
India Opens 15M Bank Accounts in Modi’s Inclusion Drive - fashok
http://www.bloomberg.com/news/2014-08-28/india-opens-15-million-bank-accounts-in-modi-s-inclusion-drive.html
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camillomiller
The bit about bank revenues might be a telltale sign of where the real
interest is, while the part about paying subsidies directly avoiding middle-
men corruption makes the plan look more promising. Whatever the way you look
at it, 15 million people suddenly enrolled into the bank system are a huge
market for some kind of startup that does not exist yet.

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somberi
I have some experience in this space. A decade ago, I led a talented team to
design the largest (at that time) satellite-based network to expand India's
largest bank (it was not then) to rural india.

The government, via Reserve Bank of India, earmarks specific sectors, in line
with their current policy, as "priority sector". This can be housing,
agriculture, rural electrification, etc. And banks are mandated to increase
their focus and show metrics that prove they are engaging bona fide with the
"priority sector". Rural banking is one such.

The cash deposits and reserves from these customers, broadly speaking, are not
that much. They tend to be big in Gold Loans and a source of Agriculture /
Animal Husbandry loans.

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nnain
> The cash deposits and reserves from these customers, broadly speaking, are
> not that much.

Indeed the deposits by the very poor aren't much. But this is a government
scheme targeted at enabling the poor, not to help the banks.

My mom once mentioned, how nice it was when my parents first got a bank
account. They started saving. Money became easier manage. To enable 15Mn
people to have bank accounts is a good step.

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nnain
Raghuram Rajan (Chairman, RBI, India) spoke about this and more recently in a
very interesting speech -
[http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=908&_g...](http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=908&_ga=1.36630818.383224264.1392830436)
(Check the section, "Money liberates and Empowers" if not the whole article.)

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known
Great initiative by Indian regime. I hope they've will and wisdom to breach
[http://india.blogs.nytimes.com/2012/07/12/at-a-sperm-bank-
in...](http://india.blogs.nytimes.com/2012/07/12/at-a-sperm-bank-in-bihar-
Caste-divisions-start-before-birth/) and
[http://india.blogs.nytimes.com/2012/12/17/indias-200-million...](http://india.blogs.nytimes.com/2012/12/17/indias-200-million-
strong-dalit-community-faces-discrimination-every-da/)

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ss45349
Finally mobile payments, Airtel money and the likes, that require phone number
to be attached to a bank account would start to work for more and more of the
poor. In a country where banking infrastructure, especially for transfers,
isnt that great and mobile penetration is really high, such an initiative
would prove to be a great boon for direct transfers and even possibly overeas
charitable remittances in which money could be transferred straight to the
needy, creating full transparency!

~~~
lifeeth_
FWIW - India has one of the best money transfer infrastructures
[IMPS/NEFT/RTGS]. IMPS is my favourite - it taps into the ATM machine backbone
and enables 24x7 instant payments at almost zero cost [
[http://en.wikipedia.org/wiki/Immediate_Payment_Service](http://en.wikipedia.org/wiki/Immediate_Payment_Service)
]. The problem is more than the lack of infrastructure - Most folks are a bit
apprehensive about using Cards or Online banking capabilities for fear of
theft.

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known
Tell Indian regime to send Officials to every house in India for opening a
Bank Account. They've been doing it for registering you as a Voter.

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nakulkampasi
Yea certainly it would help, these 15 million people accessing bank accounts
via mobile is also an initiative which has started by NPCI.

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dragunov11
Best initiative by the government.

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sspiff
> Reserve Bank of India Governor Raghuram Rajan this month urged the
> government to directly transfer cash to the poor instead of offering them
> public services

That sounds like a terrible idea. This opens up the door for further
extortion, corruption and exploitation of the masses. Say the government hands
out $15 per child for education, there way to prevent debt collectors to
harass the poor into paying that money to them. Plus, the extorter knows he
can collect at least $15 per child!

I think offering a service instead of "free money" is much more valuable.

~~~
heydenberk
This is what people tend to assume, but it based more on emotion than reason.
Conditional cash transfers have been very successful in places like Brazil.
There a few good articles about it in the Economist. Here's one:
[http://www.economist.com/node/16693323](http://www.economist.com/node/16693323)

~~~
sspiff
Interesting link, I can't read it right now, but I'll be sure to check it out
later. Thanks!

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arahant
Not quite sure how this will end poverty. If anything, it will bring 15M
people into the banks' debt and interest clasp.

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throwawayHN123
This is for poor and labor class people. Currently these people earn hand to
mouth and spend daily as per their need. Husbands spend on drinking and there
is no money left for medicines or child care. If they get bank accounts 1)They
will start saving. 2)They will understand the benefits of saving and be the
owners of their own money. 3)Any govt schemes or benefits will directly reach
them which currently is going into the pockets of corrupt middle men. $)Banks
wont give credit or loans to these people without colatteral so no question of
debts. This way it will start a revolution and it will take some time to see
the actual benefits but I am sure it will be very positive.

~~~
nb1981
..and people call me a dreamer.

1\. They will start saving: No. They won't. They will have what little money
they have put into a system outside of their control and systematically
syphoned away. 2\. The benefits of saving are not something people need to
learn; the benefits of saving money are harder to justify to someone who isn't
already wholly dependant on it (and maybe even perceives it as a tool used
against his people for centuries). 3\. True, but I fail to see a major
difference between a government and corrupt middle men. Most government people
run businesses, is that the same in India? Conflict of interest? 4\. The
2000's called...give it a couple years and whatever legislation you think
protects the poor will be watered down, eroded away, or completely worked
around.

The textbook justifications for predatory capitalism don't work anymore. I'm
sorry, but the more involved the poor are in finance, the more they are preyed
upon; because there is opportunity and reward. Taking candy from a baby.

"Positive-spillover". FFS.

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nmridul
You should understand that most of the banks that opened these accounts are
Public sector banks (or Government Banks). And most of these accounts have no
minimum balance requirements and not many surprise charges. And deposits in
Government banks are guaranteed (insured upto a certain amount). So there is
no question of the money getting siphoned off.

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codemod
Totally agree... also.. government run banks make it difficult to get loans
than private banks.. and even to this date older people tend to stay away from
private banks because of hidden charges and surprises.

