By the end of the year, the Andhra Pradesh government plans to give its rural pensions through the mobile telephone network, after a successful pilot has shown that the system works well. As this newspaper reported last week, 147 villages in Warangal district are already getting payments under the rural employment guarantee programme in this manner.
The project comprises a Near Field Communication- (orNFC-) enabled mobile phone, which synchronises with a bank's server over a wireless connection, using a fingerprint scanner and a thermal printer.
So, if an NGO or the village
sarpanch becomes the bank's 'business correspondent', he/she gets the villagers' fingerprints on the scanner and enrols them -- a Bluetooth connection transmits these to the phone, which then synchronises with the bank's server.
The phone now serves as the bank's computer in the village and all deposit/withdrawal transactions get reported to the bank on a daily or even hourly basis, depending on the frequency of synchronisation. All the bank needs to do is to ensure that the "business correspondent" has enough funds to take care of daily withdrawals -- 14 banks are already using this system in 42 districts in 17 states.
Based on reports on some of these banks, the costs are low enough for the system to be viable. Nearly half a million customers in villages are being served by these banks,