event
egov india 2010
Financial Inclusion
Banking for all There is a crying need for building infrastructure that makes financial services available to masses at affordable costs
(L - R) RS Sharma, Director General, UIDAI; Ajay Singh, CEO Forbes Technologies; B Sambhamurthy, Director, IDBRT (Chair); Prof S Subramaniam, Chairperson, ACMFI, Santanu Sengupta, Director, Corporate Affairs & Finance, ACMFI; Satyajit Nath, Chief Architect, FamilyHat; S Kuberan, Project Manager (Electronic Benefit Transfer) Rural Development, Andhra Pradesh
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n India, a large section of the population is poor and lives in rural areas. A large number of this population is financially excluded due to factors such as lack of information, insufficient documentation, lack of awareness, high transaction charges, and lack of access and illiteracy. So there is a huge need for financial services where banks can deliver banking services at affordable costs for the excluded section of the society. The session on “Financial Inclusion for Effective Governance� aimed to take care of these problems with the help of ICT. The session was chaired by B Sambhamurthy, Director, Institute for Development and Research in Banking Technology (IDBRT) who briefed what is financial inclusion, and discussed its conceptual framework, the progress made so far, and implementation and operational challenges. RS Sharma, Director General, UIDAI gave his perspective of financial inclusion taking into account Adhaar, the unique identity number
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egov / www.egovonline.net / September 2010
not only for the rural masses but also for the economy at large. Prof S Subramaniam, Chairperson, African Centre for Mobile Financial Inclusion (ACMFI), spoke on the broader perspectives of financial inclusion, focusing on the need to improve the state of the services. There is a need for both public and private sectors to work in close collaboration. He pointed out that the shortfalls in the system are because of the various unmet commitments, and there was a need for transparency in the management of the resources. For effective governance, not only technology but effective and viable policies are needed too, he said. Santanu Sengupta, Director, Corporate Affairs and Finance, ACMFI compared the Indian scenario of financial inclusion with other successful models, globally. He emphasised that the main challenge faced in India was that a huge population was bankless and illiterate. This needed to be addressed to make financial inclusion work in rural areas. Satyajit Nath, Chief Architect, Family Hat spoke about the various challenges faced in rural areas. The distance to the nearest bank is a major challenge faced on the demand side, i.e. by the
There is a need to develop A financial inclusion framework for enabling public and private sector organisations to collaborate program for Indian residents. He highlighted that the extent of financial inclusion in Indian villages was only five percent, with the main challenge in rural areas being non-availability of banks and the high cost of operating bank accounts. There is an urgent need to create the national infrastructure to make the electronic money transfer easy, said Sharma. Ajay Singh, CEO, Forbes Technologies, pointed out the main challenge in the financial inclusion is at the front-end or at the delivery end and typically pertains to the high transaction cost. The need is for a viable model that can be sustainable for all stakeholders, he stressed. Financial inclusion is important
consumer, especially in the rural areas. Also, the products provided are not so very useful for the people. Another important challenge that is a barrier on the demand side was illiteracy and had to be addressed seriously, he added. S Kuberan, Project Manager, Electronic Benefit Transfer, Department of Rural Development, Government of Andhra Pradesh was of the view that financial services should be for the disadvantaged and the low-income groups. He spoke of the various successful financial inclusion models used by the Government of Andhra Pradesh, particularly the branchless banking model.