Banking Is Necessary But Banks Are Not: Jun Zhang At The Conclave For Financial Inclusion

At the Conclave for Financial Inclusion in Delhi, there was a session on Challenges and Opportunities: Infrastructure and Physical Access for Financial Inclusion, moderated by Dr Rajiv Kumar, Vice Chairman of NITI Aayog. The Conclave aimed to bring together leaders of the financial revolution, with senor level stakeholders from the government, the banking sector, microfinance institutions, innovators, technology providers, CSOs, intergovernmental organizations and the UN in a day-long conclave to discuss financial inclusion.

At the session, Dr Rajiv Kumar said, “Financial inclusion has been with us for a long time since Indira Gandhi nationalized the banks”. He also added, “73% of our population remains unbanked. It did take the 2014 announcement of the Jan Dhan Yojana for financial inclusion to become a movement”. He also went on to say “Digital push and financial inclusion is what India needs to be at the frontiers of technology” and that “There is a constraint which exists, which is the mistrust between the government and the people. Financial services is the key”.

One of the panellists, Mr Jun Zhang, Country Manager, International Finance Corporation said, “Financial inclusion has always been very high on our agenda. The large population is a boon for the digital age as it will need a market for inclusion”. He also went on to add, “The fourth industrial revolution is a blur between the boundaries of the physical and digital sphere. India has the potential to be a global leader by ensuring financial inclusion to a large population”. Echoing Bill Gates’ sentiment, he said, “Banking is necessary, but banks are not”.

Another panellist, Mr Muddada Ravichandra, Secretary, Department of Finance, Andhra Pradesh Government said “We have many Self-Help Groups in my state which is empowering women. We need to spread the banking system into the remote areas.” He also went on to add, “Bankers and banking institutions need to understand more about the rural poor. They need to remove their notions of hierarchy in thinking. The socially and geographically excluded should be included in the financial system”. He also added, “Over 200 Gram Panchayats in India are still to access banking facilities”.

Ms Manju Agarwal, Deputy Managing Director (Digital Banking and New Business), State Bank of India said about financial inclusion that “Banks are doing it under the mandate of government direction, but not for the opportunity”. She also added, “My vision is that once mobile reaches the rural population, they will be financially included. Aadhar can be used for identifying people and for financial inclusion. Financial inclusion in India is a bank-led model”. She also went on to say, “Based on consumer and data insights, banks can modify their analytics. Digital payments will explode once smartphones reach the last mile customer. Financial literacy to the last mile is essential for a robust financial system in India”. She concluded by saying, “We need all stakeholders to work unified towards this noble cause. The sustainable well-being and economic growth cannot happen without financial inclusion”.

Another panellist, Ms Chetna Gala Sinha, Founder and Chairperson, Mann Deshi Mahila Sahakari Bank Ltd said, “We started with savings not credit, it is a member driven bank, compromising of women. First thing I learnt was if you want to do banking, first thing is savings, and then is door-step banking.” She also added, “It doesn’t just lead to financial inclusion, but she also gets to create wealth. When asked about why they still go to moneylenders, they said we can get a loan when we want, how much ever we want, and can repay it whenever despite higher interest”. “I see Jan Dhan as a way that poor people can get assets. Inclusion isn’t just about going cashless or digital, it's about being in control of finances”, she concluded.