The Supreme Court continues to confound Aadhaar opponents. In August 2015, it disallowed the mandatory use of Aadhaar in government schemes;yet, on May 19th, it refused to grant an interim stay on the current deadline of June 30th to link all PAN to Aadhaar. Rather than come out with a clear verdict in May, the petitions against mandatory linking of Aadhaar will now be heard on 27th June, three days before the deadline. What we actually need is frank, open discussion, inside and outside the Parliament, looking at all aspects around giving Indians a digital id. Rather than Supreme Court judgements and case law, what we need is a comprehensive bill, that will give Aadhaar a transparent legal framework to operate under. Read more on this by Sumita Kale in the Financial Express, May 23rd, 2017. For an overview of all the cases against Aadhaar pending in the Supreme Court, see Indian Express, May 31st, 2017.
Will the tyranny of choice affect the new banks growth? With three payments banks operational now, each offering different interest rates, products and incentives, we wonder if the choice overload may confuse people, whether people would gravitate towards more staid regular banks or test the new plans. See the Hindu Business Line, May 24, 2017 for an overview of all that is currently on offer.
These are interesting times, but rather than let the market forces play out, the RBI is not letting go easily. When India Post Payments Bank announced different rates on three types of accounts, it had to backtrack, as the RBI did not allow differential rates on deposits below Rs. one lakh. It is not clear what holds the RBI back on this, but surely new banks should be allowed to explore new options? See Economic Times, May 24, 2017 for the bid by the payments banks for more freedom.
Rather than a policy push, true progress in financial inclusion and retail digital payments in India will come only when service providers adopt a customer centric architecture. We now have S. S. Mundra, Deputy Governor, RBI calling out for banks to raise the bar on customer service and talking of bank account number portability in the future (RBI, May 30, 2017). For digital payments, customer centricity means ensuring zero friction while transacting and a relook at the incentives offered; a possible road map for this has been given by Probir Roy (Mint, May 4, 2017).