Monday, 30 July 2012

Financial Inclusion through Technological Innovation

The financial inclusion which is declared and propagated so vociferously remains only on paper with no intention to be made practical.In the latest budget FM announced that every 2000 people will have a bank branch.As of now we have 6 lakh villages and we have only around 80000 bank branches which are mainly located at Metros,Urban centers and not in villages.Bank branches are needed to make available cheaper credits to tide over economic backwardness or recession. The postal savings bank department could be seperated from postal department and in one go we may have around 2 lakh branches. Postal Saving Bank can help with easy credit at economically backward areas. We must have at least another 2 lac bank branches within another 5 year
Opening bank branches in every village for 2000 people will also create employment in far flung areas. In addition this will also give impetus to technologicall iinovation by providing core banking solutions,virtualisation and ATMs in rural areas to be operated by illiterate rural population by biometric,voice recognition or vernacular voice modualtion technics for easier bank transactions.It will also become a market for both hardware & software sales for upcoming SMBs.We will be having bank branches for every 4 to 5 Kilometeres which will open up large market for innovators to serve the under  previlidged sections of the societyThe Bank branches in rural remote areas must work as a Financial Super Market in economically backward areas to invest in equities, Mutual Funds,govenment bonds,debentures and obtain Kisan credit cards,general credit cards,smart cards & also Aadhar cards in addition loans at low interest rates of less than 10% just like Reliance,Tata,Birla,Mittal,Munjals etc get at Metros and unlike Micro finance institutions who exploit the poor by charging interest ranging from 26 to 40% for a small loans of Rs.50000 to Rs.1 Lac.