Financial Inclusion- News and Views - April 2014


April 2014


This month’s newsletter focuses on good governance, a key input that is needed to get the inclusion mission ahead in India. We lead with a speech by RBI Deputy Governor, K C Chakrabarty, reflecting on the unsatisfactory progress of financial inclusion in the country. The responsibility for this, he says, lies in poor governance of our financial inclusion framework and lack of accountability at the highest level in the banks. The second lead story takes this theme forward through a note by MicroSave on the government’s decision to suspend the Aadhaar-enabled Direct Benefits Transfers scheme. Calling Aadhaar a first-world solution in a third-world environment, the authors conclude that lack of coordination between local government, banks and business correspondents has led to the under-performance of Aadhaar-enabled DBT. Clearly, good governance that brings all stakeholders on board is a tough challenge, one that must be met for India to succeed in its financial inclusion goals.


Lead Stories


Inclusion, Growth and Governance- Issues and Way Forward

In this speech, the outgoing Deputy Governor of the RBI, K C Chakrabarty, has outlined the financial inclusion framework in the country. While admitting to the progress being unsatisfactory, he notes, “a fair share of the collective failure of the stakeholders can be attributed to poor governance of our Financial Inclusion framework and lack of accountability at the highest policy level i.e. Board and at the level of senior management.” In his opinion, banks continue to view inclusion as a social/regulatory obligation, with half-hearted efforts that have not extended full support to Business Correspondents at the ground level. Good governance and accountability at different levels of bank management, he concludes, form the key to success of the financial inclusion programme.

Don’t Throw The Baby Out With Bathwater! Is Aadhaar The Reason For Failure Of Direct Benefit Transfer Pilots?

In a MicroSave India Focus Note, Mukesh Sadana and Lokesh Singh look at the reasons behind the under-performance of the Aadhaar-enabled Direct Benefits Transfer programme : in many cases, beneficiaries never received their Aadhaar card, bank staff were not adequately trained in seeding protocols and processes, leading to considerable confusion, different practices were followed across the country for the actual crediting of the payment in the account, beneficiaries could not access their account to withdraw the money credited etc. As Sadana and Singh note, “The combination of implementation challenges highlighted above left a lot of genuine beneficiaries unable to receive their benefits. This led to widespread discontent. The government could ill afford to have such large numbers of discontent individuals in an election year. So it took the easy option to discontinue DBT.” In certain locations where a supportive eco-system was provided, e.g. East Godavari district, Aurangabad district, etc., the Aadhaar-enable DBT brought in significant efficiencies and savings. They conclude that for the Aadhaar-enabled DBT to succeed, the infrastructure, readiness of key stakeholders and delivery systems must be in place.

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

Dr Gurdial Singh Sandhu takes over as Secretary (Financial Services) w.e.f April 1, 2014

Transforming Credit Information into Action: Issues and Challenges

Dr. K.C. Chakrabarty, Deputy Governor, RBI, March 20, 2014

Efficient systems and Proficient banks

Shri G Padmanabhan, ED, RBI, March 10-11, 2014

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


Govt looks to fast-track mobile banking rollout

Financial Inclusion: Pathanamthitta Achieves Top Position Among Dists in Country

Bank of India allows card-less cash withdrawal on some ATMs

Bharatiya Mahila Bank sets up branch in Bihar

Vodafone to use financial inclusion to tap rural market

Mahila bank not for women only, open to both genders: Ananthasubramanian

Indian Overseas Bank opens all-woman branch

'Internet use to ensure financial inclusion, transparency'

Cast the net wide for all its worth

Banking on new technology

World Bank’s financial inclusion myopia


Redefining Failure: Why Getting it Wrong is Part of the Equation

Preventing the Digital Trail from Going Cold: Lessons from Mexico

Transitions from OTC to Wallets: Evidence from Bangladesh

Do Mobile Money Clients Need More Protection?

E-Payments in Low-Income Settings: Cutting-Edge or High Risk?

Given Opportunity, Extreme Poor Take Destiny Into Their Own Hands

La Poste Tunisienne: A Powerful Tool for Financial Inclusion

Charting Times of Change: Money Practice and Behavior in Myanmar

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

Case Study: Striving for E-payments at Scale in the Philippines

Bankable Frontier Associates, March 5, 2014

Case Study: Mobile Money-Based Government-to-Person Payments in Haiti

Phil Levin, GSMA MMU, February 2014

Case Study: Shifting Food Assistance in Kenya to E-Payments

Bankable Frontier Associates, March 5, 2014

Case Study: E-Payments in Uganda with Limited Infrastructure

Bankable Frontier Associates, March 5, 2014

The Journey to Customer- Centricity

CGAP, March 2014

Mobile money services development : the cases of the Republic of Korea and Uganda

Eva Gutierrez, Eva and Tony Choi, World Bank Policy Research Working Paper No. WPS 6786, February 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: 'Payments banks' raise more questions

Financial Express, 24 January 2014

A shaky vision for financial inclusion

Mint, 16 January 2014


Views on the Recommendations of the Mor Committee on Inclusion

A unique national id for India?

Innovations in mobile financial services


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 March 2014


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