Universal Financial Access - India
Make India an Inclusive Economic Superpower
RBI Governers Speech on Financial Inclusion
An important speech PDF attached. Points 35 and 36 are interesting. Point 35 is a thinly veiled threat to banks to get their financial inclusion act together or RBI will open the opportunity to players other than banks. Point 36 is on MFI rates at 24-30% being too high.
In April 2009 I had listed five goals for 2013. I am now feeling a little optimistic that by 2013 all these may be achieved. My April 2009 presentation is also attached.
In April 2009 I had listed five goals for 2013. I am now feeling a little optimistic that by 2013 all these may be achieved. My April 2009 presentation is also attached.
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UFAI - Five Goals -2013.ppt, 558 KB -
IFFG091209.pdf, 62 KB
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Replies to This Discussion
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Permalink Reply by Basudeb Sen on -
Reserve Bank has always been a great learning organisation: as usual it has the DNA ofl learning steadily but slowly. One of great strengths of these kind of steady learning organisations is that they dislike all ideas to start with but when circumstances forces them to learn they start owning those ideas rejected by them as their new innovations, and when they start owning them they goad the regul;ated under them to implement them and monitor the implementation providing incentives as well as punishment (for failure). At last we can now be optimistic that financial inclusion will be on the move.
It is normal for a bank regulator to be attached to bank-led financial inclusion. It is also normal for such a regulator to bank only on those they regulate. So, the threat to the banking system about alternatives is only a reflection of RBI's current discomfort with non-banking players coming in to develop an alternative, commercially competitive payment system channel that RBI is yet to understand fully. But RBI will slowly and steadily learn that payment system is much more generalised system that banking payment system. Once RBI is able to learn that we could see much faster progress to financial inclusion.
Meanwhile, RBI will now step up its efforts to facuilitate financial inclusion in various ways and would expect us to applaud its initiatives, even if the initiatives come late in the day.
The whole Indian system of state-led development will be bound to be slow because state-led is actually state constrained development. India is yet to get freed from the 'State-as-God' Religion and its Church System that is capable of achieving only with considerable delay what freed people can deliver much earlier. RBI would find it difficult to understand that the MFI interest are high because the supply of MFI services is restricted by regulation and political-bureacratic environment and falls short of the demand. The more there is free entry of alternative systems and competing institutions, the lower will be the prices in the market. But the state-led development will always constrain free growth of alternative, competing enterprises.
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Permalink Reply by souren ghosal on
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It would be imperative to create a business model based on public private partnership of banks and farmers and artisans perhaps may help better and cost efective model for UFA.
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