BRANCH LESS BANKING IN PAKISTAN

Acknowledgment
We here by t ke th!" o##ort$n!ty to th nk K r ch! $n!%er"!ty &or #ro%!d!ng $" n o##ort$n!ty to do re"e rch #ro'ect on br nchle"" b nk!ng !n P k!"t n( W e e ) # r e " " o $ r " ! n c e r e g r t ! t $ d e t o o $ r m e n t o r n d g $ ! d e * + , m Aye"h who lw y" #ro%!ded $" w!th nece"" ry In#$t"* g$!d nce nd d!rect!on to c rry o$t th!" #ro'ect( They #ro%!ded $" cce"" to d!&&erent dom !n" o& knowledge &rom where we collected !n#$t" &or th!" #ro'ect( I+P-RTANCE -. THIS ST/01 The "t$dy w!ll not only "$&&!ce the need o& o$r co$r"e re2$!rement r ther !t w!ll be hel#!ng !d &or other re"e rcher"* &!n nc! l !n"t!t$t!on" "$ch " m!cro &!n nce b nk" nd the cell$l r com# n!e" to ed$c te them"el%e" " to wh t re " re l gg!ng nd $nre ched( +oreo%er* !t w!ll l"o be bene&!c! l &or the bo%e ment!oned to g $ge the!r "er%!ce" nd $"er -B3ECTI4E -. -/R RESERCH 5(Com# r t!%e n ly"!" on grow!ng $"e 6 e)# n"!on o& br nchle"" b nk!ng !n P k!"t n(

BANKING

BRANCH BANKING

BRANCHLESS BANKING -##ort$n!t!e"9

:( ;( <( =( >(

R$r l -$tre ch C "hle"" Economy Incre"e !n G0P Incre "ed Em#loyment Co"t 6 T!me " %!ng 4 r!ety -& +ode" to o&&er
Go%ernment to Peo#le Peo#le to Peo#le ?P:P@ Con"$mer to B$"!ne"" ?C:B@ Business to Business (B2B) Business to Consumers (B2C)

0$e to the com#le)!ty* $n w rene"" 6 h$ge t!me con"$m#t!on o& Br nched B nk!ng Sy"tem & ced by both /rb n 6 R$r l Po#$l t!on o& P k!"t n* Br nchle"" B nk!ng c n o&&er new dyn m!c" &or !ncre "!ng more #eo#le o$tre ch long w!th low t!me $t!l!7 t!on nd o&&er!ng w y" to !ncre "e G0P* Em#loyment nd d!rect go%ernment l cont ct w!th % "t #o#$l t!on "te##!ng tow rd" "ec$re c "h8c "hle"" economy

BRANCHLESS BANKING IN PAKISTAN INTR-0/CTI-N

Br nchle"" B nk!ng ?BB@ re#re"ent" "!gn!&!c ntly che #er ltern t!%e to con%ent!on l br nchAb "ed b nk!ng th t llow" &!n nc! l !n"t!t$t!on" nd other commerc! l #l yer" to o&&er &!n nc! l "er%!ce" o$t"!de tr d!t!on l b nk #rem!"e" by $"!ng del!%ery ch nnel" l!ke ret !l gent" mob!le#hone etc (BB c n be $"ed to "$b"t nt! lly !ncre "e the &!n nc! l "er%!ce" o$tre ch to the $nAb nked comm$n!t!e"(

HIST-R1
/n!ted K!ngdom !" n e rly #!oneer o& Br nchle"" b nk!ng "er%!ce ( L $nched by +!dl nd B nk ?now # rt o& HSBC@ !n 5BCB* .!r"t d!rect cco$nt" re o#er ted "olely %! the Internet * #o"t* or tele#hone* nd they do not them"el%e" o#er t e ny rett !l br nche" ? ltho$gh HSBC br nche" c n be $"ed tom ke de#o"!t"@ wh!le t the " me t!me o&&er!ng &$ll r nge o& b nk!ng "er%!ce"(

INTR-0/CTI-N T- BRANCHLESS BANKING IN PAKISTAN

DIn + rch :EEC* the St te B nk o& P k!"t n !ntrod$ced "ome o& the &!r"t reg$l t!on" nywhere !n the world de"!gned "#ec!&!c lly to enco$r ge br nchle"" b nk!ng( The reg$l t!on" llowed n$mber o& d!&&erent b$"!ne"" model" nd #erm!tted gent" to del!%er &!n nc! l "er%!ce" on beh l& o& b nk"( P k!"t n !" one o& the &ew co$ntr!e" !n the world where br nchle"" b nk!ng took o&& " re"$lt o& the br nchle"" b nk!ng reg$l t!on" !""$ed by the SBP !n + rch :EEC( DP k!"t n !" becom!ng one o& the co$ntr!e" w!th tremendo$" growth !n the de%elo#ment o& br nchle"" nd mob!le b nk!ng( D The br nchle"" nd mob!leAb nk!ng re #enetr t!ng t cceler ted # ce thro$gho$t the co$ntry w!th n$mber o& #l yer" !n the b nk!ng nd cell$l r #hone o#er tor" re enter!ng !nto the emerg!ng &!n nc! l "ector( DIn + rch :EEC* the St te B nk o& P k!"t n !ntrod$ced "ome o& the &!r"t reg$l t!on" nywhere !n the world de"!gned "#ec!&!c lly to enco$r ge br nchle"" b nk!ng( The reg$l t!on" llowed n$mber o& d!&&erent b$"!ne"" model" nd #erm!tted gent" to del!%er &!n nc! l "er%!ce" on beh l& o& b nk"( P k!"t n !" one o& the &ew co$ntr!e" !n the world where br nchle"" b nk!ng took o&& " re"$lt o& the br nchle"" b nk!ng reg$l t!on" !""$ed by the SBP !n + rch :EEC(

DThe o%er ll tr n" ct!on" thro$gh br nchle"" b nk!ng h %e re ched ;*FEE #er d y( There re 5F*<<C br nchle"" b nk!ng gent" "er%!ng c$rrently more th n ;=F*=BC cco$nt" t the!r d!&&erent o$tlet"(
5

DP k!"t n !" becom!ng one o& the co$ntr!e" w!th tremendo$" growth !n the de%elo#ment o& br nchle"" nd mob!le b nk!ng( DT mer +!cro &!n nce B nk nd G-mn!H by /n!ted B nk L!m!ted nd m rked "$cce"" "tory w!th "# n o& '$"t three ye r" n dd!t!on to them* there re d!&&erent b nk" nd mob!le o#er tor" h %e !ntrod$ced the!r br nchle"" b nk!ng "er%!ce" "$ch " .!r"t Recently -r!"on Telecom ?+ob!l !nk@ h " l"o obt !ned l!cen"e to e"t bl!"h n t!onAw!de +!cro &!n nce B nk n mely W "!ll +.B to "t rt m!cro &!n nce o#er t!on" thro$gh br nchle"" b nk!ng #l t&orm(S!m!l rly* NA0RA h " de"!gned d!"tr!b$t!on #l t&orm $nder the br nd n me GeAS $ltI to #ro%!de onl!ne # yment nd collect!on & c!l!ty &or the gener l #$bl!c " well " &or org n!7 t!on"( In recent CGAP br!e&* P k!"t n h " been "howed " one o& the & "te"t de%elo#!ng m rket &or br nchle"" b nk!ng !n the world( P k!"t n h " been decl red " l bor tory o& !nno% t!on &or br nchle"" b nk!ng w!th % r!ety o& b$"!ne"" model" re emerg!ng th t !n%ol%e" w!de r nge o& #l yer"* !ncl$d!ng mob!le network o#er tor" ?+N-"@* technology com# n!e"* nd e%en co$r!er b$"!ne""( The World Econom!c .or$mH glob l re#ort on +ob!le .!n nc! l Ser%!ce" g %e e)ten"!%e co%er ge o& P k!"t n* #r !"!ng the co$ntry &or !t" & "t de%elo#!ng br nchle"" b nk!ng(

Facilities offered by Branchless Banking System

5( -#en!ng nd m !nt !n!ng BB Acco$nt :( Acco$ntAtoA cco$nt .$nd tr n"&er

;( Per"onAtoA#er"on .$nd Tr n"&er" <( C "hA!n nd C "hAo$t =(B!llP yment" >( +erch ntP yment"
!a"or Branchless Banking Ser#ice $ro#iders in $akistan

+ rketLe der"!nBr nchle""B nk!ng9 5(E "yP !" ?Tele#ort!ncoll bor t!on w!thT mer +!cro &!n nce b nk :( -mn! Sho# ?/BL@

T mer +!cro &!n nce B nk L!m!ted w " e"t bl!"hed !n K r ch!* P k!"t n d$r!ng Se#tember :EE=( The b nk," he d2$ rter" re on Sh h r hAeA. !" l w!th br nche"* " le" center"* comm$n!ty center" nd +ob!le B nk!ng o$tlet" "#re d thro$gho$t P k!"t n( In order to "er%!ce !m#o%er!"hed $rb n* #er!lA$rb n nd r$r l re "J #ro%!d!ng &$ll "#ectr$m b nk!ng to the common m n on the "treet* nywhere cro"" the n t!on* :< ho$r" d y( In :EEB* T mer B nk # rtnered w!th Telenor* !n the B nkALe d model* $nder the St te B nk o& P k!"t n,"* Br nchle"" B nk!ng Reg$l t!on"* to br!ng e "y# !" J m "" m rket +ob!le B nk!ng Ser%!ce* o&&er!ng +ob!le Acco$nt"* +oney Tr n"&er nd /t!l!ty B!ll # yment( T meer B nk !" m 'or!ty owned by Telenor( 5EK by the

Intern t!on l .!n nce Cor#or t!on ?I.C@ o& the World B nk Gro$# nd the re"t by the .o$nder* Pre"!dent nd CE- +r( N deem H$"" !n nd Gro$#( Some o& the !nno% t!on" en cted !n the # "t &!%e ye r" h %e been9 5"t B nk A Br nchle"" B nk!ng L!cen"e !n P k!"t n :EEC &rom the St te B nk o& P k!"t n( 5"t B nk to l $nch Comm$n!ty B nk!ng +!cro .r nch!"!ng on GPRS Tr n" ct!on Network" !n P k!"t n( St rted on Bh!t I"l nd K r ch! nd S#re d thro$gho$t P k!"t n( 5"t B nk !n P k!"t n* to P rtner w!th Telenor( -ne o& the World" L rge"t Telecom Pro%!der nd Norweg! n Leg cy( To #ro%!de B "eAo&APyr m!d B nk!ng to + "" Po#$l t!on" !n P k!"t n* &or P$bl!c Sector Ch nge thro$gh +ob!l(

5"t B nk to l $nch .!nger Pr!nt AT+H" Loc lly + n$& ct$red 5"t B nk o&&er!ng :< Ho$r* .$ll Br nch -#er t!on"( + rch :EEB t K r ch! .!"her!e" to ccommod te the :< Hr" .!"h!ng Tr de 5"t Pr!% te B nk to o&&er Lo n g !n"t Emergency !n : Ho$r"(.!r"t B nk !n P k!"t n to r$n b nk!ng nd mob!le b nk!ng ##l!c t!on" !n #r!% te %!rt$ l clo$d" cre ted !n the B nk," Pr!m ry nd Second ry "!te"( S!nce :EEC 4!"!on To emerge " glob l benchm rk &or !nno% t!%e nd commerc! lly %! ble m!cro &!n nce "ol$t!on" to the $nb nked &or the!r "oc !oAeconom!c em#owerment(

&

+!""!on To "et new "t nd rd" o& e)cellence !n % l$e dded m!cro&!n nce nd rel ted "er%!ce" thro$gh !nno% t!%e technology nd h!ghly "k!lled8#ro&e""!on l "t && &or c$"tomer con%en!ence nd " t!"& ct!on(

E2$ l -##ort$n!ty +er!tocr cy Inno% t!on Integr!ty Re"#ect

'

E "y# !" A +oney Tr n"&er /"!ng +oney Tr n"&er &rom e "y# !" * yo$ c n now "end nd rece!%e money to nd &rom & m!ly* &r!end"* etc &rom ny e "y# !" "ho# !n the mo"t e&&!c!ent* "ec$re nd con%en!ent w y( 1o$ do not h %e to own Telenor connect!on* nor do yo$ need to h %e mob!le #hone t ll( The be"t th!ng bo$t the "er%!ce !" th t ny #er"on !n P k!"t n c n $"e th!" #rod$ct nd th t no reg!"tr t!on !" re2$!redL Any #er"on w!th need to "end money &rom one c!ty to nother c n $"e th!" "er%!ce &rom ny e "y# !" "ho#( .or e) m#le* ho$"ehold "t &&* dr!%er"* g$ rd"* etc( c n ll now "end the!r monthly " l r!e" home to the!r & m!l!e" &rom $rb n c!t!e" to r$r l %!ll ge"( S!m!l rly* # rent" c n "end &$nd" to the!r ch!ldren t ed$c t!on l !n"t!t$t!on" !n other c!t!e" &or t$!t!on &ee* monthly #ocket money etc( And #eo#le who tr %el &re2$ently* who don,t w nt to c rry c "h c n $"e th!" "er%!ce " Tr %eler" Che2$e" by "end!ng money to them"el%e" &rom one c!ty nd collect!ng the money !n nother c!ty(

E "y # !" o&&er" two k!nd" o& "er%!ce"9 5-%erAtheAco$nter ?-TC@ #rod$ct"9 where the c$"tomer c n go $#to ny o&the ==EE #l$" cert!&!ed merch nt" &or &!n nc! l tr n" ct!on" :+ob!le #rod$ct"9 Where the c$"tomer c n $"e the!r mob!le h nd"et &or &!n nc! l tr n" ct!on"(
1(

/n!ted B nk L!m!ted ?/BL@ !" one o& the l rge"t commerc! l b nk" !n P k!"t n h %!ng more th n 5*::E onl!ne br nche" !n"!de the co$ntry( It" 5= br nche" o$t"!de the co$ntry re !n the /n!ted St te" o& Amer!c * M t r* /AE* B hr !n* nd Re#$bl!c o& 1emen( It l"o h " re#re"ent t!%e o&&!ce" !n Tehr n* Ir n* nd Alm ty* K 7 kh"t n( It own" "$b"!d! r!e" !n the /K ?/n!ted N t!on l B nk L!m!ted@* nd !n N$r!ch* Sw!t7erl nd( Agh H " n Abed! &o$nded the b nk !n 5B=B( In 5BF5 the Go%ernment o& P k!"t n n t!on l!7ed the b nk( In :EE:* the Go%ernment o& P k!"t n "old !t !n n o#en $ct!on to con"ort!$m o& Ab$ 0h b! Gro$# nd Be"tw y Gro$#( In :EE: the b nk merged !t" o#er t!on" !n the /K w!th tho"e belong!ng to N t!on l B nk o& P k!"t n to &orm /n!ted N t!on l B nk L!m!ted( /n!ted B nk own" ==K o& the 'o!ntA%ent$re nd N t!on l B nk o& P k!"t n own!ng the rem !nder(

4ISI-N
To be world cl "" b nk ded!c ted to e)cellence* nd to "$r# "" the h!ghe"t e)#ect t!on" o& o$r c$"tomer" nd ll other "t keholder"
11

+ISSI-N
Set the h!ghe"t !nd$"try "t nd rd &or 2$ l!ty* cro"" ll re " o& o#er t!on* on "$"t !ned b "!" -#t!m!7e #eo#le* #roce""e" nd technology to del!%er the be"t #o""!ble &!n nc! l "ol$t!on to o$r c$"tomer" Become the mo"t "o$ght &ter !n%e"tment* nd Be recogn!7ed " the em#loyer o& cho!ce /BL -mn! now br!ng" ho"t o& b nk!ng "er%!ce" to yo$r ne re"t O0$k nO( /BL -mn! 0$k n" re loc ted !n more th n >EEP c!t!e" nd town" cro"" P k!"t n( Th!" !" m 'or m!le"tone !n the e%ol$t!on o& b nk!ng th t w!ll re"h #e the tr d!t!on l b nk!ng model by o&&er!ng b "!c b nk!ng "er%!ce" cro"" $rb n nd r$r l P k!"t n* well beyond the reg$l r br nch network" o& b nk"( Peo#le w!tho$t /BL -mn! b nk cco$nt w!ll l"o be entert !ned t /BL -mn! 0$k n where they c n m ke $t!l!ty b!ll # yment"* "end or rece!%e money* #$rch "e mob!le c rd %o$cher" nd m ke #o"t# !d mob!le b!ll # yment"(

BRANCHLESS BANKING

H!"tory
12

5(/BL de%elo#ed

%!"!on o& G +ob!le W lletI !n :EE=

:(.!r"t +ob!le W llet !n So$th A"! w " rolled o$t by /BL !n :EEF $nder the br nd n me o& G-r!onI( ;( S!nce no reg$l t!on" e)!"ted t th t #o!nt to co%er th!" #rod$ct* SBPH" role " n ct!%e nd "$##ort!%e # rtner !n th!" !n!t! t!%e w " e)tremely cr!t!c l &or o$r "$cce"" <( Br nchle"" B nk!ng reg$l t!on" were !ntrod$ced by SbP !n :EEC =(/BL "t rted de%elo#!ng the "ol$t!on to del!%er com#rehen"!%e Br nchle"" b nk!ng "er%!ce !n l!ne w!th the reg$l t!on"( >(L!cen"e &or P!lot l $nch w " rece!%ed !n Se# :EEB F(L!cen"e &or Commerc! l l $nch rece!%ed !n .eb :E5E Why de%elo# !n ho$"e "ol$t!onQ 5(GBr nchle"" 8 +ob!leI b nk!ng !" %ery new b$"!ne"" nd ther e re no Gm t$reI b$"!ne"" model" ro$nd the world th t c n be re#l!c ted :(At the " me t!me we l"o bel!e%e th t there re tremendo$" o## ort$n!t!e" th t e)!"t o$t there ;(Ty#!c l o&& the "hel& "ol$t!on" re de%elo#ed b "ed on the %end or" %!"!on ro$nd th!" b$"!ne"" nd th t !" #r!m r!ly b "ed on the need" !n the!r own m rket

13

<(H %!ng o$r own "ol$t!on llow" $" to !ntrod$ce new &e t$re" nd #rod$ct" lmo"t on the go w!tho$t h %!ng to go to ny th!rd # rty 5( The &le)!b!l!ty nd n!mblene"" th t n !n ho$"e "ol$t!on o&&er" $" !" b"ol$tely #r!cel e"" t th!" "t ge o& b$"!ne"" m t$r!ty(

14

Wh t "er%!ce" c n be o&&eredQ
5( A8c o#en!ng :( C "h de#o"!t 6 w!thdr w l" ;( B!ll" # yment" A/t!l!t!e" nd cred!t c rd" nd Lo n"* "chool &ee"* go%ernment d$e" etc( B!ll # yment" c n be &or 8c holder" " well " &or c "h c$"tomer" <(.$nd tr n"&er" Adome"t!c nd Intern t!on l rem!tt nce" =( Lo n d!"b$r"ement" >( A!r t!me %end!ng A 8c holder" nd c "h c$"tomer" F( P:P ? dome"t!c 6 !ntern t!on l rem!tt nce"@ C( P:B ?o%er the co$nter # yment"* b!ll # yment"* "chool &ee"* t!cket"* home del!%ery etc@ B( B:B ?electron!c c "h m n gement@ 5E( B:P ? S l ry d!"b$r"ement"@ 55( G:P ?Go%ernment d!"b$r"ement" l!ke W.P* BISP@

15

Ch nnel" &or C$"tomer" 8 Agent" 5( Agent "y"tem ? PC nd +ob!le .ront End@ :(S+S ;( WAP <( Internet on PC =( C ll Centre ?I4R 6 Agent b "ed@ >( AT+ ? ""oc! ted 4!" 0eb!t C rd@ F( Br nch Network ?!ntegr ted w!th Core b nk!ng@C( /SS0 ?!n #rogre""@

Agent Network nd Ch llenge" 5(A ty#!c l ret !l gent &or $" !" "omeone who !" r$nn!ng "m ll "ho# nd !" look!ng to e rn dd!t!on l !ncome by c #!t l!7!ng on the e)!"t!ng &oot tr &&!c !nto h!" o$tlet " well " gener t!ng dd!t!on l &oot tr &&!c( A ty#!c l gent !ncl$de"9 RB ker!e" nd Gener l "tore" R+ed!c l nd gener l "tore" RCom#$ter nd mob!le "er%!ce" "ho#" RElectron!c" "ho#" RBo$t!2$e" nd PC-H" RS$#er "tore" nd tr %el gent" :( B$!ld!ng Gret !l gentI network !" not ty#!c l "trength o& L rge commerc! l b nk( Howe%er* we h %e cce#ted th!" ch llenge nd "o & r th!ng" look good(
1

We h %e e"t bl!"hed e" nd town"

"e!7 ble network cro"" more th n 5EE c!t!

;(+ n g!ng the gent network &rom control" nd com#l! nce #er "#ect!%e w!ll be ch llenge(We h %e "et $# ded!c ted te m &or c2$!r!ng nd m n g!ng the gent" on d !ly b "!" We c n m!t!g te cert !n ch llenge" thro$gh "y"tem" -ther" w!ll h %e to be de lt w!th " we le rn nd e%ol%e( <(Another m 'or ch llenge th t w!ll need to be m n ged %ery c r e&$lly !" the L!2$!d!ty t the ret !ler loc t!on( =(Intero#er b!l!ty o m )!m!7e the bene&!t" o& m$lt!#le gent netw ork" e"t bl!"hed by % r!o$" b nk" RESEARCH 0ESIGN Th!" re"e rch w!ll be 2$ l!t t!%e " well " 2$ nt!t t!%e !n n t$re w!th #o#$l t!on con"!"t!ng o& !nd!%!d$ l" l!%!ng nd work!ng w y &rom home or h %e the re"#on"!b!l!ty to &!n nc! lly "$##ort the!r & m!ly ?!e"@ Po#$l t!on In th!" re"e rch* the t r g ted #o#$l t!on !" b nk" o& P k!"t n nd telecom org n!7 t!on"( S m#le nd d t collect!on

1%

W!th re"#ect to d t collect!on* we h %e cho"en the "t$dent"* em#loyee" nd #ro&e""!on l(

L!"t o& t r g ted b nk" $"!ng br nchle"" b nk!ng 5( /n!ted b nk l!m!ted* /BL omn! :( T mer b nk* e "y # !" nd A" " h ;( A"k r! b nk* B nk TelcoH 34 rr ngement( <( B nk l& l h* w r!d telecom =( H b!b b nk l!m!ted BANKS WH- ARE N-T -..ERING BRANCHLESS BANKING "t nd rd ch rtered All!ed b nk l!m!ted $n!ted b nk l!m!ted KASB b nk c!ty b nk # k!"t n

5( :( ;( <( =(

S m#le "!7e We "elected ll tho"e b nk" o&&er!ng br nchle"" b nk!ng* b nk" who re w!ll!ng to o&&er br nchle"" b nk!ng nd l"o tho"e who re not o&&er!ng br nchle"" b nk!ng(
1&

1'