Thursday, March 27, 2014

The Fly

There was once a fly,
Shown a beautiful sky,
Thrown a wonderful pie,
O'er joyed! it tried,
Flew higher and high,
Till the lights drew nigh;
Then hit a damn glass ceiling!

Tried harder than hell,
Cast all the spells,
Rang all the bells,
But down it fell,
Godspeed him well!
What could it tell?
Kept hitting that damn glass ceiling!

No longer a kid,
Evolve it did,
Diamond claws it hid;
The skies now lit,
This time it flew,
Fast as it could;
@###, who removed the damn ceiling?!

Moral of the poem is: Always wear a helmet before you fly.

Friday, March 14, 2014

Can a facebook post be defamatory?

The world wide web represents democratization of news and views. The sheer freedom it provides as an independent platform above and beyond geographic boundaries sometimes makes its users forget that they still need to operate within the limits imposed by the laws of the land they are otherwise governed by.

I came across this interesting site published by some Asian School of Cyber Laws. It is an interesting portal which lists out a few dos and donts based on Indian laws. The gist is as follows: "Before posting on Facebook, ask yourself one question - If this comment were about my family, or me, would I be offended? If your answer is yes, DO NOT post." Read this short document they have put up to get a broad sense of what this is all about:

There are of course exemptions where the defendant could prove that his words were factual or for greater public good. But it also points out that if the words incite undue tensions in a particular group of people, it could be considered defamatory. While on one hand this law may be used by the powerful to quiet voices of legitimate criticism, on the other hand it empowers people to protect their dignity if they feel offended.

I learnt that it is good to be aware of the following sections under the Indian Penal Code (I am no lawyer and do not understand much beyond the plain English extracts here. Also read the Cyber Crimes link at the very last):

Section 469. Forgery for purpose of harming reputation

(Some people may forge an identity to post something defamatory. This apparently is in itself wrong.)

Whoever commits forgery, 1[intending that the document or Electronic Record forged] shall harm the reputation of any party, or knowing that it is likely to used for that purpose, shall be punished with imprisonment of either description for a term which may extend to three years, and shall also be liable to fine....

Section 499. Defamation

(Can't offend. There are exceptions of course. Read the indiankanoon link above)

Whoever, by words either spoken or intended to be read, or by signs or by visible representations, makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such person, is said, except in the cases hereinafter expected, to defame that person....

Section 504. Intentional insult with intent to provoke breach of the peace

(Can't intentionally provoke)

Whoever intentionally insults, and thereby gives provoca­tion to any person, intending or knowing it to be likely that such provocation will cause him to break the public peace, or to commit any other offence, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.

Section 505. Statements conducing to public mischief

(No rumor mongering)

1[505. Statements conducing to public mischief.—2[(1)] Whoever makes, publishes or circulates any statement, rumour or report,—

 (a) with intent to cause, or which is likely to cause, any offi­cer, soldier, 3[sailor or airman] in the Army, 4[Navy or Air Force] 5[of India] to mutiny or otherwise disregard or fail in his duty as such; or

 (b) with intent to cause, or which is likely to cause, fear or alarm to the public, or to any section of the public whereby any person may be induced to commit an offence against the State or against the public tranquility; or

 (c) with intent to incite, or which is likely to incite, any class or community of persons to commit any offence against any other class or community,

shall be punished with imprisonment which may extend to 6[three years], or with fine, or with both.

Section 507. Criminal intimidation by an anonymous communication

(No anonymous threatening)

Whoever commits the offence of criminal intimidation by an anonymous communication, or having taken precaution to conceal the name or abode of the person from whom the threat comes, shall be punished with imprisonment of either description for a term which may extend to two years, in addition to the punishment provided for the offence by the last preceding section.

1. WSJ article:
2. Shantanu Basu
3. Cyber crimes

Thursday, March 13, 2014

Kerala Tourism Backwaters Campaign

Visit: to know more.
I had an old post on the annual Aranmula snake boat race on my blog and the Kerala Tourism folks actually sent me a mail a few days ago with this campaign pic! Way to go.

White label Human ATMs a.k.a Business Correspondents

We should look at our inherent strengths to solve some of our pressing needs. As a country, there are a few things pretty peculiar about India. Take for instance, the sheer size of some of its problems. Some of our 'problems' are as large as a few other countries' entire populations put together. Herein lies the opportunity as well. We are also, a massive sea of humanity yearning to serve its unmet needs and earn our rightful place under the sun. Technology has a huge role to play as well; not at loggerheads but complementary.

October last year, Abhishek (Eko) and Ignacio (ex BMGF) published a post on IFMR blog titled 'Extending the third-party aggregator model from ATMs to Business Correspondents'. This was a revolutionary thought and got picked up by the Nachiket Mor committee on Comprehensive Financial Services for Small Business and Low Income Households. The report was released by RBI recently and has generated quite a few discussions for its take on how retail banking needs to evolve in India.

Just to set the context, Business Correspondents (BCs) are firms or individuals who provide banking services to customers on behalf of a bank. The RBI established the BC model sometime in 2006 to solve the financial inclusion needs of this country. The BC provides the last mile access, reaching where a bank could physically and economically not reach through traditional means. BCs are currently tightly coupled to a particular bank. The BC would feature the brand of its bank, offer products of its bank and liaise with the branches of its bank only. However, interoperability in transactions is conceptually promoted and to an extent implemented. The BC is therefore a human ATM (and more, since the BC can do much more than an ATM can) and the community banker/ an agent of the bank.

Most implementations of the BC network by the banks have only attempted to comply to RBI/ finance ministry mandates for financial inclusion and have been restricted to 'Open X accounts in Y villages' or 'Disburse X rupees of government benefits to Y people'. Most of these initiatives have therefore been seen as cost-centres and as regulatory obligations by the banks and rarely have these been viewed as profit-centres or even as viable business units.

After spending many years in mere obligatory compliances and having spent significant amounts of money to fuel these endeavours, a few banks like the State Bank of India and the ICICI Bank have realized the need to turn this model around. Someone in these banks has rightly put his/ her foot down and said that the whole movement needs to be viable, sustainable and scalable to have any real and meaningful impact.

A few BCs themselves have seen that they could not sustain with a fundamentally non-viable business model. Eko, for instance, has been a BC which has used technology to ensure that its costs were razor thin, invested in ensuring a great user experience and has innovated on the products along with the banks. In short, it is in the best interests of a BC also to ensure that more and more customers, transactions and products flow through their channel and that most of these activities generate enough revenues to sustain them and their partners in the value-chain.

White label ATMs are a relatively new phenomenon for India where a third-party owns and operates a network of ATMs under its own brand and not necessarily for/ by a particular bank. The Tatas and The Muthoot Group have already started setting up their WLATMs in India.

Lets assume that a typical ATM machine costs Rs. 10 lac to deploy, maybe cost a Rs. 1 lac to maintain (rental, electricity) annually. Also, the average life of an ATM would be 5 years. So 5 years on, we must budget for some amount to replace atleast some parts of this machine, lets say this is just Rs. 5 lac. Assume that the ATM earns Rs. 8 per transaction. Ignoring the cash management costs, and security costs (which would be significant) and any other overheads; to break-even, every ATM needs to process approximately 140 transactions per day, every day for the next 5 years.

Also, of course, to set up a network of say a 10,000 ATMs, the capital expenditure is going to be significant (Rs. 10,00,000 x 10,000) and that capital comes at some cost.

Again, the following articles provide some context: A recent article in Times of India pegs a deficit of 19,000 odd ATMs for the public sector banks India compared to the targets set. Also, interesting is this article which quotes officials from SBI, which operates the largest ATM network in India, saying that its ATM operations were loss making.

Now, technology moves ahead way faster than banking can. Mobile banking/ commerce is slowly but steadily getting popular. The RBI has also published that it envisions a less-cash (though not a cashless) society in the near future. For all we know, physical cash might actually become much less relevant in the next 5 to 10 years. Perhaps mobiles will take over where cards have not? While this seems implausible, take a look around; if 10 years ago, someone had told me that almost every economically active individual in India would have a mobile phone, I would have laughed. Video conferencing/ tele-presence used to be stuff from science fiction! My mobile phone has more processing power today than the all the computers in my school lab put together. I am not implying that ATMs would become irrelevant anytime soon- indeed these machines would themselves evolve in ways we may not anticipate today, but they are definitely under time pressure.

With access to one tenth the capital required for ATMs, we could set up a human ATM network that is a hundred times larger. Consider a human ATM network that uses mobile phones/ mPoS as access devices. Add to it the fact that it would not need to overheads that a normal ATM would need, including power, rental etc. Also significant is the fact that much leaner and efficient cash management systems could get deployed here. The result would be a low-Opex and very low-Capex network of banking agents who would not only do cash-in/ cash-out but also educate, solicit and facilitate enrolment to a range of financial products. Also, these costs are nothing but investments in people; in agents who are entrepreneurs. Any improvement in their livelihood would only have a positive rub-off in the community that they serve and the nation at large.

The white label BC model, would achieve a sort of decoupling for the banks where banks would be freed up from having a operationally heavy involvement in these activities. Having endorsements from multiple banks or the central bank itself would create an environment of trust as a legitimate banking channel even for existing customers across different banks and thus more footfalls. This could result in better returns for the agents involved and could lead to a viable and sustainable financial ecosystem designed for outreach and customer convenience.

This model is not without its short-comings though. Managing a huge network of agents is no easy task. Selecting and appointing them is no cakewalk either. Also, people, as they say, are more vulnerable to break-downs than machines are. Each of these risks can arguably be mitigated through appropriate processes, technologies and audit mechanisms.

Prevalent perception is that while technology makes things more efficient, it also causes banking to lose the human touch. Perhaps it is prudent to seek a middle ground here, especially as this also involves introducing hitherto unbanked people to a formal financial system. A little hand-holding and human touch should be welcome, right? Eager to see how this concept plays out.