The Indian government’s push for financial inclusion over the last year has earned India the top rank in country commitment in the latest Brookings Institution's 2015 Financial and Digital Inclusion Project (FDIP) Report and Scorecard. India has been ranked ninth overall amongst 21 countries in the report that analysed progress under four key parameters - country commitment, mobile capacity, regulatory environment, and adoption of traditional and digital financial services. The major turning points in country commitment over the past year have been the tremendous success of the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the new niche bank licenses: while the RBI granted in-principle approvals for 10 Payments Banks in August and 11 Small Finance Bank licenses last month, PMJDY accounts have now crossed 184 million, zero balance accounts have been reduced to 41.31% by end-September and enrolment under the Jan Suraksha pension and insurance schemes has crossed 115 million. The government’s focus on ensuring viability at the last mile remains strong, as remuneration to agents is also being monitored.
Even as Payments Banks and Small Finance Banks are expected to usher in new-age banking for low income customers in India, these non-banks face challenges in adapting to their new businesses. As pointed out by Micro Save in a policy note, “Transformation of Micro Finance Institutions into Small Finance Banks”, new Small Finance Bank licensees will need to work on the following points to transform from “credit only” to “deposit mobilizing” institutions: i) designing appropriate products and processes, ii) finalization of delivery strategy, iii) communication strategy to build demand for deposit products, iv) capacity building of the front line force and v) regulatory compliance and risk management.
Section I: Policy – the latest from India’s policymakers
Sustainable Growth in the Financial Sector
Dr. Raghuram Rajan, Governor, Reserve Bank of India, September 18, 2015
Financing India’s Growth - Challenges and Way Ahead
Shri S. S. Mundra, Deputy Governor, Reserve Bank of India, September 9, 2015
Financial Consumer (Depositor) Protection – Reflections on Some Lingering Questions
Shri R. Gandhi, Deputy Governor, Reserve Bank of India, September 8, 2015
Pradhan Mantri Jan - Dhan Yojana
Trend of Zero balance accounts under PMJDY
Bank Mitra Remuneration
Section II: News and Views Digest – the latest from India and abroad
Restructuring the department of post for financial inclusion and efficiency
Small banks, big change
New-age banking increases the ambit of financial inclusion: CII-Deloitte
Small finance banks are the profitable way to financial inclusion
India teams up with UN-backed alliance to accelerate financial inclusion for all
Market regulator, central bank move SC on Aadhaar
Cashless economy: RBI to promote card usage in smaller towns
Small Finance Banks – Are You Ready? The Opportunities and Challenges
Designing an Effective User Interface for USSD: Part1
Designing an Effective User Interface for USSD: Part2
Cooperation or Competition
Will India's New Focus on Financial Inclusion Pay Off?
Why Is Financial Inclusion so High on the Development Agenda?
Voice of the Customers: a Two-Way Dialogue in Digital Finance
Let's Gamify to Empower the Customer!
Vulnerable Households Need Resilient Institutions in Disasters
The Promise of Mobile Money in Pakistan
Do We Need a Financial Inclusion Paradigm Shift?
False Neutrality: Ensuring Policies and Regulations Benefit Women
Interpreting the Financial Inclusion Numbers in Pakistan
Driving Smallholder Savings through Digital Design in Senegal
Making Tough Decisions as a Smallholder Farmer
3 Insights on Customer Empowerment from Côte d’Ivoire
How Will You do Digital Finance Right?
Understanding the new mobile money regulation in Colombia: An interview with María Galindo of the Colombian Financial Regulation Agency
Regulatory Considerations for Expanding the Mobile Money Ecosystem
Section III: Research – surveys and studies on expanding access to financial services
Transformation of Microfinance Institutions to Small Finance Banks: Differentiating Men from the Boys!
Nishant Kumar, Nitin Malik, Abhishek Anand, Akhilesh Singh and Lokesh Singh, MicroSave, September 17, 2015
Operational guidelines for mobile money interoperability: a customer-centric approach
Renata Bindo, GSMA, September 2015
Proportional risk-based AML/CFT regimes for mobile money
Simone di Castri, Jeremiah Grossman and Raadhika Sihin, GSMA, August 2015
The monthly newsletter from the Indicus Centre for Financial Inclusion documents the latest news and views in the financial inclusion space, to provide a knowledge base that will help build understanding around how to accelerate the poor’s access to high-quality financial services. Editor: Sumita Kale can be contacted at firstname.lastname@example.org. 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. http://www.indicus.net/icfi
© Indicus Centre for Financial Inclusion. All rights reserved. 30th September 2015