Leveraging technology for financial inclusion

Punjab National Bank’s ICT for Financial Inclusion programme utilises a confluence of simple technologies to extend benefits of formal credit to the unbanked poor masses in India.


Nearly 65 per cent of households in India borrow money from non-institutional sources. The lower the asset class or income of the people, the higher is their degree of exclusion. Based on the Reserve Bank of India’s guidelines for use of entities like NGOs and SHGs to reach rural populations, Punjab National Bank (PNB) adopted an ICT-based branchless banking solution that relies on Business Correspondents.

The solution entails use of smart cards, hand held terminals, biometric devices and simple ICT tools like laptops, webcams and battery back up devices to provide for easy enrolment of new customers. ‘No frills’ (zero balance) accounts are opened for customers with relaxed Know Your Customer norms and an overdraft facility of INR 2,500. PNB Mitra ATM cards are provided with a daily withdrawal limit of INR 5,000.

As of March 2011, under both its ICT-based and branch-based FI models, the bank has opened nearly 74 lacs accounts, amounting to a business of INR 1,00,342 lacs. It currently runs 39 ICT projects across 14 states in India, expanding over 5400 villages. The initiative has proven than provision of banking and financial services to the unbanked can prove to be a profitable business model.

This case study was published in September 2011.

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