The words “banking committee report” and “excitement” aren’t often found in the same sentence. But there’s no other way to describe the reception the Nachiket Mor committee report on financial inclusion has received – both in India and globally.
Commissioned by the Reserve Bank of India and released earlier this year, the report garnered headlines by setting a lofty goal – bank accounts for all Indian adults by 2016 – and laying out an innovative, detailed vision of how to reach it.
Some high points of its approach include:
- Utilizing India’s massive “Aadhaar” national ID card enrollment drive to help locate and verify the identity of new account holders;
- Establishing "payments banks" to provide payment and deposit products (but no loans) to small businesses and low-income households;
- Calling for new banking licenses for non-bank entities to widen access and target the unbanked;
- Giving low-income households and small businesses a legally protected right to be offered only suitable financial services.
If they’re implemented, the Mor committee’s recommendations could prove to be a historic experiment in how public policy and financial institutions can interact to drive financial inclusion. If they're successful, they could provide a valuable model for other developing countries. So we were excited when Mor agreed to discuss the report on NextBillion Financial Innovation. Part one of our two-part Q&A follows. You can read part two here.