RBI In­ter­ven­tion – Bank­ing the Un­banked

Consumer Voice - - Bfsi Guide -

At present, all ben­e­fi­cia­ries of gov­ern­ment schemes in Jhark­hand have m-Pesa ac­counts and in or­der to in­crease pen­e­tra­tion of the ser­vice, Voda­fone or­ga­nizes camps to sen­si­tize peo­ple and is­sue them mo­bile con­nec­tions.

Things changed for the bet­ter in June 2012 when Re­serve Bank of In­dia (RBI) started giv­ing out li­censes for op­er­at­ing mo­bile wal­lets. Tele­com op­er­a­tors were given li­censes to op­er­ate a semi-open mo­bile wal­let that al­lowed con­sumers to send and trans­fer money, pay bills and do recharges, but did not al­low the user to take out cash. How­ever, RBI al­lowed in­ter­op­er­abil­ity with a bank, which en­abled cash-out op­tions.

In April 2013, the m-Pesa ser­vice was rolled out in the cir­cles of West Ben­gal, Kolkata, Bi­har and Jhark­hand—a lot of peo­ple mi­grated from these states to big­ger cities for jobs. Any­body could en­rol for m-Pesa with a one-time pay­ment of Rs 100 to the ser­vice provider and open­ing an ac­count with the part­ner bank. The ser­vice provider col­lected know your cus­tomer (KYC) forms—like any bank does— and thou­sands of their deal­ers be­came m-Pesa agents or busi­ness cor­re­spon­dents, and started bank­ing the un­banked.

The only prob­lem at the time was that all m-Pesa agents had to be within a 30-kilo­me­tre ra­dius of their par­ent bank, es­pe­cially since their bank’s tieup did not have deep pen­e­tra­tion in ru­ral In­dia. This re­stric­tion was sub­se­quently re­moved and m-Pesa can now reach re­mote parts of the coun­try pro­vided the tele­com sig­nals reach there.

Within a year of m-Pesa's launch, the ser­vice provider com­pleted their pan-In­dia roll­out. To­day, they re­port­edly have 80,000 out­lets or bank­ing cor­re­spon­dents, and 60 per cent of them are in ru­ral In­dia. Even though m-Pesa fa­cil­i­tates other ser­vices like util­ity bill pay­ments and recharge op­tions, money trans­fer ac­counts for as much as 60 per cent of their busi­ness.

The ad­van­tage in pop­u­lar­iz­ing this mo­bile plat­form is the lim­ited bank­ing in­fra­struc­ture in the coun­try and the mil­lions of mi­grant work­ers’ need to send money home in a se­cure man­ner. What helps fur­ther is that the ser­vice provider has a dis­tri­bu­tion net­work that spans 1.7 mil­lion touch points, and deep pen­e­tra­tion in ru­ral In­dia – of their 170 mil­lion users, 53 per cent are claimed to be in ru­ral ar­eas.

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