Nexus of Good: Transition to novelty

Technology can transform governance and make life easy for the common man. The question is not about the availability of technology, it is about the attitude of those who have to first appreciate its relevance and then pour in their "courage" to use it. Chandra Kant Kamble, a young IAS officer, did the same in an archaic and conservative organisation.

Tamil Nadu Power Finance and Infrastructure Development Corporation Ltd. (TNPFC) was incorporated in 1991 as a wholly-owned state public sector undertaking and was registered as a Non-Banking Finance Company (Deposit). TNPFC started with a capital of Rs 99 lakh. The deposits grew to Rs 33,000 crore by 2019. The company mobilises funds primarily through public deposits and has been funding Infrastructure projects undertaken by Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO). As of March 31, 2021, the company's paid-up capital was Rs 3,767 crore. TNPFC has been a profit-making company since its inception.

The total financial assistance provided to TANGEDCO for power generation and related projects by way of long-term and short-term loans is Rs 1.56 lakh crore. The net loan outstanding from TANGEDCO stood at Rs 39,984.79 crore on March 31.

Fixed deposit service offerings

Fixed deposits are mobilised from the public, institutions, government departments and state government schemes like cash incentive schemes, bread-winning schemes, Chief Minister's Girl Child Protection Scheme, Oru Kala Pooja Scheme and Covid 19 Scheme. The average interest rate offered by the company is 150 basis points more than the rates provided by public sector banks. The steady growth of deposits was possible even during the pandemic due to focused policies and an attractive interest rate on term deposits.

Legacy challenges in TNPFC

When Chandra Kant took over as Managing Director of TNPFC in 2018, it had archaic database issues like data integrity, redundancy, partial data and data multiplicity. The company operated with less than 50 staff members and none of the branch operations had a digital channel such as a web portal or mobile application. TNPFC could not collect payments online for the creation of new fixed deposits. Further, the company was unable to renew or close existing fixed deposits online. Public depositors needed to visit the Chennai branch to receive the proceeds from the closure of fixed deposits through a cheque instrument.

The regulatory directions on IT compliance and the Covid pandemic accelerated the pace of digital transformation at TNPFC, covering entire customer requirement — fresh deposits, renewal, closure, nomination and other change request services.

Solution framework

Innovation

• Online web portal and mobile application-based full fidelity deposit account creation for existing and new depositors, thereby offering deposit creation services 24x7x365 — a first among government-controlled NBFCs.

• Integration with core banking system to automate cheque and bank statement reconciliation for both online and offline fixed deposit confirmation receipt generation.

• Disbursement of deposit maturity proceeds directly via digital payment service integration across NEFT, RTGS, IMPS and UPI – providing real-time business-hour payment services without cheque issuance and clearing delays.

Capacity building and operational efficiency

• Established customer support team for managing average daily queries of 300 emails, 200 IVR calls and 100 postal requests.

• Journey from 7,154 backlog emails, to responding on the same day basis. Between April and July, TNPFC responded to 12,411 emails compared to the pre-Covid period of fewer than 20 emails per day.

• Automated online BoT-based verification process for PAN Card and Aadhaar verification process for KYC norms. Video conferencing for video KYC towards customer identity confirmation process as per RBI regulatory compliance.

Impact

• During the period from April 2020 till May 2021, the digital transformation of web portal and mobile application led to the mobilisation of retail deposits of over Rs 1,080 crores through online channels alone.

• Cloud computing operations automation enabled TNPFC mobile deposits online 24x7 with integrated payment gateway services and instant deposit confirmation receipt generation.

• It provided a digital banking experience through digital channels (web & mobile) for depositor interactions and service requests processing, thereby eliminating the need for physical presence.

• Timely disbursement of deposit funds for beneficiaries approved by Social Welfare and School Education departments/state government. Fund disbursement of Rs 1,626 crore in real-time to eight lakh beneficiaries across 32 districts, through the launch of online payment services integration by the Hon'ble Chief Minister of Tamil Nadu.

Improved treasury and fund flow management through the adoption of purpose-built Executive Workflow Management Application, thereby drastically transforming fund management towards transparent cashflow pipeline visibility and approval process workflows for government securities investments. Cloud deployment of GoI MEITY-empaneled cloud Service Data archival and retention towards regulatory compliance adherence. Adoption of a business continuity plan towards robust operational management of TNPFC, ICT preparedness and operational support during the pandemic led to workplace and workforce restrictions.

Impact on digital interactions

In the middle of the Covid-19 pandemic, the TNPFC management focused on improving depositor-user experience through digital adoption across NBFC operations using automation and integration to re-organise diverse systems. The emphasis was on advanced analytics-driven customer support for digital channels (email, IVR, WhatsApp) and a 24x7 online web portal & mobile application for common citizens to carry out deposit service requests from the comfort of their homes.

With the digitalisation of every function, TNPFC has shifted from the generic demography of retired service personnel to a more "smart experience" that provides a digital banking experience for all types of depositors. It is a refreshing change for a government-run NFBC.

Financial performance

The CRAR (capital adequacy) improved from 3.4 per cent to 13.48 per cent. For the first time, TNPFC started treasury operations, invested Rs 1,800 crore in Gsec and T bills (earned Rs 40 cr) and used call options for Rs 1,000-crore bond repayment saving interest payment of Rs 45 crore profits that stood at Rs 83.2 crore during 2018-19 and rose to Rs 505.03 crore during 2019-20 and further to Rs 723 crore (unaudited) in 2020-21.

Chandra Kant Kamble and his team made it happen in an organisation that had not looked at technology as a tool for improving its performance. They could make it happen on account of their foresight and ability to convince the stakeholders about the whole idea, and his team to deliver that idea. They also present a wonderful example of Nexus of Good. The approach adopted by the team can be replicated by many other organisations.

Views expressed are personal