Cash Handling - Allowing BCs to handle cash is the biggest challenge. 99% of the financial transactions are in cash, warranting high-cost cash-handling operations and added operational risks
Irregular Accounting - Irregularities have been observed in accounting of clients withdrawals and deposits by BCs and as a result there are delays in accounting the banking transactions with the Bank by the BC.
Clint Profile - Recipients of BC services are mostly illiterate and unfamiliar with technology rendering them susceptible to misguidance by the BCs.
fraud & Misappropriation - Since the BCs' staff operate individually without any line supervision, the risk of fraud and misappropriation is higher.
Inactive No Frills Accounts' - The majority of No Frill Accounts opened by BCs are not operational. In some locations that have achieved 100% financial infusion, the accounts in use have been less than 25%.
Model Viability -There's a shortage of funding to BCs for meeting the group promotion costs in the case of SHG-Bank linkage models.
BCs losing Money - Initial losses are for many BCs to shut their operations. Business continuity risk in such cases is impacting banks adversely
Interest Capping- Reaching unbanked areas warrants higher delivery costs and the rate cap doesn't allow much room for banks to recover the costs necessary to extend credit to hard-to- reach areas and in small amounts.
Distance Criteria - Banks do not always find it easy to get service area waivers from District-level Committees which are necessary to operate in certain areas.
Cash Settlement - Current regulations mandate BCs to complete accounting and settle cash with bank branches within 24 hours of transaction.
Volume of financial transactions from CBS system and from BCA’s for monthly billing.
Screen multiple suspicious transactions in single account
Capture non financial activities like Collecting, Preliminary processing of loan applications for example: verification of person’s identity, home-address etc, Self Help Groups to get loans, collect EMIs and recover loan money.
Collect data at branch level about activities assigned, status of work completion etc. assigned by branch for billing and keep track of BC’s performance.
Track cash in hand for processing cash handling fees.
Automated checks and constraints to find irregular transactions
Keep checks on funds allocated and BCA agreement renewal, activities status at corporate office level.
Automated billing based on agreement rates and transactions done.
Generation of office note for payment approval, detailed information about rejected transactions, payment approval and intimation to RO’s about amount approved in every billing cycle.
Various MIS reports like region wise FI penetration, funds usage on individual activities etc.,
Use BI on historic data to enhance business
Frauds & Checks
Cross Verify CBS : Cross verify CBS transactions with BC billing information for total transactions count to find inflated billing.
ISAT : Identify self account transactions / related account transactions using known BC account numbers
Cash in Hand : Calculate exact cash in hand to arrive at cash handling charges/ avoid misuse of funds
Check History : Screen customer accounts transacted history to identify suspicious transactions in particular account by account number
Targets : Keep track of targets assigned to achieved ratio to arrive at future agreement and remuneration negotiations
Track Performance : Track funds availability, BC’s performance, FI target growth etc.