections of population, in particular, pensioners, self-employed and those employed and those employed in unorganized sector. While commercial considerations are no doubt important, the banks have been bestowed with several privileges, especially of seeking public deposits on a highly leveraged basis, and consequently they should be obliged to provide banking services to all segments of the population, on equitable basis”

- Dr. Y.V. Reddy, Governor (Reserve Bank of India)
Source: Annual Policy of Reserve Bank of India, 2004-05

Indian financial sector, guided by the Central Controller, The Reserve Bank of India (RBI), has been on a constant endeavor to expand its base and bring the entire country within the umbrella of formal banking system with a view to improve access to basic financial services in both the Urban and Rural Areas within the country. Though the urban public and private sectors have enjoyed the benefits arising out of initiatives of the RBI, the intended benefits have sparingly percolated to the rural segments with the poor still lacking access to credit, causing them to suffer high interest rates from money lenders who still dominate rural India.

The banking arena in India, over the last decade has undergone a substantial change. The concept of banking evolved by the use of Internet, phone and ATMs have made 'anywhere banking' possible and has though transformed the urban mainstream, have left the rural segment totally untouched. Rural sector has largely been highly regulated and has shown slow growth rate in spite of creation of Regional Rural Banks and Rural Co-operative Credit Institutions all across India. This has led to Financial Inclusion to become a mere social responsibility rather than a viable business opportunity. Challenges faced by banks in making Financial Inclusion a viable venture are:

• Delays in extending financial services due to need for guarantors and third party collateral requirement in serving the end customer
• Inability to point out productive customer clusters consequently leading low foot falls in rural branches. Branches that register high number of foot falls, suffer from customer dissatisfaction as end customers have to typically travel a great distance to reach a bank branch, consequently leading to delayed banking interactions on behalf of the customers and high customer acquisition cost
• Low value, small ticket transactions typically seen in the rural sector
• Spread out geography hampering the growth of branch based operations due to high capital investments to support a branch
• Largely manual operations in rural braches leading delayed decisions by typical Bank Head offices

FINO solutions aim to provide the much needed infrastructure support tuned to the requirements of the rural landscape. FINO endeavors to create a financial and information supply-chain into the customer last-mile and bring the vast majority of underserved Indian population. A biometric enabled smart card based offline infrastructure provides and ensures that financial and non-financial products and services complying with KNOW YOUR CUSTOMER guidelines are extended to the remotest of the remote with ease.

FINO is built on a platform of cutting edge technologies including, Smart Card System, Core banking system, ID Management system and interfaces to 3 rd party systems and provides services that are flexible and modular. FINO system gives Banks the unique ability to drill down to an individual customer and ensure the quality of portfolios as well as actively develop a strong network of customers, banks, governmental agencies and other participants constructively contributing the value chain of Financial Inclusion.