IMPORTANCE OF BRANCHLESS BANKING & MOBLLE BANKING IN PAKISTAN

Presented By
Daniyal Nasir Farhan Haider

Afshan Mehdi

Introduction
Branchless banking is a distribution channel strategy used

for delivering financial services without relying on bank

branches. The strategy may complement an existing bank branch network for giving customers a broader range of channels through which they can access financial services,

It can also be used as a separate channel strategy that entirely

forgoes bank branches.
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History
United Kingdom are the pioneer of this class of service. Launched by the then-Midland Bank (now part of HSBC) in 1989, Branchless banking regulation was first introduced in Pakistan in April 2008. the State Bank of Pakistan (SBP) has taken a constructive regulatory approach by providing clear guidance and being willing to listen to businesses and adjust regulation where necessary.
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Branchless Banking Model

PROS

Saves time and cost Hassle has been minimized Buying and selling Fund transfer from one place to other.

Cons

Cyber Crimes Services failure accounts are illegally used Breach of Privacy

BANKS ANALYZED

Muslim Commercial Bank United Bank Limited

 Balance Inquiry Mini Statements Fun Transfer Pre-Paid Top Ups Payment of Post Paid

Bank Account Statement Credit Card Balance

Inquiry Utility/Mobile Bills Buy Pre-paid Vouchers Send Gifts

Mobile Bills Utility Bills Visa Credit Card Payments Maintain Favorite Payees Report a Lost ATM Card Donation

 Mobile Services Available only in

Pakistan

 Fund Transfer
Fund Transfer to any Orion To Orion

MCB account Holder, Not Necessarily a user of Mobile Banking

Only

Mobile Account
Subscribers will now be able to pay bills, transfer money and use

many more services from their own mobile phones

Mobile Accounts are actual bank accounts and work just like a

normal bank account

Can be opened through: Sales and Service Centers Franchise Bank branch
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Mobile Account
Features Any current or new subscriber can open a Mobile Account. No prior Bank Account is needed; Anyone with a Cellular SIM can avail and use this service Send money to any person with a valid NADRA CNIC or to any other easypaisa Mobile Account. Utility bills can also be paid instantly from an Mobile Account Cash Deposit into a Mobile Account or Cash Withdrawal from any Mobile Account can be done.
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ATM AND POS APPLICATION ARTITECTURE

Debit Card Authorization

Switch System

Credit Card Authorization

How to open a Mobile Account

Easy Paisa Mobile Account is offered to only Telenor customers. Steps to open an account are: 1) Go to any Telenor Service Center, Franchise or Tameer Bank 2) You should have a Telenor SIM (registered in your name) 3) You should carry original CNIC 4) Fill in a form plus photograph (will be taken by Telenor Staff in real time) 5) Sign the form plus thumb impression

6) Get the receipt and you are done

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Facilities offered by Branchless Banking System

Person-to-Person Fund Transfers:
Customer can transfer funds from their BB or regular account to BB or regular accounts of same or some other bank of other customers. Cash-in and Cash-out: Customers may deposit and withdraw funds from their BB account

using a variety of options including bank-branch counters, ATM

machines and authorized agent locations.

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Facilities offered by Branchless Banking System

Bill Payments: A BB account can also be used to pay utility bills (e.g. Gas, Electricity, Phone etc.) Merchant Payments:

Customers can use a BB account to make payments for purchases of goods and services.
Loan Disbursement/Repayment: FIs, particularly MFBs may use BB accounts as a means to disburse small loan amounts to their borrowers having BB accounts. The same accounts may be used by customers to repay their loan installments. Remittances: BB accounts may be used to send / receive remittances subject to existing regulations.
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Classification of B-Banking Model

One-to-One (1-1) Model:

In this model one bank offers mobile phone banking services in collaboration with a specific Telco.
One-to-many (1-) Model:

In this model a bank offers mobile phone banking services to customers using mobile connection of any Telcos.
Many-to-many (-) Model:

In this model many banks and many telecom join hands to offer services to virtually all bankable customers.
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INTERESTING FACTS
European and Asia-Pacific regions are considerably ahead

of the US in terms of mobile banking.

Pakistan has 90 million mobile users whereas there are

only 26 million Bank Accounts holder in Pakistan and that

is why Pakistan has great potential for Mobile Banking

and to bring un-bank people in the Banking fold.
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Mobilink is the first mobile operator to launch a mobile payments solution in Pakistan under the name Mobilink Genie in December 2007 MCB mobile Takes the lead with over 11,000 Customers and Rupees 60 Million worth of transactions in the first month of its Launch

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Branchless Banking Procedures

1) Banks wishing to provide branchless banking services or to bring in substantial changes in underlying technological infrastructure shall submit to the State Bank, an application describing the services to be offered, infrastructure modifications and how these services fit in the banks overall strategy.

2)

SBP shall pre-screen the overall financial condition of the FI as well as the compliance
with the SBP rules and regulations based on the latest available onsite and offsite reports

3)

Based on the review, a principle approval of the application will be granted.

4)

After getting this principle approval the FI shall, in turn notify the SBP on the actual date of launching/ enhancement of its BB services.
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Branchless Banking Procedures

5) Within thirty (30) days from such launching/enhancement, banks shall submit to

the SBP, the following documentary requirements

Business objectives Description of Banks electronic system List of Software and hardware components Contingency and Disaster recovery plan Copy of Contracts with service provider

6)

Upon completion of evaluation, the Authorization will be granted.

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Major Branchless Banking Service Providers in Pakistan

Market Leaders in Branchless Banking:

1.

Easy Paisa (Telenor in collaboration with Tameer Microfinance bank)

2.

Omni Shop (UBL)

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Suggestion
Following are suggestions that should be considered as follows: Increase the level of information about BB of the target market by launching different type of campaign and make understand the system to the target market. Free Internet service to be provided at every possible place in order to utilize BB service. Level of security to be ensured by authorities for making safe transactions by this innovative BB service. Banks should focus on IT in order to improve the BB service by applying up to date computing technologies .
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Conclusion
In short BB is the most convenient and affordable banking
industry which is attracting low and middle class as well as the upper class of the society by offering financial services with the help of new technology.

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