In Focus: Moving towards a model of banking for all

Much has been written about the poor state of financial inclusion in India. India ranks fiftieth in the world for financial inclusion and has the second highest number of financially excluded households in the world after China. India has about 600,000 villages, but only 74,000 of those are banked, presenting India with a difficult situation as well as a massive opportunity. The government, the banking industry, and the telecom industry are working at full throttle to provide accessible basic banking facilities. India is implementing change on many fronts, including a new governmentsponsored payment switch, regulations allowing new actors and new roles, implementing high-tech ID's for all (Aadhaar), and government disbursements initiatives. These efforts are all moving India from being a poster child of financial exclusion to a country of modern technology with a vibrant ecosystem and a champion of financial inclusion. It is a work in progress-but one that will be fascinating to watch. We believe in the next few years India will show the rest of the world just how fast a country can transform from one of banking as a privilege to banking for all. Financial Inclusion at the Bottom of the Pyramid' showcases numerous global examples of innovative and pioneering products and services. India is highlighted many times in the book. India understands what other countries need to know.

• Infrastructure is the starting point-it can propel you forward or hold you back. Identity systems are a critical infrastructure to banking the masses. Without them, we can't get there from here.
• We can't underestimate the role of government. While too much government involvement can be counterproductive, the right government involvement can propel things forward. India is striking the right balance here and we believe the next five years will bear this out.
• New actors getting involved is essential. India's regulatory reform includes a number of new financial actors including “payment banks” and “prepaid issuers.” Opening up to nontraditional actors is essential to create a vibrant and innovative market.