Smartcard for Bhajiwalis

Come 2003 and you can walk to the nearest PCO wallah, flash your 32-KB chip,

and complete your banking transaction. Hold on, if you thought this was some new

service that banks in India are going to launch. Thank the department of

information technology (DIT) and the Reserve Bank of India instead, which plans

to roll out these services as part of its financial application based pilot

project for smart card implementation in India. In fact, the RBI has also

decided to issue a special directive thereby enabling 22,500 PCOs across the

country to act as multifunctional service delivery points (SDPs). As per the

earlier RBI guidelines, only banks can function as SDPs. However, the decision

to amend this rule was taken keeping in mind the high penetration and

accessibility factors of PCOs that is essential for the success of this roll

out.

Also, in case you thought this would be some kind of a premier service for

those who have all, you are in for another surprise.

The project is primarily aimed at benefiting the poorest of the poor–a

bhaji wali for instance, can go to any of these PCOs authorized by the banks as

an outlet, and complete her transaction. She may chose to pay back her loan on a

daily basis, instead of the normal monthly EMI that usually is difficult to pay

for most people below the poverty line.

According to IT secretary Rajeev Ratna Shah, the pilot project is expected to

launched across 63 cities in the country by early next year. The e-purse project

is part of the multi-functional smart card project under active consideration by

the ministry, wherein a single smart card can be used for a host of applications

like driving licenses, electricity and water bills, or even taxes; and

simultaneously can also be used as an e-purse. However, the pilot project will

see only the e-purse function being activated, other utilities like driving

license, or payment of pensions using the same card to trigger off after the

completion of the pilot, circa 2004.

Sources in DIT also revealed that while a broad consensus has already emerged

during the October 31, 2002 meeting of the inter-departmental committee on the

guidelines that would determine smart cards operation parameters, the Smart Card

initiative committee (SCIC) is currently busy sorting out complicated issues

like standards and specifications for smart cards and terminals. It is also

working on cryptography issues, standards for interface and issues related to

interoperability.

According to a senior official in DIT, the committee needs to address these

issues in advance in order to ensure that once the project is rolled out vendors

do not start shipping products that are unable to talk to each other.

The inter departmental committee, including RBI, Institute for Development

and Research in Banking Technology (IDRBT), IBA, Election Commission of India,

Ministry of Finance, Indian Railways, Ministry of Surface Transport, Bureau of

Indian Standards and also representatives from the Army, IT industry, smart card

forum and IIT also agreed that all banking and financial application related

smart cards need to be secured using PKI-based system. However, members of the

committee also agreed to the need for setting up a key management infrastructure

for non-PKI multi application smart cards. According to sources, the SCIC has

recommended that while PKI enabled Smart Cards should be used during the initial

period, the issue of setting up a key management agency for symmetric cards

should be reviewed later.

The committee also discussed the ID number schema proposed by a sub-committee

under the chairmanship of Dr Vivek K Agnihotri, Additional Secretary,

DAR&PG. Based on the sub-committee’s report, SCIC also recommended that

while the ID number should be non-significant, the issuing office number should

definitely be part of the ID number. Keeping a provision for 9999 centers, the

SCIC has also decided to have a 12-digit ID number with 4 digits for the issuing

office number and 8 digits for the person’s ID. This, according to a committee

member, is also aimed at reducing the ID number size from 16 to 12 digits. Other

information like place of birth, state or village code will be kept as fields of

record.

According to V B Taneja, senior director, DIT and director of the smart card

project, the pilot project proposes to upgrade 22,500 PCOs to act as

multifunctional service delivery points (SDPs) having smart card-based payment

systems and acting as franchises of various banks. Each PCO booth would be

upgraded with a telephone terminal, an Internet appliance, and two pocket sized

e-purse-only terminals. The respective PCO owners will have accounts with a bank

where they will deposit the cash thus collected, and will be paid a service

charge in lieu. Industry sources reveal that while the price of a 32-KB smart

card is around Rs 200, an offline card reader can be cost around Rs 18,000,

depending on individual vendors and systems integrators.

The committee has also suggested that the smart card reader should be an

offline. This explains Taneja, will help bypass the capital investment that an

online device would entail. It would have two slots–one for the user’s smart

card, and the other for the owner’s smart card. SCIC has also recommended that

two types of interoperable cards with PKI–full function debit and e-Purse-only

cards be deployed for the project.

Talking about back-end requirements for such an implementation, MD of Smart

Chip and a member of the SCIC Sanjeev Shriya says, "It could be anything–from

Oracle / DB2 or UNIX, but they would be platform-agnostic." However,

neither the Government of India nor DIT would be providing any financial support

or subsidy for the pilot. The DIT is involved only to the extent of coordinating

and handholding as far as the project is concerned. Nitty-gritty of usage,

revenue, and RoI would rest exclusively upon the respective state governments.

Capital costs of smart card related technologies, central systems, and system

management and operations would be borne by an operating industry consortium

that would manage the project.

According to Shah, the total duration of the trial run or the pilot would be

11 months. While the committee has recommended that the deployment phase should

be completed by the end of FY 2002-03, sources in the ministry point out that a

project of such magnitude may suffer several unforeseen snags and specific

details like the roll out time may change drastically. A cautious Taneja agrees

and suggests that the final shape of the project will be announced soon.

"The outline of the project and the reports of the various smart card

committee meetings have been posted on the ministry of information technology

website for suggestions from the smart card industry and the masses. Let us

evaluate these suggestions first, only then will we be in a position to formally

announce it," he adds.

Shubhendu Parth and Sudarshana

Banerjee