Wednesday, February 17, 2010

Basic banking in India

BINDU ANANTH and NACHIKET MOR lament the low penetration rate (20%) of bank accounts in India stating that the technology, on-ground capability, cost  and process maturity of banking intermediaries such as business correspondents do not warrant such a low access rate to finance. In an article in Mint, "Basic economic freedom: why can’t we get it done?", they argue that currently no single entity was currently accountable for the low penetration rate and recommend that Finance Minister designate the Reserve Bank of India to own the process, mandate Government payments through business correspondents and to direct banks to set up well-distributed automated access points.

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