'Scalability holds key to financial inclusion'

A big challenge in implementing financial inclusion in the future will be the evolution of technology that is scalable enough to accommodate huge volume of transactions, according to the Chairman and Managing Director of Bangalore-based public sector lender Vijaya Bank, H S Upendra Kamath.

“The technology is evolutionary in nature; we are yet to zero in on a model that will enable to scale up to match the requirements of financial inclusion. We don't have a proven model as of now,” he said while addressing a gathering of stakeholders during the Financial Inclusion Conclave organised by financial information services firm D&B and state-run Canara Bank in Bangalore on Friday.

He also cited inoperative nature of many of the no-frills accounts opened under financial inclusion. “Our bank had about 9 lakh such accounts with a balance of Rs 76 crore as on March 31, 2013, about 60 per cent of them were largely inoperative. This defeats the purpose of financial inclusion. The account holders should also benefit from credit linkages, micro-insurance policies and government schemes."

He said that financial inclusion should deliver banking services to all, especially the vulnerable sections of the society, at affordable costs in a fair and transparent manner.

Kamath also said that stakeholders should have a pragmatic approach to financial inclusion. “It needs to be seen as a business opportunity and not as a social obligation, else it will be largely a half-hearted activity.”

LPG subsidy disbursed

The Centre disbursed Rs 120 crore as subsidy under the direct benefits transfer scheme to approximately 15 lakh LPG consumers between June 1 and July 24, 2013 in 19 districts of India, according to the Director General and Mission Director, Unique Identification Authority of India (UIDAI) Vijay Madan.

He further said, “We feel that out of the 14 crore LPG consumers across India, about 2 crore will be eliminated during de-duplication process.”

Madan shared the details while delivering his keynote address at the “Financial Inclusion Conclave” organised by financial information services firm D&B and state-run Canara Bank in Bangalore on Friday.

On the cost-benefit analysis of issuing Aadhaar numbers, he said that the government has spent “a little over Rs 3,000 crore” to issue 39 crore Aadhaar numbers across India.

He said that the recently-launched “Crisil Inclusix”, an index to measure financial inclusion, should also have a fourth metric “identification” penetration in addition to the current three, namely branch, deposit and credit, to enable stakeholders to derive more accurate results from the index.