Broadening electronic payments coverage in India

Electronic payments industry requires the government to motivate laying the rails (aka necessary infrastructure).  It is heartening to note that government in India is using RBI's bully pulpit to get there.  Public Sector banks in India have signed up to bank the unbanked over the next 5 years.  I am sure the skeptical readers have been hearing about such good intentions for many years without any perceptible change in ground realities.  I think that this time it is going to be [marginally] different

• Back to back governments of the same party is providing adequate time to focus on and deploy infrastructure
• Political parties in India have figured out how to benefit from government sops being distributed electronically.

 Having said that, it will take time (5+ years) and effort to see electronic disbursements and financial inclusion (FI) make a difference in the lives of the poor, and change behavior (reduce use of physical cash).

Reserve Bank of India (RBI is the Indian Banking/Payments regulator) Deputy Governor Dr KC Chakrabarthy, among other RBI officials and Bank management shared their Financial Inclusion plans at the 23rd SKOCH Summit on Financial Deepening in Mumbai:

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Universal Financial Access by 2013

[Manju Murthy] In my earlier post, I wrote about the opportunities for disruptive innovations as emerging markets address financial inclusion, I had also written about Sanjay Bhargava, who is championing Universal Financial Access in India. He has graciously agreed to be a guest blogger at Commerce Insights (follows). Additionally Universal Financial Access India, a LinkedIn group, has been created to enable interested professionals continue such discussions and to network with each other. Please sign up to this group as well.

[Sanjay Bhargava] Manju, thank you for inviting me to be a guest writer on your blog and sharing in the dream that real and not cosmetic UFAI (Universal Financial Access in India) can be achieved by 2013.

I would like to start this first post with two extracts from the Nobel acceptance speech given by Prof. Muhammad Yunus. For the full speech see http://nobelprize.org/nobel_prizes/peace/laureates/2006/yunus-lecture-en.html

“We wanted to go to the moon, so we went there. We achieve what we want to achieve. If we are not achieving something, it is because we have not put our minds to it. We create what we want.”

“I firmly believe that we can create a poverty-free world if we collectively believe in it. In a poverty-free world, the only place you would be able to see poverty is in the poverty museums. When school children take a tour of the poverty museums, they would be horrified to see the misery and indignity that some human beings had to go through. They would blame their forefathers for tolerating this inhuman condition, which existed for so long, for so many people.”

I think it is important that we set ourselves measurable BHAG (Big Hairy Ambitious Goals) and my first attempt at articulating five goals for 2013 is there for everyone to look at and comment on. See this five slide presentation http://www.slideshare.net/sbhargav1/ufai-five-goals-2013

Do you think UFA should be a national priority for India and that the five goals for 2013 can be achieved with high innovation and low subsidies?

The presentation also refers to a set of whitepapers which can be downloaded from http://www.slideshare.net/sbhargav1

Most of you will not have the time or the inclination to read the whitepapers and may find them complex without explanation and context. I plan to do a series of bite sized posts highlighting the main points over the next few weeks. We are all learning and seeking solutions so critical comments are very welcome. Together we will find a way. I look forward to collective action and an interesting debate.