Payment banks and universal electronic bank accounts can bring about genuine financial inclusion
The Nachiket Mor committee on financial inclusion’s recommended objective of banking for all by 2016 is a tall order. There is no doubt about the need for that goal, but India’s record on achievement of such objectives has been dismal. Education for all and health for all are two striking examples where the goal post kept shifting by 10 years, till eventually the field was changed. Moreover, often government mandated services are converted into achieving hard parameters—how many new accounts, new branches, new agents, etc. Soft parameters such as the quality and usability of services are overlooked. The recommendation to introduce payment banks to enable ubiquitous access and creation of universal electronic bank accounts is an opportunity for banks to genuinely transform financial inclusion and recognize the high aspirations of persons with small wallets. The new banks should aim to service all Indians and channel their aspirations: reduce risk and stress, help stretch budgets, and support a better future. There are some things that need to be done to achieve all this.