Reserve Bank of India governor Raghuram Rajan has used the word revolution twice in the past few days. The first time was when he said that India could be on the cusp of an economic revolution. The second was when he said on Monday that Indian banking was in the midst of a revolution. Rajan was inaugurating the new unified payments interface that will make monetary transactions through mobile phones as easy as sending a text message. This new interface, plus the rise of specialist banks, could radically alter retail transactions. National Payments Corporation of India deserves rich praise for putting it together.
India now has a public payments infrastructure that perhaps has no parallels in the world for sophistication. It shows how intelligent use of new platforms can help India leapfrog richer countries. An earlier example is the National Stock Exchange, which entered the fray with a technology backbone and risk-management techniques better than what were available in the West.