The Reserve Bank of India pointed out that the banking capacity of regional banks offers significant opportunities for the economy and banks to build a stable base of retail deposits and reduce volatility through portfolio persification. Indeed, the recent crisis has highlighted the need for banks to reduce their dependence on wholesale deposits and loans and build a portfolio of retail assets and liabilities to ensure financial stability.
Current policy goals of inclusive growth and financial stability cannot be achieved without affordability. However, seeking to improve access to financial services through the introduction of digital products and processes poses challenges in finding trade-offs between the goals of improving access to financial services and financial stability. Few facilities for self-management of digital banking infrastructure and services, unless financial and operational support is provided by digital financial and operational companies such as Techurate.
The facts remain in terms of numbers, with local regional banks far outnumbering city banks. Most of our country still operates from these segments and continues to work on traditional banking methods suffering from poor service and interrupted travel. The global market with a subscriber base of 1.16 billion and has seen strong growth over the past decade, smartphone penetration is around 35%; it also leaves the majority hooked on transaction-capable phones. The crux of the problem lies in the inefficient finances that RRBs face due to their reliance on NABARD and India’s financial inclusion is far superior to that of major developed and emerging economies. Having a huge population per bank branch but lacking access to basic financial services like savings accounts, credit cards and debit cards, internet banking is a major hurdle that needs to be overcome by passing to digital and arguably the only thanks to meeting demographic challenges. posed by rural India.
In India’s quest for financial inclusion, digital is a beacon of hope and arguably the only way to address the demographic challenges posed by rural India. Financial inclusion efforts in India, as stakeholders realize the need for sustainable business models focused on accessible and cost-effective financial services, products and processes, synergistic partnerships with non-banking entities, including technology service providers to effective management of low value and high volume transactions, especially in remote areas and shadow banking zones, and adequate regulatory and risk management policies that ensure financial inclusion and financial stability.
It’s not just about providing a minimum of digital services; it’s about changing the lives of millions of people through convenient, easy-to-use banking services. This is a unique B2B2C model that we believe will bring digital inland banking in a sustainable way for these RRBs. By Harshavardhan Pusala, Founder and Managing Director, Techurate Systems Private Limited.