Financial Inclusion- News and Views - September 2013


June 2014


The new government in India has come in with a strong mandate, and fresh ideas for improving governance. The lead stories in this month’s newsletter focus on two priority areas for the financial inclusion mission:
A) Catalyzing an electronic payments culture: The challenge of reviving a stressed economy, one where fiscal discipline will be key to future growth, can be well served through an efficient and effective G2P payment system. For the new government, this will involve a time bound programme for digitising government payment flows and fixing the existing issues in the stalled Direct Benefits Transfer programme. The latest study from CGAP on electronic G2P payments in low-income countries has vital lessons for India here.
B) Enabling a more inclusive financial inclusion landscape: In order to reach out to the unbanked and under-banked population across the hinterland, all existing networks for banks and non-banks need to be tapped. In a recent speech, the RBI Governor has stressed on the need for differentiated banking licenses; this will include payments banks that will allow the financial inclusion mission to draw on the strengths of all types of players.


Lead Stories


Electronic G2P Payments: Evidence from Four Lower-Income Countries

In a study on electronic G2P payments in four lower-income countries - Haiti, Kenya, the Philippines, and Uganda - Jamie Zimmerman, Kristy Bohling and Sarah Rotman Parker have brought out important learnings for all countries who would like to expand their G2P payment systems for inclusion. These include putting in place adequate infrastructure (the backbone of e-payments) before the roll out of the new payment modes, a high-quality management information system to manage the data needed to make e-payments (including cleaning enrolment data, maintaining KYC and other regulatory standards, reconciling payment records among implementing partners etc.), attending to the logistics of making payments through an agent network in remote locations, ensuring that the recipients understood the payment processes so that trust is built up etc. Though by themselves, electronic G2P payments do not fulfil the goal of financial inclusion, they are an integral part in drawing the unbanked into a digital payments network. It is important to get this stage right to open up access for the excluded to other basic financial services like savings, credit etc.

Competition in the Banking Sector: Opportunities and Challenges

In a speech to the Competition Commission in May, Dr. Raghuram Rajan, Governor, RBI, spoke of the need to allow entry of more players into the banking sector. He noted, “We have had only limited success in achieving inclusion when it is seen as a mandate. Banks sometimes open branches in remote areas but the officers that staff them do not really reach out to the local population; banks open no-frills accounts but many lie dormant… The reality is that if the mandate is unprofitable, banks will find ways to avoid them. Not all forms of inclusion can be made profitable, but we should give banks the freedom to try new approaches, perhaps drawing in other institutions that can traverse the last mile to the underserved where necessary. The RBI will come out with new relaxations on business correspondents shortly. Also, some of the entities that become payments banks may be very well suited to support or substitute commercial banks in reaching remote areas.”

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

KYC : Compliance vs Convenience

Shri R Gandhi, Deputy Governor, RBI, May 23, 2014

Banks Must build a Structure to provide Superior and Efficient Customer Service

Smt. Dr. Deepali Pant Joshi, Executive Director, RBI, May 20, 2014

Indian Banking at Crossroads – Challenge of Risk Management from Globalisation to Financial Inclusion

Shri R. Gandhi, Deputy Governor, RBI, May 8, 2014


Issue of Pre-paid Payment Instruments-UCBs

Issuance and Operation of Pre-paid Payment Instruments in India – Consolidated Revised Policy Guidelines

Need for Bank Branches / ATMs to be made accessible to persons with disabilities

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


Narendra Modi faces big economic challenges

Rural banking, priority sector lending: IDFC Bank looks forward to meeting stipulations others dread

Govt likely to continue with Aadhaar: Bankers

RBI authorises 3 NBFCs to set up White Label ATMs

'KYC norms meant to safeguard banks from fraud'

Bandhan picks Deloitte to help in banking entry

Vodafone India completes pan-India M-Pesa rollout in Q4-FY14

How mobile is helping Adarsh Credit Society in banking a million people

Work of NBFCs termed transparent

Calpian’s money-on-mobile selected for biometric-based mobile cash out pilot in India

Eight financial mantras

Fix the economy, don't target big business

Second innings: SKS Trust buys 70% stake in a new company

RBI goes to school to spread financial literacy

India builds its own card payment network

RBI pilots prepaid cash-out facility

RBI puts Aadhaar biometric authentication for cards on hold, pilots eWallet cash-out facility


Lessons from the 2014 CGAP Annual Meeting in Peru

Financial inclusion: Cornerstone of sustainable growth in Asia

Don’t Forget the Value Proposition for G2P E-Payment Recipients

Killer Apps in China: Social Networks and Financial Inclusion

Agent banking for financial inclusion

Women's bank will boost financial inclusion - Kankasa-Mabula

Postal Savings Bank of China: Inclusive Finance in Rural China

China and Kenya: Different Models for Scaling Branchless Banking

Balancing Regulatory Uncertainty in Branchless Banking Design

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

Embedding Social Performance Management in Financial Service Delivery Antonique Koning and Leah Wardle

CGAP, May 19, 2014

Mobile Money in Côte d’Ivoire: A Turnaround Story

GSMA MMU, May 2, 2014

Improving Access to Finance for Women Owned Businesses in India

IFC, May 01, 2014



Regulatory Trends for Financial Inclusion: Lessons from Brazil

Policy Brief January, 2014

Serving the inclusion goal profitably

Policy Brief November, 2013

In the media

Column: UPA's Aadhaar miss

Financial Express, 06 May 2014

Innovation in payment banking

Financial Express, 18 April 2014

Column: Don't junk Aadhaar

Financial Express, 10 April 2014


More banks for India soon?

Lessons from Brazil


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. 31st May 2014


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