Financial Inclusion- News and Views - December 2013


December 2013

This month we focus on the crucial role played by regulators in setting up a framework promoting financial inclusion through increased competition, greater efficiency, and lower costs. The lead stories include: a) Brazil’s first set of mobile payments regulations that permit non-banks (including MNOs) to issue e-money and also allow non-banks to directly access the central bank’s clearing and settlement system, b) a speech by RBI Governor, Dr. Raghuram Rajan, where he set out the need for and measures being taken towards new innovative models for inclusion that leverage technology and c) TRAI’s guidelines to break the deadlock between banks and telcos in using mobile banking channels. These three pieces point to the road ahead for India towards an enabling landscape that will use both banks and non-banks in the inclusion mission effectively.


Lead Stories

Regulatory framework for e-money in Brazil

Brazil unveiled its first set of regulations allowing non-banks to issue e-money in November; while detailed summaries of the new law and regulation under development can be found at the above link and here, the key elements of the law include a) the creation of new legal entity known as a "payments institution," which will be regulated by the Brazilian Central Bank. Under the law, electronic money is not considered a deposit and is issued by a third party under a license from the financial sector authority, b) interoperability of mobile payments instruments is not mandated, though it is considered to be a principle and objective of payment arrangements. Interoperability is “signaled as a goal further down the road, and any new service which receives a license will be required to have a clear roadmap of how it will eventually interoperate with the wider financial ecosystem”, c) licensed payments institutions will be granted access to the clearing and settlement facilities operated by the central bank, but they are not mandated to use it, d) the balance of payment accounts must be fully allocated to a specific account at the central bank, or else in federal government bonds and e) simplified KYC procedures are allowed for low-value pre-paid payment accounts.

The Five Pillars of RBI’s Financial Sector Policies

RBI Governor, Dr. Raghuram Rajan, set out financial inclusion as one of the five pillars of the central bank’s policies and reiterated the need to go beyond the present branch-based approach: “We have many experiments under way to use technology, mobile phones, new products such as mobile wallets, and new entities as business correspondents to link people up to the formal financial system. Much as with cell phones where we created a frugal Indian model, we need a frugal, trustworthy, and effective Indian model for financial inclusion.” The Mor committee is set to give a road map on a new model by the end of December, this model is expected to be in line with global trends of an open landscape that encourages innovation.

TRAI regulations on mobile banking

“The Mobile Banking (Quality of Service) (Amendment) Regulations, 2013” and “The Telecommunication Tariff (Fifty Sixth Amendment) Order, 2013” have put in a framework to help bank agents to interface with service providers for the use of SMS, USSD and IVR channels for mobile banking services and has mandated a tariff ceiling of Rs.1.50 per USSD mobile banking transaction that the telecom firm would collect from subscribers. These guidelines should help in unlocking transactions through the mobile, and raising access to those currently excluded from the system.

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

Entry of Banks into Insurance Business – Insurance Broking Business

RBI, November 29, 2013

Financial Inclusion- Journey so far and Road Ahead

Dr. (Smt) Deepali Pant Joshi, Executive Director, RBI, November 28, 2013

Self Regulatory Organization (SRO) for NBFC-MFI

RBI, November 26, 2013

Status of Direct Benefits Transfer roll out in 28 identified schemes and 121 districts under Phase I & II from 1.1.2013 to 14.10.2013

Department of Financial Services, Ministry of Finance, November 2013

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


Mahila Bank to open 16 more branches in four months

Mobile banking rate capped at Rs 1.50 a session

5 reasons corporates are exiting the new bank licence race

Card swipe machines may raise banks' costs

Banks violate RBI norms to deny zero-balance A/Cs

Time to allow NBFCs to take financial inclusion story ahead

HCBL Bank targets beggars for financial inclusion

RBI: fresh loans to medium enterprises to be priority sector advance

Banks go on rural overdrive, but profitability a worry

India leads in use of mobiles for payment

Bharatiya Mahila Bank starts with 7 branches

RBI seeks lenders' feedback on banking licence seekers

RBI asks PSBs to give loans to women's groups at 7% interest

7 things to know about India's first women's bank

Banks struggle to expand in unbanked, rural areas

There is room for more players in the financial inclusion sphere

FM wants bank licences to go to those with innovative models

Tatas give financial inclusion a push; co to install 15,000 ATMs in the next 3 years


Banks in Nepal are building interoperable mobile money offerings

Building a Robust Financial Ecosystem – Panel at NFC & Mobile Money Summit

Advancing Financial Inclusion for Women in Africa

Closing the MSME Credit Gap for the Informal Sector

Jipange KuSave, M-Shwari, and the Influence of Startups

What If The Poor Weren't Marginalized?

Closing the Credit Gap for Micro, Small and Medium Enterprises

Can MFIs Leverage Mobile Banking to Serve Customers Better?

The Worrying Trend of Interest Rate Caps in Africa

FI2020: Scarcity, Tunneling and Financial Inclusion

Using Mobile Banking for New Microfinance Business Models

Understanding Customers for Financial Innovation in Ghana

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

White Labelled Mobile Financial Services

Shivshankar V., MicroSave, November 29, 2013

Microinsurance: The way out of risk and vulnerability

MicroSave, November 21, 2013

Securing the Silent Vol. III - Securing Old Age: The Indian Story of Micro Pensions

Premasis Mukherjee and Rosalind Piggot, MicroSave, November 19, 2013

Digital Financial Services for the Under-Banked

Manoj Sharma, MicroSave, November 18, 2013

Sustainable Non Banking Financial Institutions

Manoj Sharma, MicroSave, November 18, 2013

Global Financial Development Report 2014: Financial Inclusion

World Bank, November 7, 2013



Serving the inclusion goal profitably

Policy Brief November, 2013

Digital payments and inclusion - Part I: Building a cost-effective robust infrastructure

Policy Brief October, 2013

Digital payments and inclusion - Part 2: Facilitating mobile payments

Policy Brief October, 2013

In the media

The next salvo in digital payments

Financial Express, 15 November 2013

Strong signals for mobile banking

Financial Express, 10 October 2013

What hinders partnerships in payments and transfers

Financial Express, 06 August 2013

Speeding financial inclusion in India

Mint, 17 July 2013


“Over-borrowing: Common to US, Bosnia- Herzegovina, India and the US?”: Deepak Maheshwari

“Financial Inclusion – A Pre-Requisite As Well As An Enabler for Direct Benefit Transfer”: Deepak Maheshwari

“Why is DBTL a roaring success while the other DBT schemes are still struggling?”: Deepak Maheshwari

Moving towards interoperability for mobile money


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. 30th November 2013.


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