Financial inclusion: TRAI chief Khullar bats for telcos

Telecom regulator Rahul Khullar on Wednesday made a case for commercial banks to cede control over at least some small segment of the cash transaction business to the telecom companies.

This should be done in the larger interest of achieving true financial inclusion, Khullar, who is Telecom Regulatory Authority of India (TRAI) Chairman, said at an Assocham event on mobile banking.

"Commercial banks should realise that there is no point protecting this turf anymore", Khullar said, adding that both TRAI and RBI should move beyond their locked-in position and come to a closer agreement on this issue.

TRAI Chairman suggested that banks—while handing over small segment of the cash transaction business to telcos—could strike the best possible deal with telcos to make some money.

Citing the example of Mexico, he pointed out that the central bank of that country had after some persuasion allowed cash transactions upto a small limit be handled only by telcos.

Much of the financial inclusion in India has been held up on the debate of whether it should be bank-led model or telco-led model.

Khullar said that financial inclusion will remain a pipe dream unless measures suggested in a recent TRAI report on broadband were taken to completely overhaul the structure put in place by the government.

Financial inclusion can be deeply achieved by harnessing new technology which does not cater exclusively to those who are already banked or those living in urban areas, he said.

"Do not delude yourself into believing that merely because technology exists it will be suddenly harnessed for everybody’s good, the way it has worked so far at least, it has been harnessed for the good of a very few as only those having devices and are electronically savvy who are in good shape," he said.

He stressed the need to take a firm decision to do something about those who are financially excluded.

"If we are actually serious about financial inclusion we have to snap out of this business for looking at financial inclusion from a narrow lens of electronic banking, mobile wallets and others."

Mere talking about and merely opening accounts will not get the job done. "If millions of accounts will lie dormant then there will be no net outcome and we will be back to from where we had started," he said.

"Government needs to become a serious partner and ask questions beyond how many bank accounts have been opened as unless that is done this will not fly. You have got to be able to have seriousness that India must achieve this goal in next five years," he said.

Both Central and State governments must get involved in pushing the envelope so that accounts do not remain dormant, he said.

srivats.kr@thehindu.co.in

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