Transaction Processing

AMEERUL HASAN

COMPANY PURPOSE
Card Acquiring Transaction Processing ATM Deployement & Cash Management Microfinancing Aadhaar Card based benefits tarnsfer No frill account Opening Fino based activities

Card Acquiring, Transaction Processing and Printing

TRANSACTION PROCESSING

Its a 3 Steps Process

Step 1 Authorization Process Step 2 Clearing Process Step 3 Settlement Process

STEP 1 AUTHORIZATION PROCESS

STEP 2 CLEARING PROCESS

STEP 3 SETTELMENT PROCESS

We estimate the cost of setting up the financial transaction processing switch to be Rs 800 Lacs.

We propose to setup financial processing switch at Mumbai Financial transaction processing switch is a financial message routing system that authorises an ATM to perform atransaction. The financial transaction processing switch connects the ATM to the banks banking software to enableauthorisation of a withdrawal transaction and also to check balances, statements and other transactions on the ATM. The financial transaction processing switch also connects to other banks similar financial transaction processing switch to process transaction of customers of other banks, performed on the host banks ATM. The financial transaction switch is also used to authorise point of sale transaction.

ATM DEPLOYEMENT

ATM Installation Forecast

INSTALLATION TILL DATE

Sr. No. Name of the Bank Rural Branches Semi- Urban Metrop Urban olitanATMs

Total On-site Off-site Total

Scheduled Commercial Banks 23,776 22,468 17,878 17,118 81,240 47,545 48,141 95,686 Public Sector Banks 22,188 17,773 14,248 13,257 67,466 34,012 24,181 58,193 Nationalised Banks 15,606 12,154 10,744 10,132 48,636 18,277 12,773 31,050

Industry Overview

The first ATMs were introduced into India by banks, also known as deployers, in 1988 However, the introduction of the first shared ATM cash network in 1997 changed the face of the industry Cash networks allowed retail customers of individual networked banks to use an ATM of another bank Between 1997 and 1998, ATM deployment grew at a rate of 160% and numbers almost doubled year-on-year in absolute terms

factors driving future growth

The unabated increase in cash transactions Reduced costs of delivering services to customers and increased number of branches The increasing functionality of the ATM Evolution of offsite installations Improvements in communications and IT

Conducive Regulatory Environment

The role of the SemiAutonomous Independent ATM Deployer (IAD) Replacement cycle

2005 RBI introduced regulation stipulating that banks must seek annual approval for their three year ATM deployment plans 2008-09 The eligibility norms for opening up of onsite ATMs were liberalized.

April 2009 Cash withdrawal from Automate d Teller Machines (ATMs) of the banks was made free of charge

June 2009 RBI permitted SCBs to install Off-site ATMs at centers/places identified by them, without having the need to take permission

Overview of the Indian Retail sector

India's retail market is expected to be worth about US$ 410 billion, with 5 per cent of sales through organized retail, meaning that the opportunity in India remains immense.

Retail should continue to grow rapidlyup to US$ 535 billion in 2013, with 10 per cent coming from organised retail,
Reflecting a fast-growing middle class, demanding higher quality shopping environments and stronger brands

Key facts
Around 23 million Adhaar cards linked to bank accounts: Nandan Nilekani ... About 23 million Adhaar cards have been linked to bank accounts of the users so far and the number is expected to swell to 100 million in the next few months, Unique Identification Authority of India (UIDAI) Chairman Nandan Nilekani said.

600 million Aadhaar card by 2014

FINO CASE STUDY

KISAN CREDIT CARD

AADHAAR LINK DEBIT CARD

Canara Bank has launched Aadhaar Samruddhi Card, an innovative Debit Card for customers who have Aadhaar number seeded in their accouns, during the 3742nd branch opening occasion at Mysore district. The card can be used at alternative channels like ATM, POS machine, with Rupay logo. This is an example of the use of Aadhaar, for getting the payment through Micro ATMs by bio-metrics authentication.

MARKET DATA

National Financial Switch (NFS), the flagship product of NPCI, has made a history by recording the highest approved volume of transactions with crossing 210 million mark in July, springing the total transactions to over 240 million. The voluminous growth in NFS business, largely contributed by member banks, has made the distinction of achieving four times of the total number of member banks to 182 from mere 37 three years back. NFS, which is the largest domestic ATM network today, is fast emerging as worlds best ATM network that is backed by superior technology, operational excellence and unstinted support from member banks.

The breakup of the estimated cost for setting up and deploying an ATM
Particulars Cost of ATM License fee to be paid to Axis Bank Total implementation services UPS VSAT Transportation Cost Installation Cost TOTAL Unit 1 1 Cost per Unit (Rs) 3,58,294.75 2,50,000.00 Total Cost (Rs) 3,58,294.75 2,50,000.00

1,15,506.00

1,15,506.00

1 1 1 1

37,806.00 50,861.00 8,000.00 2,500.00

37,806.00 50,861.00 8,000.00 2,500.00 8,22,967.75

The breakup of the estimated cost for setting up currency management branch offices
Particulars Deposit Civil / Carpentry Electrical Fittings Cash Van No of Units 1 1 1 10 Cost per Unit (Rs in Lacs) 25.00 26.07 8.16 4.99 Total Cost (Rs in Lacs) 25.00 26.07 8.16 49.99

Fabrication cost for VAN

Architect Cost Vault Camera Solution TOTAL

10

1.25

12.50

1 15

2.25 15.26 0.17

2.25 15.26 4.25 143.36

The role of the SemiAutonomous Independent ATM Deployer (IAD):

The opening of ATM licenses by RBI has resulted in the birth of a new business avenue where an independent ATM deployer (IAD),installs, maintains and manages the ATM and its site for a bank (Partner Bank) using the partner Banks ATM license. The business model works on transaction based pricing. Transaction can be of two types.Bank cards on banks ATMs and other banks cards on the Banks ATM .

Deployer charges the issuing bank Rs 18 for withdrawal and Rs 4 for Balance Inquiry

Opportunities

The opening of RBI licenses for off-site ATMs opened up a new business opportunity- that of semi-autonomous IAD. We believe we are uniquely positioned to grab this opportunity and other IAD services like installation, maintenance, site build, site identification, cash replenishment, monitoring, vendor management, facility management, software support and help desk. Within 6 months of becoming a semiautonomous The semi-autonomous IAD business is based on transaction revenues and hence the locations of ATMs are important. We believe retail stores, malls and petroleum outlets are high transaction locations for ATMs. We intend to leverage our existing relationships in retail and petroleum segment for tapping the desired ATM sites for our semi-autonomous IAD business.