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Financial Inclusion- News and Views - January 2015

 

January 2015

 

This year promises to be one with many promising changes for financial inclusion, as India's new niche banks, the Payments Banks and Small Finance Banks will enter the banking sector. There has been a lot of interest shown by prospective applicants, and the RBI has extended the deadline for applications to February 2nd, 2015.

The new banks will enter a landscape that has already gone through change. Banks are reducing their costs of outreach as the past year has seen successful tieups between banks and mobile payment start-ups to use technology to tap rural India. Mobile PoS terminals are being used as mini-ATMs in remote villages and with the e-KYC Aadhaar authentication system in place, ordinary grocery stores are already being turned into bank access points across the hinterland.

With the Pradhan Mantri Jan-Dhan Yojana crossing the 10 crore account mark, surveys are on to ensure that all households have been covered. The next phase will be to get these new account holders to save and transact in these accounts and here banks would need to be as innovative as they can.

The new Small Finance Banks will need to work with different models from the standard banking models to meet the credit needs of the poor. The recently released NSSO report on debt and investment in India shows that the rural poor have a much greater dependence on informal or non-institutional sources of credit; this has to change for meaningful financial inclusion. A MicroSave study in Indonesia has put down the following reasons behind the predominance of informal financial systems amongst the poor:

Trust and familiarity

Easy and hassle free enrollment with limited documentation

Doorstep delivery of service

Product/process design that meets the needs of the community such as flexible schedules, small value payments, easy withdrawals, receipts/passbooks as physical evidence, etc.
Banks in India must take their cue from these insights and work with the RBI to reduce friction points in doing business with the poor.

 
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Section I: Policy – the latest from India's policymakers

Make in India, Largely for India

Dr. Raghuram Rajan, Governor Reserve Bank of India, December 12, 2014

PMJDY Progress Review Meeting with Executive Directors (FI) of PSBs and Private Sector Banks on 10.12.2014

Notifications:

White Label ATMs (WLAs) in India - Guidelines

Mobile Banking Transactions in India - Operative Guidelines for Banks

Issuance and Operation of Pre-paid Payment Instruments (PPIs) in India- Relaxations

Scheme- Special campaign for Opening of account of LPG Consumers

Bringing Dairy Farmers with Banking Fold

Section II: News and Views Digest – the latest from India and abroad

India

Keeping the Channel Happy for Quick Scale-up: A Case from the Mumbai Remittance Market

Jan Dhan Yojana: Banks achieve target of opening 10cr accounts

Modi's gift for 2015: With ATMs and all, 'Post Bank' is readying itself to serve the poor

Payment banks could aid Jan Dhan over finish line

Firms queue up for payments bank licence

India Post best bet for financial inclusion

All efforts are to make financial inclusion a reality

Five things that impacted the country's banking sector

LIC, banks asked to provide claim forms online

Jan Dhan may be extended to insurance, pension sectors

Axis Bank in talks for tie-up with payments bank

Kochi Metro to sign MoU with NPCI for smart card

ITZCash says open for partnership for payment bank

Paytm set to apply for a payment banking permit; to enter Singapore

Making Jan Dhan Yojana work

Account balance a necessity for Jan Dhan: SS Mundra

International

Regulation and Innovation: Hand in Hand?

Digital Finance in Cote d'Ivoire: Ready, Set, Go!

Can Agents Improve Conditional Cash Transfers in Peru?

Apple Pay in Afghanistan: Could US M-Payments Work Abroad?

Digital Currencies and Financial Inclusion: 5 Questions

Beyond Mobile: Tablets as Tools for the Extreme Poor

Over The Counter Transactions – Liberation Or A Trap? Part III

Over The Counter Transactions – Liberation Or A Trap? Part II

Over The Counter Transactions – Liberation Or A Trap? – Part I

Lessons from Informal Financial Systems: Indonesian Perspective

Regulating for Inclusive Insurance Markets in Ghana

Section III: Research – surveys and studies on expanding access to financial services

Financial inclusion and optimal monetary policy

Aaron Mehrotra and James Yetman, Working Papers No 476, BIS, December 2014

Business Correspondent Models in Bihar -Constraints and Way Forward

Small Industries Development Bank of India (SIDBI), MicroSave, September 2014

 

Research

Implementing the Pradhan Mantri Jan-Dhan Yojna

Policy Brief November, 2014

Financial Inclusion Metrics-Part I

Policy Brief October, 2014

Financial Inclusion Metrics-Part II

Policy Brief October, 2014

Operationalising Payments Banks for Inclusion

Policy Brief August, 2014

In the media

Do we need banks for financial inclusion?

Domain-b.com, 17 October 2014

Column: Making PM Jan Dhan Yojana a game-changer

Financial Express, 01 September 2014

Blog

RBI releases Final Guidelines for Payments Banks

New legislation in Colombia marks the shift from the bank-led model

Moving beyond remittances

 
 

Editor: Sumita Kale can be contacted at icfi@indicus.net

The Indicus Centre for Financial Inclusion was launched in 2011 to distil and disseminate information on accelerating the poor’s access to high-quality financial services. The Centre is supported by the Bill & Melinda Gates Foundation. http://www.indicus.net/icfi

© Indicus Centre for Financial Inclusion. All rights reserved. 31st December 2014