india’s payments dilemma. continued.

The Financial Sector Legislative Reforms Commission (FSLRC) could recommend that the Reserve Bank of India should grant limited purpose bank licences to telecom firms and other industries in order to promote financial inclusion. A working group led by Morgan Stanley India chairman PJ Nayak, tasked by the Commission to propose changes to the country’s payment […]

The End of the Silly Common Banking Correspondent Model?

since may this year, i have been tracking a plan from the department of financial services to split india into 20 clusters, and to appoint a common banking correspondent company for all public sector banks operating in each cluster. it is a textbook case of policy adventurism. the department, a part of the finance ministry, […]

In which the Banking Correspondent Auctions finally go below the psychological zero percent margin mark…

for a while now, i have been reporting on the never-ending happiness that is the finance ministry’s “one cluster, one BC” model — essentially, to split india into 20 clusters and then to have one common banking correspondent company for all public sector banks operating in each cluster. this company would then be the only […]

Another update on the banking correspondent auctions

A newly-formed association of banking correspondent (BC) companies has criticised the finance ministry’s ongoing plan to split India into 20 clusters, and to appoint a common BC company for all public sector banks operating in each cluster. In a white paper released on Thursday night, the Business Correspondent Network Managers (BCNM) Forum, a grouping of […]

On the banking correspondent auctions…

for some time now, ET has been reporting on a worrying move by the philosopher kings in the department of financial services (the offshoot of the finance ministry tasked with managing the banking sector) to overhaul the banking correspondent (BC) model. well, the auctions to appoint common BCs for all public sector banks in a […]

of banks, state firmans, bids and outcomes. part two: jharkhand

about a month ago, i wrote about a controversial plan by the finance ministry to split the country into 20 clusters, and to appoint a common banking correspondent company for all public sector banks in each. to understand the attendant implications, please click here. yesterday, the second tender in this series was awarded. it went […]

Ctrl:Alt:Del

Today’s Economic Times carries this story about an unexpectedly large change that is sweeping across the Bank-BC model. The Department of Financial Services, the part of the Finance Ministry which looks after the banking sector, has decided to split the country into 20 clusters and get all public sector banks in that region to work […]

a friend turned foe?

Anyone watching the telecast of the 2012-13 budget would have concluded that the Finance Ministry was solidly backing Nandan Nilekani’s Unique Identification Authority of India. The budget speech mentioned Nilekani by name. It mentioned the UID programme ten-odd times. And spoke about how Aadhaar would be used to overhaul existing subsidy regimes in India — […]

haryana’s tryst with e-payments

Haryana is one of the first states in India to move towards e-payments of welfare programmes. Early last year, it began stopped disbursing its social sector pensions through sarpanches, and began using banks and banking correspondents instead. However, after six or so months, the state government called off the project and went back to the […]

Some questions about the Banking Correspondent model

These are the heydays for the banking-correspondent (BC) model. Banks want to use them to extend banking into villages. The government wants to use them to deliver welfare payments. In this followup to the financial inclusion story late last month, i argue that this confidence being reposed in the BC model is a tad premature.

On India’s Gambit to Get Everyone a Bank Account

First, the good news. Over the past few years, India has been moving rather aggressively towards bringing all Indians under the banking fold. Back of the envelope calculations suggest that 480 million Indians, about 96 million households, did not have access to banking as recently as 4/5 years ago. Well, since then, after some pushing […]

Why the Banking Correspondent companies are unhappy with the UIDAI

Today’s ET carries this story about the ongoing tussle between the UIDAI, the body tasked with developing the architecture for delivering cash transfers, and the banking correspondent companies, which will have to do a part of the actual delivery. Broadly, the UIDAI thinks villagers should be able to access their bank account through any BC […]