4-page Case Study
Posted: 3/11/2014
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National Informatic Centre Co-operative Core Banking Solution (CCBS) Modernizes Infrastructure, Empowers Small, Rural Cooperative Banks

Analysts, government and the Reserve Bank of India (RBI) all agree that financial inclusion is a key means to revive growth in the Indian economy. NIC embarked on this journey two years ago. The Cooperative Core Banking Solution (CCBS) on Windows Server 2008 R2, SQL Server 2008R2 and ASP.Net 3.5 enables State Cooperative Banks (SCBs), District Central Cooperative Banks (DCCBs) and Primary Agricultural Cooperative Societies (PACSs) to disburse payments to beneficiaries at the grassroots level. CCBS adheres to the RBI guidelines. The banks also gain from a centralized solution that delivers more control, secures data in real time and reduces costs. Most importantly, it helps banks provide better service to their customers such as ATMs and NEFT/RTGS.

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* Delivery of payments and credits to rural citizens is the need of the hour. CCBS enables on-time payment to beneficiaries. And it helps banks with up-to-date information of all transactions and various books and ledgers *

Dr Shefali Dash
Director General
National Informatics Centre

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Situation

With the RBI and Indian government’s focus on financial inclusion as the foundation for inclusive growth, National Informatics Centre (NIC) foresaw the need to have a systemic approach to leverage advances in technology to enhance the effectiveness of rural cooperative banking.

There has been significant progress in the last decade with over 850 branches at the State Cooperative Banks Cooperative (SCBs), 12,000 branches of District Central Cooperative Banks (DCCBs) and over 100,000 PACs in villages. While cooperative banking continues to be the mainstay of financial inclusion, estimates indicate 37 percent of the population remains excluded from basic banking services despite development in the sector.

Notwithstanding their wide network and close proximity to its members, rural credit cooperatives suffer from many problems, which not only hinder their growth but also pose a threat to their existence. These banks are cash-strapped and unable to expand or offer new services.

“While the commercial banking system is taking steps to extend its reach to rural areas, we wanted to develop a core and efficient system to ensure timely payment to the beneficiary,” says Dr Shefali Dash, Director General, NIC. Its ‘Informatics-led-development’ program delivers competitive advantage by implementing ICT applications in social and public administration. “Delivery of payments and credit to rural citizens is the need of the hour. CCBS enables on-time payment to beneficiaries. And it helps banks with up-to-date information on all transactions and various books and ledgers.”

Solution

Under the ‘Informatics-led-development’ program, NIC decided to develop a comprehensive Core Banking Solution for Cooperatives (CCBS). “Our main objective was to make banking facilities available to the rural areas of the country and serve the poorest of the poor,” explains IPS Sethi, Senior Technical Director, NIC. “The idea was to enable smaller, poorer banks with a core banking solution that allows them to offer services similar to the nationalized and private banks.”

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NIC developed the solution on the Microsoft stack of products, which included Windows Server 2008 R2, SQL Server 2008 R2 and ASP.Net 3.5. “Our Core Banking Solution that runs over 100 branches in India was built on the Microsoft platform. Migrating to a Microsoft web-based architecture would be easier for these banks, while the transition would be smooth for their employees, reducing the learning curve significantly,” comments OP Gupta, Systems Analyst, NIC. “So Microsoft was the logical choice. The architecture not only accommodates current requirements but is scalable for the future as well.”

The CCBS developed as per Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD) guidelines. It accommodates all requirements of SCBs, DCCBs and PACS. It is designed to enable agricultural societies at the village level to disburse the social sector related government funds such as Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), Mid-day Meal scheme and Old Age Pension to the targeted beneficiaries at the doorstep.

“With CCBS our business operations are smoother and more efficient,” says Spokesperson, Leading Cooperative Bank in North East India. “It has the potential to meet any initiative or strategy; for example, we recently launched ATM and NEFT/RTGS services for our customers.”

Run from a central server, the CCBS application is hosted at NIC’s data center. Branch users connect to the data center through the secure SSL authenticated, 128-bit encryption VPN over broadband. This ensures high-speed access to information in real time.

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* With CCBS our business operations are smoother and more efficient. It has the potential to meet any initiative or strategy; for example, we recently launched ATM and NEFT/RTGS Services for our customers *

Spokesperson
Leading Cooperative Bank
North East India

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CCBS: Key Features

Retail Banking Module:Covers Savings and Current Accounts, recurring deposits, fixed deposits, loan and advances and related MIS

HO Module: Covers investment, borrowing, share and consolidation of reports

BCP Module:Covers the modules which allow banks to continue their business even after disruption of network connectivity or other failure

Transac tions in Cash and Kind:PACS can disburse loans in cash and/or kind, such as fertilizers, seeds, etc.

ATM & RTGS/NEFT Transactions:CCBS has ATM & RTGS (Real Time Gross Settlement)/ NEFT (National Electronic Funds Transfer) interface

CCBS has been successfully implemented across 100+ locations with the help of National Informatics Centre Services Inc (NICSI), the services arm of NIC. Currently, the solution is implemented at 47 branches of Meghalaya Apex Cooperative Bank, 60 branches of Raipur DCCB in Chhattisgarh, and in Hathoj PACS in Rajasthan.

Benefits

For NIC, the move to Windows Server and SQL Server has been a positive step along the path towards optimal IT efficiency. Spokesperson, District Cooperative Bank says, “CCBS is a centralized banking solution developed with enormous care to minimize the cost of application and provide better returns on investment. We did not have to invest money to create a data or disaster recovery center; we did not purchase high-end servers or spend on maintenance. By removing the financial entry barrier, we were able to migrate all 60 branches to core banking.”

Reduces Investment, Decreases Costs

By implementing the CCBS solution on the government cloud, NIC foresees significant financial savings for banks. Much of the cost savings come from elimination of duplicate infrastructures and human resources. By offering a hosted service over a network of NIC data centers across India, the organization is providing a low- cost solution. “By offering a centralized solution to all cooperative banks, we anticipate the savings will continue to increase,” says IPS Sethi. “The Microsoft solution is not only providing us a system that delivers superior results, it is also helping the cooperative banks reduce costs.”

Comprehensive reporting allows the DCCBs to monitor the PACs at district level. They also have access to consolidated information such as loans and recovery status, non-performing assets (NPA) and other credit features that follow the Common Accounting System suggested by the Vaidyanathan Committee under the NABARD rural cooperative banking reforms.

Moreover, CCBS recognizes the special role of PACs in rural society. Therefore, it also has a non-credit module that focuses on activities such as fair price shop, fertilizer and seed sale.

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* We did not have to invest money to create a data or disaster recovery center; we did not purchase high-end servers or spend on maintenance. By removing the financial entry barrier, we were able to migrate all 60 branches to core banking *

Spokesperson
District Cooperative Bank

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Improves Processes

Bank staff now executes system changes more efficiently. The IT team has better management and control of its IT environment, especially in terms of closing activities in a timely manner. A single interface for multiple transactions of the bank results in timely and accurate preparation of cashbook, trial balance and profit and loss accounts. "CCBS helps in timely payments to beneficiaries. For example, inter-branch transaction was not possible in the TBA environment of the bank. But CCBS enabled us to do faster withdrawal and deposit from any branch of MCAB,” says Spokesperson, Leading Cooperative Bank in North East India. “In addition, the solution provides better and more accurate maintenance of up-to-date data about transactions with respect to an account, various books and ledgers.”

Centralizes and Eases Monitoring

With this centralized solution, end-users are able to view all associated reports to aid in their decision-making process. It offers effective MIS and audit trail reports. Better monitoring of agricultural and non-agricultural loans and advances is also taken care of by the system. The common interface for all the bank categories provides better integration of information flow among SCBs, DCCBs and PACS, thus facilitating better monitoring and planning.

Increases IT Staff Efficiency

Microsoft tools help reduce IT management complexity and the advanced features in the Windows Server version help NIC to keep a lean IT staff. “The system is user friendly and allows us to work much more efficiently,” comments Sanjay Kumar Sinha, Deputy General Manager, National Informatics Centre Services Inc. “For instance, with the feature set of Windows Server 2008 R2, we can set up our disaster recovery solutions quickly, without having to hire additional employees.”

Sanjay continues, “As we conduct multiple maintenance tasks, we want an easy-to-use system. With secured user authentication and efficient data migration, CCBS gives us the needed effectiveness.”


Microsoft SQL Server 2008 R2

Microsoft SQL Server 2008 R2 delivers higher scalability for mission-critical environments, more efficient IT, and expanded reporting and analytics through self-service business intelligence.

For more information about Microsoft SQL Server 2008 R2, go to:

www.microsoft.com/sqlserver/2008/en/us/R2-editions.aspx

For More Information

For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:

www.microsoft.com

For more information about National Informatics Centre, mailto:ccbs@nic.in or visit the website at: www.nic.in

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
Solution Overview



Organization Size: 500 employees

Organization Profile

Established in 1976, National Informatics Centre (NIC) builds e-Governance applications for grassroots to macro empowerment for sustainable development.


Business Situation

Rural and semi-rural citizens need efficient and reliable payment and banking services closer to their place of work or domicile. However, banks don’t have the financial ability to spread their business to meet this need.


Solution

To overcome the challenges faced by cooperative banks, and make financial inclusion a reality, NIC developed Cooperative Core Banking Solution (CCBS), an integrated, web-based solution. This is available to banks on the Microsoft technologies based government cloud.


Benefits

  • Reduces investment, decreases costs
  • Improves processes
  • Centralizes and eases monitoring
  • Increases IT staff efficiency


Software and Services
Microsoft SQL Server 2008 R2

Vertical Industries
National Government Agencies

Country/Region
India

Languages
English

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