Coming as a pat on Indore Municipal Corporation’s back, World Summit on the Information Society (WSIS), a United Nations initiative, has recognised reforms undertaken by the civic body in disbursing old-age pension, given to people above 55 years from families below the poverty line.

The city corporation decentralised old-age pension disbursal as part of its reforms project, Saksham, by taking help of kiosk banking model and biometrics-based authentication.

The corporation has partnered with Bank of India (BoI) for banking services and Network for Information and Computer Technology (NICT) for setting up the kiosk, providing the technical support, selecting and training ‘social entrepreneurs’ (kiosk operators) chosen from the local community.

The beneficiaries of the centrally sponsored pension scheme get Rs 300 per month, for which they literally had to run pillar to post, as the money was handed out at corporation headquarters. While the beneficiaries had to travel to the headquarters every month, and often on multiple occasions, there are complaints about having to pay a bribe to the officials concerned, too.

Though the corporation later delegated the disbursal work to postal department, hassles continued.

With the new system in place, beneficiaries need to visit the nearest zonal kiosk, which is also banking correspondent for BoI, get enrolled by submitting an ID proof and biometrics, and get the cash in a jiffy – every month.

Win-win for all

While Saksham meant the corporation would no longer have to sign thousands of vouchers and cheques, the officials also would not have to deal with a crowd of beneficiaries due to decentralisation of work at the zonal office kiosk.

As of now, around 15,000 beneficiaries are getting their pensions through these kiosks. The corporation has set a target to cover total identified beneficiaries – around 60,000 – by March 2014. Around Rs 1crore has been disbursed through 15 zonal kiosks, which are enrolling 15 to 20 beneficiaries every day. 

“Pension is usually the only source of income for old-age people in below poverty line category. But they had to make multiple visits (to the civic headquarters) to get even this amount,” says Mukesh Hajela, CEO, NICT. 

An Indore-based social enterprise, NICT already runs a project called ‘Samadhan’ in 62 village panchayats in Indore district. This project handles cash benefits given under social sector schemes such as student scholarship and Janani Suraksha Yojana. Samadhan kiosks at these villages have been merged with common services centre (CSC) – a network of e-kiosks set up under the national e-governance plan (NeGP).

Already working in the social sector, Haleja says NICT made a presentation to the corporation on pension disbursal through kiosk banking in early 2012.  Since Bank of India was lead bank in Indore area, it was roped in as the banking partner. The bank trained master trainers from NICT, which in turn trained the social entrepreneurs.

Fifteen local entrepreneurs were selected, six of them women, and underwent training on banking operations and running an e-kiosk.  

Hajela says the project is not just a scheme to empower the pensioners but also an employment generation scheme for the operators. While kiosks are housed in zonal offices of the corporation, the computer and biometric devices are procured by the operator. The total expense, Hajela says, comes to around Rs 35,000 to Rs 40,000. 

A beneficiary can open an account by paying Rs 10, of which Rs 8 goes to the operator and Rs 2 to NICT. The revenue is shared on a similar 80:20 ratio for every transaction after that. The amount paid as commission on transaction, though, varies due to the different types of transactions: savings, money withdrawal, and recurring deposit, among others.

Besides disbursing pension, these centres at present offer banking services under the government’s financial inclusion programme. Though other government and business services are not available at these centres as of now, NICT is working with the civic body for extension of utility bill payment and services available under MP Online project from Saksham kiosks.

According to BoI, efforts are on to make these kiosks a full-fledged banking centre that would offer financial inclusion services to all. “We want to make these centres robust and reliable so that besides the underprivileged section, people who are well off can also access services from our banking correspondents,” says AK Pathak, assistant general manager (financial inclusion programme) at BoI’s Mumbai headquarters.