Tuesday, 31 December 2013
Monday, 30 December 2013
Status and strategy for Financial Inclusion in India
2014 will see new entrants in the banking sector and the RBI is also pushing for alternative banking channels, such as white label ATMs, to bring unbanked areas under its fold
With more than half the country still unbanked or financially under-served, RBI governor Raghuram Rajan had urged banks to think out of the box when it comes to financial inclusion and not just limit themselves to opening bank accounts.
"Innovation in reaching out to the under-served customer, rather than simply posting higher numbers in branches or bank accounts opened, has to be part of our efforts," he had said on November 15.
Innovation will certainly be the name of the game in 2014 that will see new entrants in the banking sector as well as the possible rise of a host of alternative banking channels to make formal credit mechanisms more accessible.
White Label ATMs, innovative techniques for doorstep banking and pre-paid cards for making purchases, money transfers and even saving for pensions are on their way to make formal banking more accessible for a country where just 35 per cent of adults have access to a formal bank account and eight per cent borrowed formally in the last 12 months.
The findings, which are a part of the World Bank Findex Survey 2012 also reveal that only two per cent adults use a bank account to receive money from a family member and only four per cent use an account for payments from the government.
In 2014, White Label ATMs could possibly be a game changer in the area of financial inclusion. Of the 13 companies licensed by the RBI for WLAs, Tata Communications Payments Solutions has already begun operations while Muthoot Finance is set to launch early next year.
"We have applied to the RBI for final approval, which is likely by the first week of January. So, we shall start rolling out ATMs 30 to 45 days after that," said KR Bijimon, chief general manager, Muthoot Group, which plans to set up 9,000 such ATMs within three years of operations.
Meanwhile, Tata Communications Payment Solutions, which launched WLAs under the brand Indicash in June 2013 plans to deploy 5,000 such devices by June 2014.
"We have already set up 600 WLAs in Tier III cities and below in states including Maharashtra, Kerala, Karnataka, Delhi, West Bengal. Most WLAs are witnessing reasonable number of transactions," Sanjeev Patel, CEO, Tata Communications Payment Solutions Limited had said.
White Label ATMs are typically unbranded automated teller machines that do not belong to any particular bank. Proposed by the RBI in June 2012, they provide banking services to domestic customers of all banks through debit, credit or pre-paid cards for cash withdrawal, balance inquiry or mini-statements.
The central bank's intention is to improve penetration of ATMs in the country, which are close to 1 lakh in number but are predominantly deployed in Tier I and II cities. Industry estimates reveal that India is lagging behind and has just 98 ATMs per million of population compared to 211 ATMs in China for every one million people. Accordingly, RBI has directed that a majority of WLAs must be deployed in Tier III and lower cities.
"We have a good presence across the country and will use it to expand the scope of WLAs. Even if we do not earn much profit from it, we will consider it as a part of out financial inclusion efforts," said Bijimon.
Muthoot, which has partnered with FIS and Federal Bank, estimates that to break even, every WLA must have 80 to 100 customers every day. The transactions will not be charged to customers but to banks.
Even Patel agreed that transactions at WLAs may not be sufficient for most operators to break even and put the onus on banks to open more bank accounts. "We can keep putting such ATMs but banks also need to do their job and open more bank accounts as well as hand out cards to customers," he said.
In the interim, Tata Communications Payment Solutions is also looking to tie up with companies to provide value added services such as bill payments, advertising, sales of other products and remittances at these ATMs.
Innovation, will certainly be a game changer as financial institutions and NBFCs also explore other avenues such as pre-paid cards to channelise savings of the poor and those living in remote areas.
For instance, Invest India Micro Pension Services has tied up with Visa to provide pre-paid card based micro payment solutions to take deposits for pensions. "It's as simple and reliable as a mobile phone recharge," said Gautam Bhardwaj, co-founder and managing director, IIMPS, which started out providing pension solutions to the remote Paniyan tribe in the Nilgiris in Tamil Nadu and now boasts of over 7 lakh customers across 14 states.
Using mobile technology, these subscribers can transfer their pension contributions to an escrow account from where it is invested in approved products. In return, the subscriber gets a text message, confirming that his or her money has been safely deposited.
Muthoot, too is foraying in a larger role in the pre-paid card segment with a money transfer facility that is aimed at migrant labour.
"We are already providing pre-paid cards to over 20,000 customers who can use it at specified stores where Muthoot has tie-ups. We are now repositioning it as a money transfer card," said Bijimon. The NBFC, which is already engaged in transfer of foreign remittances, will position the new facility at migrant labour across the country.
Poverty and politics of the judiciary
Judges are the spinal cord of the rule of law, and the final interpreters of the Constitution. Their judgments govern social and economic justice. But oftentimes, as Frankfurter pointed out, their failings show up. He wrote: “Judges as persons, or courts as institutions, are entitled to no greater immunity from criticism than other persons or institutions. Just because the holders of judicial office are identified with the interests of justice they may forget their common human frailties and fallibilities.”
We see in India a number of instances of such failings coming into focus. A radical transformation of the robed brethren has become necessary.
The backbone of the constitutional order, or its basic structure, depends on the confidence it commands from the have-nots. This perspective was best expressed by Professor Griffith in The Politics of the Judiciary through two quotations, by Winston Churchill and Lord Scrutton respectively.
Churchill wrote: “The courts hold justly a high, and I think, unequalled pre-eminence in the respect of the world in criminal cases, and in civil cases between man and man. No doubt, they deserve and command the respect and admiration of all classes of the community, but where class issues are involved, it is impossible to pretend that the courts command the same degree of general confidence. On the contrary, they do not, and a very large number of our population have been led to the opinion that they are, unconsciously, no doubt, biased.”
Lord Scrutton wrote: “Where are your impartial Judges? They all move in the same circle as the employers, and they are all educated and nursed in the same ideas as the employers. How can a labour man or a trade unionist get impartial justice? It is very difficult sometimes to be sure that you have put yourself into a thoroughly impartial position between two disputants, one of your own class and one not of your class.”
I wish we had a socialist secular democratic Republic with a judicature that will be fundamentally fair and passionately indignant so that everyone gets what is due to him, securing dignity, morality and spiritual integrity. The executive administration of a society can be truly sacred and sublime only when the judiciary and the legal decisions it pronounces are altogether unaffected by considerations of class, community, fraternity and cultural ethos.
Capitalism and socialism are fundamentally based on the haves and the have-nots. The working class is often exploited by the capitalist class when it nominates the executive, which more often than not represents the richer classes. Even with adult franchise, the purchase by the richer classes of members of the legislature remains a possibility. Naturally, the class bias comes into play even in the selection of judges. Even the judiciary and the jurisprudence they enforce have a class character.
If you want a truly socialist Republic, judicial power must vest in the working class and the peasantry. Inevitably, given its class character, the law of interpretation that the judiciary adopts tends to favour the haves, not the have-nots. The social structure and the fundamental character of the instruments of the Executive, the Legislature and the Judiciary have a political character.
It is only when the Labour Party came to power that the Indian Independence Act was passed in the House of Commons and India could become free. Then the Constituent Assembly shaped the Constitution. But this did not radically change the economic fundamentals of Indian society. That will require a revolutionary movement. Sixty-six years after Independence, the poor remain poor. The Preamble remains an aspiration, not an achievement.
The Aam Admi Party, which stands for elimination of corruption may perhaps be the beginning of a transformation. The crimson day will be hastened if the new ideology of the Buddha, Vivekananda and Gandhi becomes the politics of tomorrow. Then, judicial power will truly reflect the elimination of poverty and the installation of the right to life of the little Indian.
(V.R. Krishna Iyer is a former judge of the Supreme Court of India)
Data on Railway accidents in 2012 and 2013
This data will help you to supplement your answer on disaster management.
Thursday, 26 December 2013
One-eighth of India’s urban population lives in slums: NSSO - The Hindu
click on the link to get more details
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