Banking Correspondent

[111]

Not many detailed social impact studies have been done on the introduction of the mobile phone in rural areas of India. The general consensus is that it is helping the poorer find jobs. The latest use of the technology is to integrate it with the banking system. The government has an avowed goal of financial inclusion but the implementation has seen competing systems.

The banking correspondents model promoted by FINO and other companies are about to collide with the UIDAI demand for interoperability and the Interbank Mobile Payment System. Much of this will make sense only if you read this link: http://articles.economictimes.indiatimes.com/2011-11-08/news/30373364_1_uidai-bank-accounts-smart-cards

Everybody involved was expecting this and everybody went ahead implementing their solution on a pilot basis. This is typical of how technocrats and bureaucrats in India perceive their end customer: a guinea pig to be experimented upon.

FINO claims to have 40 million customers and is now crying that new standards may make their system obsolete. Why did FINO make a contingency plan, knowing full well that anything could change in to the future?  EKO for that matter was also aware that there would be authentication issues; no doubt their solution is in real time and elegant but they had to have alternatives.

The stakes in the banking sector are very high and technologists have taken risks to prove their system works. For a developing country and market like ours why do we waste precious resources reinventing the wheel without paying heed to those who have done this before us in India and abroad? SKS were the first to introduce smart cards, they have the stories to tell what can go wrong. African telecom providers have developed working cash transfer mechanisms. If it works there, why will it not work here?

Everybody has messed up what should have been the fastest rollout of banking services for the poor. It is because the poor are not complaining, that this mess will go on for another 3years, before sorting itself out.