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Role of digital
banking in furthering
financial inclusion
kpmg.com/in
02
Digital India
The Digital India initiative, coupled with a payments
infrastructure, is laying the cornerstone for a digital economy,
keeping in mind the increasing willingness of people to use
the internet, and the rising data traffic in the country. (Refer to
graphs below)
The vision of the initiative, as outlined by the Government of
India, focusses on the provision of infrastructure as a utility to
every citizen, digital empowerment, services on demand and
governance.
03. Financial Services for the Poor, 2013 by CGAP http://www.cgap.org/ accessed 30 June 2015
02. Refers to unbanked population as on 2014; this unbanked population for 2015 might be lower post the
rollout of Pradhan Mantri Jan Dhan Yojana that reportedly added around 16 crore more accounts (http://
pmjdy.gov.in/account-statistics-country.aspx accessed 30 June 2015)
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
03
Aadhar card
The technology-levered Aadhar programme is likely to be the
biggest disruptor in financial inclusion delivery, as innovations
leveraging the Aadhar card are expected to assist in broadbasing the access and acceptance by financially excluded
segments.
An Aadhar card provides a 12-digit individual identification
number, issued by the Unique Identification Authority of India
(UIDAI), to serve as a proof of identity and address. This card
is based on biometrics technology. In addition, the Aadhar
Enabled Payment System (AEPS), an open platform which is a
bank-led model, allows online interoperable financial inclusion
transaction at points of sale (MicroATM) through the business
correspondent of any bank using Aadhar authentication.
Over 880 million Aadhar cards have been issued as on 21 July
2015. The programme aims to achieve 100 per cent coverage
by 2016.06
Following are some innovative initiatives based on demand
side drivers that the Aadhar programme is expected to
propel:
Direct benefits transfer (DBT)
The scheme was initiated to facilitate disbursements of
government entitlements such as those under the National
Rural Employee Guarantee Act (NREGA), social security
pension scheme, handicapped old age pension scheme, etc.
of any central or state government bodies, using Aadhar and
authentication thereof, as supported by UIDAI.
Retail banking
The provision of these services is expected to encourage
electronic retail payments and facilitate inter-operability across
banks in a safe and secured manner.
Creation of a commercially viable rural banking and
financial inclusion model
20
10X
Analytics
Aadhar data is likely to create a huge opportunity for
leveraging analytics for customising services and offerings.
1.8
2012
2020 E
CAGR 20%
CAGR 36%
137
2012
190
2013
526
2018 (P)
China: 777 mn
USA: 274 mn
257
2014
2018 E
05. Digital India- 2015, Department of Electronics and Information Technology, Government of India accessed
30 June 2015
06. https://portal.uidai.gov.in/uidwebportal/dashboard.do accessed 30 June 2015
07. Global Findex (Global Financial Inclusion Database) accessed 30 June 2015
http://planningcommission.gov.in/sectors/dbt/dbt_dist2310.pdf
http://pmjdy.gov.in/account-statistics-country.aspx
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
04
600
40-50%
4X-5X
5X
130
2013
<10%
2020 E
2013
2020 E
150
17
140
170
230
45
257
36
FY14
FY15
50%
40%
30%
20%
60
10%
FY16 E
42
40
100
100
50
25
30
35
FY17 E
FY18 E
FY19 E
FY20 E
0%
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
05
2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
Monish Shah
Partner
Financial Services
T: +91 22 3090 2610
E: monishs@kpmg.com
Kunal Pande
Partner
Financial Services
T: +91 22 3090 1959
E: kpande@kpmg.com
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2015 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
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