Financial Inclusion- News and Views - March 2015


March 2015


After achieving the target set for bank accounts for each household in the country, the Finance Ministry is now working to get the last mile delivery in place. As the Indicus blog post points out, tracking the usage of accounts and agent activity at a granular level will help pinpoint the challenges to overcome. Meanwhile, the Department of Financial Services (DFS) is working with MicroSave and the Bill & Melinda Gates Foundation for a regular survey to understand the coverage and quality of Bank Mitrs and to understand customers' experience with PMJDY. The results from the survey will go to fine tuning the mission programme over the year. The study, "Assessing the most ambitious public financial inclusion drive in history - An early dip-stick assessment of Bank Mitr's under Pradhan Mantri Jan Dhan Yojana", was conducted in November and December 2014 across 41 districts in 9 states. The results are not intended to reveal a national picture, but are to be taken as a dip-stick across the sample districts. While it was heartening to learn that 86% of PMJDY account holders reported that this was their first bank account, just 18 % had received their Rupay card. The DFS is working to push the coverage up on the disbursal of cards. Having done that, the next step would be to ensure a wider coverage of access points – either agents, ATMs, PoS terminals etc- where these cards can be used. The survey reported that 69% of Bank Mitrs were physically present at the stated location, 48% were transaction ready and 11% were untraceable. The Bank Mitrs who were not transaction ready cited several factors, including the recentness of their appointment, lack of a transaction device, technology issues (e.g. downtime) and dormancy (often due to inadequate remuneration). The ultimate aim of the PMJDY must be to increase usage of bank accounts and clearly a lot more must be achieved to fix the glitches at the customer end of the programme.

The Finance Ministry also came through with extremely positive news last month - the focus on the "JAM Trinity" – Jan Dhan, Aadhar and Mobile , as the Finance Minister stated in his Budget speech, "The JAM Trinity will allow us to transfer benefits in a leakage-proof, well-targetted and cashless manner." The details of benefits of digital transfers were spelt out in the Economic Survey that put out two new options for rolling out the programme – through mobile money and the India Post network. However, as Shweta Banerjee from CGAP noted in her recent brief, "From Cash to Digital Transfers in India: The Story So Far", experiences in India have found several barriers to efficient implementation of digital transfers: lack of awareness among recipients, closed-looped technology solutions that do not enable customers to use the account at any other time, for any other purpose other than to receive a benefit from a particular agent; high costs and lack of incentives for banks to deliver financial products. The study noted three key factors for successful transition to digital benefits transfers – enabling infrastructure including connectivity, clear business case for the banks and the agents and customer centricity in service delivery and grievance redressal. It will be a challenge to put all the pieces in place to make the channel viable this year.


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

Emerging Issues in Cyber Security in the Financial Sector

Shri G Padmanabhan, Executive Director, RBI, February 28, 2015

Democracy, Inclusion, and Prosperity

Dr. Raghuram Rajan, Governor, RBI, February 20, 2015

A New Banking Landscape for New India

Shri S. S. Mundra, Deputy Governor, RBI, January 29, 2015


Priority Sector Lending- Targets and Classification –Overdraft in PMJDY accounts

Guidelines for Over Draft Facility

PMJDY Opening of Accounts-Clarification on small and BSBD Accounts

Pradhan Mantri Jan-Dhan Yojana - Opening of Account

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


Mudra for microfinance and financial inclusion growth

Tackling financial inclusion and stressed assets

How Internet users will impact these five areas

PM's Jan-Dhan Yojana faces service tax hurdle

Economic Survey's big impact: Beat China & JAM themes

Saluting the power of mobiles

Meet the Small Finance Bank and Payments Banks' aspirants

NPCI launches Unified Payments Interface

Pockets: ICICI Bank's answer to payments banks

Can Digital Cash Transfers Enable Financial Inclusion in India?

Payment banks: How it is possible to build a business around financial inclusion

Rebooting India's banking structure

Allow a few small, payments banks to fail

Payment bank licence will be a huge enabler: Vodafone


Cashless & Cashy: The Yin-Yang of Digital Delivery in Peru

Agriculture Finance Isn't as Risky!

The "I Don't Have Enough Float" Quandary!

USSD Access: A Gateway and Barrier to Effective Competition

UOB Takes a Human-Centered Approach to Rwanda's Smallholders

Wing Pushes Digital Finance Frontiers Further in Cambodia

Applying the Minimum Economic Recovery Standards in Lebanon

Can HCD Lead to Digital Financial Solutions for Smallholders?

Digital Finance in Bangladesh: Where are all the Women?

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

Costs and Sustainability of Sharia-Compliant Microfinance

Mayada El-Zoghbi, CGAP, February 24, 2015

Promoting Competition in Mobile Payments: The Role of USSD

Michel Hanouch and Greg Chen, CGAP, February 13, 2015

Small Finance Banks – Risks and Challenges of Transformation of MFIs/NBFCs

Anup Singh, Abhishek Anand and Abhay Pareek, MicroSave, February 10, 2015

Small Finance Banks – Is there an Opportunity for MFIs/NBFCs?

Anup Singh, Abhishek Anand and Abhay Pareek, MicroSave, February 10, 2015

Can You Really Use Mobile Money for Microfinance? Lessons from a Pilot

Akhilesh Singh, Lokesh Singh, Nishant Kumar, MicroSave, February 03, 2015



Global Lessons on Partnerships for Financial Inclusion

Policy Brief January 2015

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

Probir Roy & Sumita Kale:Is big always best?

Business Standard, 19 February 2015

Do we need banks for financial inclusion?, 17 October 2014

Column:Making PM Jan Dhan Yojana a game-changer

Financial Express, 01 September 2014


PMJDY: Three questions

PMJDY: Assessing the quality of agents

Payments Banks, another step forward

PMJDY surpasses target before deadline


Editor: Sumita Kale can be contacted at

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.

© Indicus Centre for Financial Inclusion. All rights reserved. 28thFebruary 2015


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