Microsoft .

NET
Customer Solution Case Study

Rural Banking Comes of Age in India

Overview “The rural populace will be empowered with critical,

Country: India
Industry: Rural Banking
convenient and instant services that cover: finance,
markets, documentation etc. at their very doorstep.
Customer Profile
The Indian Institute of Information
This will improve credit flow significantly.”
Technology, Bangalore (IIIT-B), set up Dr S. S. Satchidananda, Research Director, Center for Banking and Information Technology, IIIT-
Center for Banking and Information Bangalore
Technology (CeBIT), a centre of excellence
for innovation in technology to discuss and
There is an immediate need to step up the flow of credit to
analyze issues and problems faced by agricultural and other rural activities in India, to improve rural
banks in today’s competitive environment.
productivity and economic welfare. TCS, ACNielsen and Envision
Technical Situation Information Systems and Technologies delivered a pilot as
There is no solution available for rural
credit that can maintain low cost while
envisaged by IIIT-Bangalore -- a low-cost technology platform to
delivering a reliable, high performance improve the delivery of banking services to the rural population.
solution that can function in low bandwidth
situations.
The solution uses Microsoft Windows Server System, Microsoft .NET
Solution
Microsoft .NET Framework and Compact
and Windows Mobile to create a comprehensive, fully automated
Framework along with SQL Server 2005 credit delivery system for rural banking. It also proposes a common
and SQL CE have been used to create a
Web based application that can also work
infrastructure for rural data collection, information management. By
offline depending on Internet connectivity. sharing this service, banks and financial institutions will be able to
Benefits
reduce the cost of operations dramatically. It also allows banks and

Cost effective solution financial institutions to reach out to the rural population which till

High security

Local language support
now had not been possible to due high cost and complex logistics’’

Ideal for low bandwidth situations related issues.

Validation of data at source

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Microsoft .NET
Customer Solution Case Study

Rural Banking Comes of Age in India

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“A viable credit rating Situation
The Indian banking sector is facing pressures
system will help to similar to any company – ensure profitability
minimize the non- and to provide adequate returns to the
shareholders. With cutthroat competition
performing assets (NPA) and reduced margins in the urban sector,
of the financial banks are looking to diversify their portfolios
and creating services to tap the rural
institutions. Also, it will markets.
help ensure optimum
With the renewed focus of the Reserve Bank
utilization of funds. of India and the Ministry of Finance for
Therefore, we decided to providing micro-credit to the rural sector
along with the growing competition in terms
create a technology of reach and financial spread, banks and
based rating system will financial institutions have necessarily had to
foray into the rural market.
enables greater
transparency and There are 135 million rural households in
India with a per capita income of INR 8,000.
objectivity.” Statistics show that rural households have no
Dr S. S. Satchidananda, Research Director, savings. A World Bank study assessing
Center for Banking and Information access to financial institutions found that
Technology, IIIT- Bangalore amongst rural households in Andhra Pradesh
and Uttar Pradesh, 59 percent lack access to
deposit account and 78 percent lack access
to credit. Considering that the majority of the
360 million poor households (urban and
rural) lack access to formal financial services,
the numbers of customers to be reached, and
the variety and quantum of services to be
provided are really large.
It is estimated that 90 million farm holdings,
30 million non-agricultural enterprises and
50 million landless households in India
collectively need approx U.S.$30 billion credit
annually, approximately 5 percent of India's
GDP.
There have been several challenges faced in
delivering solutions in rural India both for the
populace as well as the banks.
Rural credit delivery has been a major area of
concern in the banking sector. Major
initiatives undertaken over the years have not
met with the desired level of success.
Technical Challenges
Some of the key challenges while creating the
application were

The cost for traditional banking in rural
India is very high .

Loan servicing tasks are very expensive for
a rural loan e.g. for a financial institution to
locate a viable prospect, verify the
prospects credit worthiness and assess
collateral can be a time and resource
hungry task.

The prime targeted end users of this
application will be technology challenged.
Also, a small percentage of the villagers
are literate in their regional language.

Third party services such as notarization of
the bank loan documents, collection
agencies for defaulting customers are also
not present
The loan servicing process especially the
credit rating of prospective customers is a big
deterrent to organized micro finance. There is
an urgent need to streamline the credit rating
process to reach out to the rural poor. “A
viable credit rating system will help to
minimize the non-performing assets (NPA) of
the financial institutions. Also, it will help
ensure optimum utilization of funds.
Therefore, we decided to create a technology
based rating system will enable greater
transparency and objectivity,” comments Dr.
S. S. Satchidananda, Research Director,
Center for Banking and Information
Technology, IIIT- Bangalore. This will also
facilitate better data management and
analysis.
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The rural credit delivery system addresses
this problem by improving accessibility and
reducing delivery costs and time frames
The rural credit delivery system will act as
one – stop customer information source for
the banks in the local areas and help them in
arriving at the credit worthiness of the
customers; the system will also act as a front
office for banks to provide credit to the rural
masses.
Solution
As the first step towards improving rural
banking, CeBIT, IIIT-B worked closely with
Microsoft, and its partners to deliver the
solution. This solution envisions a three step
project.

Collection of rural customers’ data using
wireless PDAs and using the data for
creating rural information infrastructure
including banking services.

A model for credit delivery of the rural
people

Feasibility of deploying ATMs for servicing
rural citizens
Design elements
During the evaluation stage, Microsoft
Certified Gold Partner, TCS came up with a
clear list of system requirements, based on
the challenges facing rural banking and
financial services. These requirements have
been incorporated into the solution
architecture as well for each step of the
solution.
Key considerations for the PDA based
data collection application

The system will be used by data collection
agencies to upload and verify the customer
data. It will collate all information including
income, assets, and provide pictorial and
other proof along with the record such as
voice sample for future verification.

Ability to Work in low/no bandwidth: The
ability to work offline will be required, as
the data would be collected at a particular
location and the synchronized with the
central database when Internet access is
available

Printing: Reports must be printable in A4
paper format. Reports should also be
printed in the regional language also.

Audit trail: The audit trail for any
transaction will be stored in the database
leaving no room for corruption or errors.
Rural Credit Delivery Solution

Security: Security will be key; and checks
and balances built to remove any misuse
possible. The common users will be able to
make one transaction for each logon. For
the next transaction they will have to logon
again. Each user will have default idle time
out of 3 minutes which can be configured
to a different value if required. Data can be
moved both ways on a 128 bit encrypted
transaction using RC-2 Encryption protocol.
This is an admin configuration. The PDA
RCDS solution has 4 levels of security. The
PDA has an inbuilt Password security with
9999 combinations to hack and open.
Further to that the PDA Solution has a login
and password stored in the database in
encrypted format. TO synchronize the data
the user has to go to Synchronizer and
enter login / password before being
allowed access.

Performance: The performance for any
transaction will be targeted to be within
five to seven seconds. RCDS
synchronization has three types: normal
data, image and voice synchronization. The
normal data and voice data for a single day
is synchronized in an average of four
minutes.
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ATM Like Machines

Multilingual: As the application will be used
by rural users regional language support is
a must. This will be facilitated by using
Unicode fonts and regional icons. Data
entered into the system will depend on the
keyboard settings. Reference data
displayed in combos will be displayed in
the regional language.

Technology challenged
challenged users: Illiterate
users will be facilitated with a text to voice
synthesizer (Matrubhasha). This will be
incorporated into RCDS

Usability for rural users:
users Icons and labels
will be displayed in the regional language.
Text to Voice synthesizer will provide the
ability to read information.

This system will also be used by bankers
who will be involved in loan, disbursement
and repayment. While the users will
authenticate themselves into the system
and request for transaction processing, the
banking systems will put through the
transactions like the opening of the
accounts, and approval of the loans and
communicate those approvals through the
RCDS. Once this is done, the users can
access the ATMs for depositing and
withdrawing cash for various purposes
from their savings account.
Solution Architecture
The complete solution consists of three major
components. The PDA based solution is for
data collection at the village level. This
information is uploaded to the server-based
rural credit delivery system from where the
user data is accessed by the banks and
financial institutions to process loans. In
addition a kiosk based ATM like solution will
act as the information kiosk for the villagers.
Similarly mobile kiosks could also be used.
Customer Data Collection
IIIT-B created the solution architecture for an
application that authenticates rural each
citizen and his or her assets. ACNielsen was
chosen as the nodal agency to collect the
data for the pilot that included five villages in
Honawar District in Karnataka, which has a
sample size of over 500 families and 20000
individuals.
Microsoft brought in Envision Information
Systems and Technologies Private Limited, a
Microsoft Certified Partner to deliver the
solution the PDA based solution. Envision is a
leading provider of PocketPC based mobile
solutions.
The field staff collected the information using
HP iPaq PDAs using an application for
collecting the requisite information such as
identity of each person along with records
such as birth certificate and photograph; and
supporting information including photographs
of assets (e.g. house, land etc.). This
information is transmitted to the server using
the PDA.
The Microsoft Windows CE 4.0 based
application has three key layers. The
presentation layer of the application provides
a user friendly interface using Windows
Forms developed using Microsoft .NET
Compact Framework 1.1 and C#. The
business rules are encapsulated in the C#
Business Objects.
The application has been developed using
Microsoft .NET Compact Framework 1.1,
while the data layer used Microsoft SQL CE
2.0 as the database. Microsoft ADO.NET has
been used to link the user interface with the
database.
The application also documents all assets
through digital pictures. As the PDA is not
used to take the pictures as the assets and
people are not available at the time of data
collection, an Image mapping component has
to be added to the application. The photos
are mapped to the corresponding asset
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record, the SDF card is taken from the
camera and inserted into PDA. The module
replaces the picture’s file name with the
corresponding assets ID.
Another unique feature of the application is
voice sampling. The respondent voice is
captured for future verification at the time of
capturing the family details. The default
system API is used for recording the voice.
The user can playback the recorded voice for
confirmation.
The PDA connects over the Internet to the
TCS developed rural credit delivery system
(RCDS). SQL CE synchronizes with the central
database, SQL Server 2000 using Web
Services. Here again checks and balances
are maintained. Only records for which all
mandatory data is completed can be
transferred to the central server. The
transferred data will be set as transferred to
avoid redundant data transfer.
Rural Credit Delivery System
The rural credit delivery system (RCDS)
provides a single repository for all customer
related information that banks and financial
institutions require to arrive at the credit
worthiness of the customer.
The application for rural credit rating was
created by TCS. As envisaged by IIIT-B, TCS
created a Web based application that is
accessed using the https protocol. The
presentation layer is accessed using
Microsoft Internet Explorer 6.0. This layer
carries out the validations and authentication
before accepting user inputs. The application
is used by the bank’s front office using
Microsoft Internet Explorer 6.0, after
necessary authorization and validation.
The application is based on Windows Server
2003 Standard Edition with Internet
Information Services 6.0 is the Web server
while the application has been coded in C#
and ASP.NET. The ASP.NET (C#) pages reside
on the Web server, and it calls business
components as per the logic of the
application.
The central database is Microsoft SQL Server
which communicates with the application’s
business logic using Microsoft ADO.NET, the
data-access component of the Microsoft .NET
Framework and ActiveX scripts
The business logic of the application resides
in a separate layer, so as to decouple
presentation and business logic. The
workflow components have been developed
using Microsoft C#. These can also be
configured as per the requirement and
changes in business logic.
TCS used Microsoft SQL Server’s Reporting
Service using Web services. The reports are
exported into PDF and made available in
English as well as regional languages for the
rural population.
Often, software comes across a condition or
an error that causes the program or
microprocessor to branch to a different
routine. This is known as an exception. The
Microsoft Exception Handling Block, a part of
Microsoft .NET Framework 1.1 allows the
developers to handle exceptions, log these
exceptions and then creates policies to
handle exceptions.
By using Microsoft Exception Handling Block
exceptions and creates a consistent strategy
for processing exceptions that occur
throughout the architectural layers.
The application also uses Data Access
Application Block, a feature of .NET
Framework that simplifies common data
access functionality. Applications can use the
application block in a variety of situations,
such as reading data for display, obtaining
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data to pass through application layers, and
submitting changed data back to the
database.
IIT-B envisions that credit will be monitored by
an expert agency either at the bank or
through any self-help group involved in
providing rural finance. It involves the
verification of securities, verification of end-
use of funds and provides an update on the
borrower’s profile.
Feasibility for deploying ATMs in Rural
India
IIIT-B worked closely with Microsoft to create
an integrated multi-entity database system
(IMDS) system, a data hub that is set up for a
cluster of villages. It is connected to the multi-
service delivery system (MSDS), an ATM-like
machine in each village.
The database handles the workflow and
decision-making processes. The IMDS is a
multi-entity database interfacing with multiple
banks. This ensures a two-way connectivity to
the multi service delivery machine that
provides banking, extension and other
services.
The credit rating application will interface
with the ATM to push the customer’s
transactions back into the application.
Benefits
Provides information to investors
The key reason that private banks did not
enter the rural market was the lack of
information. If each bank tries to verify the
creditworthiness of each individual, it will not
be able to sustain the business as the cost
per transaction will make it unviable.
Therefore, a centralized credit rating system
will provide the information to banks and
other service providers to enter the rural
market,
Improves credit flow
With information availability, the banks can
create specific plans and allocate funds for
the rural sector. This will help improve the
agriculture based economy the living
standards of rural India.
Reduces costs
A central information store helps the banks to
reduce the cost of doing business, thereby
making it a more feasible business option.
The solution itself minimizes costs because
there is no need for additional licensing costs
for database, reporting services or for other
components. “Wherever possible, the project
uses reusable components and standards
such as Microsoft interoperability standards
based on Web Services supported by
Microsoft .NET framework”, says Dr. S. S.
Satchidananda, Research Director, Center for
Banking and Information Technology, IIIT-
Bangalore.
High Security
The secure hypertext transfer protocol
(HTTPS) is a communications protocol
designed to transfer encrypted information
between computers over the Internet, this
has been deployed for higher security. Also,
an audit trail of every transaction is
maintained, which ensures that the solution
is tamper proof. In addition, the application
stores the workflow to maintain the
authenticity of data.
Forms authentication is used to restrict user
access.
Local Language Support
Rural India has a large percentage of
uneducated people. For them, banking
services will be a new phenomenon. To avoid
another breed of middlemen and touts, it is
important that the service is simple and can
be used by the villagers. For this, the
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application will provide text to voice
synthesizer as a browser plug-in.
In addition, Microsoft .NET Framework 1.1
and SQL Server 2000 support Indian
languages that will allow reports to be
generated in rural language for customers
and banking staff.
Ideal for low bandwidth situations such
as rural India
The solution has been built to function in
either offline mode where there is no internet
access and in other instances, it ensures that
data integrity is maintained in low bandwidth
situations. For example, in case the
connection drops during transfer, the server
records the point at which the connection
was terminated, thereby lowering
redundancy.
Future Plans
The centralized database will eventually
provide access to the multiple banks through
suitable linkages.
The aim is that the rural populace should be
able to avail the multi-service delivery system
for all their banking requirements. The MSDS
will be connected to the nearest IMDS. The
IMDS itself is part of a grid, which is
envisaged to eventually provide nation-wide
connectivity.
The database system will be able to query
other databases such as Bhoomi land
records, etc. for their services.
The IMDS is the engine that powers all
banking transactions made from any MSDS.
It is independently supported and reliably
sourced - to provide up-to-date data on all
aspects affecting credit delivery. This
includes transaction data in the form of user
accounts. It also acts as a crucial information
source for analytical activities and decision
support systems. Since a single IMDS
database may not be scalable, the long-term
strategy is to model the IMDS in the form of a
grid, comprising of several data centers. Each
data centre will also provide specific
geographical data and be accessible to every
2,00,000 citizens.
This program will also be integrated with
Microsoft’s rural kiosk initiative, called
Saksham. The Saksham kiosks will become
an extension to this program and will be used
for delivering information to the villagers, and
will become an additional channel for data
collection and processing transactions.
About Envision Information Systems
Envision Information Systems was started in
2002 with a mission of enabling enterprises
to seamlessly access and process
information anywhere, anytime.
Our entire value proposition at Envision
Information Systems stems from the fact that
we are able to convince enterprises to extend
their existing IT systems into the field and
leverage more out of it by using Mobile
Computing Solutions for their field force.
At Envision, our focus has always been on
customers with a large concentration of
Mobile salesforce. With our end-to-end
Mobile Computing thrust, we are a one-stop-
shop for enterprises for their Mobile
Computing needs. And Mobile Computing
being an emerging technology, enterprises
feel comfortable with a single point of
accountability.
Our customers across Industry verticals such
as Tata-AIG General Insurance, Ranbaxy
Laboratories, Pfizer, AC Nielsen, Deloitte
Consulting to name a few for enterprise
mobile business solutions.
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For More Information
For more information about Microsoft
products and services, call the Microsoft
Sales Information Center at 1600 111100.
To access information using the World
Wide Web, go to:
http://www.microsoft.com/india/
For more information about IIIT-Bangalore
and CBIT products and services, visit the
Web site at: www.iiit.ac.in
Microsoft .NET
Microsoft .NET is software that connects
people, information, systems, and devices
through the use of Web services. Web
services are a combination of protocols that
enable computers to work together by
exchanging messages. Web services are
based on the standard protocols of XML,
SOAP, and WSDL, which allow them to
interoperate across platforms and pro-
gramming languages.

For more information about Envision
information Systems products and
services, call (91) (44) 2814 3036 visit the
Web site at: www.envision-india.com
.NET is integrated across Microsoft products
and services, providing the ability to quickly
build, deploy, manage, and use connected,
secure solutions with Web services. These
solutions provide agile business integration
and the promise of information anytime,
anywhere, on any device.

For more information about Microsoft

.NET and Web services, please visit these
Web sites:
www.microsoft.com/net
msdn.microsoft.com/webservices

Software and Services Hardware

Products
HP iPaq Pocket PC
− Windows Server 2003 Standard
Edition Partners
− SQL Server 2000 Standard edition
Microsoft

Technologies
Envision
− Microsoft .NET Framework
TCS
− Microsoft ADO.NET
− Microsoft ASP.NET
− C#
− ActiveX
© 2005 Microsoft Corporation. All rights reserved. This case
study is for informational purposes only. MICROSOFT MAKES NO
WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
Microsoft, Microsoft .NET, the Windows logo, Windows Server,
and Windows Server System are either registered trademarks or
trademarks of Microsoft Corporation in the United States and/or
other countries. The names of actual companies and products
mentioned herein may be the trademarks of their respective
owners.
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Document published November, 2005