Mobile banking services as a tool to achieve goal of financial inclusion failed

The financial inclusion program across the country has not yet attained the pace. One of the reasons for this could be lack of people familiarity with the digital technology (digital natives), along with lack of public trust on business correspondents of various banks.

Only small section of Indian people, especially living in rural areas is digital populace comfortable with modern technology such as mobile banking.

K Ramakrishna, chief executive, Indian Banks’ Association, in his speech at a Skoch summit in New Delhi said, “According to recent survey, close to 70 per cent of world’s population is analogue and only 15 per cent of world’s population is digital native. In such a scenario, adoption of mobile banking services as tool for financial inclusion is not going to change the scenario overnight and it would require sustainable effort to achieve the goal of financial inclusion”.

However in India around 50 per cent of mobile phone users do not have a bank account and this further hinders the mobile banking popularity. The bankers informed the other model in which reporters are to publicizing banking through news and articles have also suffered lack of trust. M V Tanksale, executive director, PNB told, “Many business correspondent do not enjoy the confidence of villagers. As a result, they (villagers) do not hand over their savings to such correspondents and that in turn is hampering the speed of financial inclusion”.

According to latest figures around 50 per cent of India’s population is still unbanked. Although majority of PSU banks, who are working on financial inclusion programs, have been able to open 33,024,761 no-frills accounts till March 2009.