Financial Inclusion in India

Home Forums India Stack – Ideas for the Future Financial Inclusion in India

This topic contains 6 replies, has 5 voices, and was last updated by  Raghu Ram 1 year, 8 months ago.

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    Nikhil Kumar

    Any ideas on the future of – Banking, Lending, Savings in India!



    Hi Nikhil,

    Can India Stack assist me in helping the underbanked and financially undeserved Micro enterprises in rural and semi urban areas ? I want to create a social responsible platform to weed out the evils of “informal lending” in our society.
    I really dont know know where to start from or who to contact.


    Nikhil Kumar


    You can get started with the India Stack APIs for the technology backbone of your platform. The use of Aadhaar allows you to verify an individual’s identity remotely, UPI allows you to Push/Pull payments between banking accounts, eSIGN can be used to allow users to sign documents digitally and finally you can use DigiLocker/Consent to get more information about an user to calculate his credit worthiness.



    In India, Many people are still in Informal sector and some lower income salaried people are also Lending money for their short term needs from Money Lenders for higher interest rates (will be 1% per Day!). If we drive the community towards banks for short term loans (for some Days) rather than money lenders, It will be the real Financial inclusion. For a country like India, Universal basic income scheme was not a good idea ( Un-productive) .Instead of this we can go for Over Draft (OD) model in associate with NPCI, RBI, Banks.
    1) ELIGIBLITY: Every person In India with Only One Bank Account across ALL SHEDULED COMMERCIAL BANKS.
    2) OD Extension: Rs 20,000/- Per Person.
    3) Interest Rate: As per Bank norms,
    4) What Scheme Cover: Government or Bodies will reimburse the Interest with Cap of Highest 6% per Person on Monthly Basis
    5) Guarantee: Because of the person have only one account at any time, and he can’t open a new account

    1) Guarantee to Banks for their money
    2) Capital Requirements for banks

    Role of NPCI:
    1) Mapping the All bank accounts of a person in All scheduled commercial bank with AADHAAR.
    2) Assure the banks by providing a LOCK of a Person AADHAAR and Bank Details.
    3) To prevent the person who want open a new account in another bank until and unless clearing the OD amount with old bank by providing a Lock.

    Role of RBI:
    • Formulate rules and encouraging the all Banks towards this OD model for Broad Interests of NATION.

    Key Stakeholders:
    Union Govt, State Govt, NGO’s, Religious Boards, any other Bodies with financially well off.

    Role of Central Governments:
    1) Aggregate the all stake Holders and providing Tax incentives to them.
    2) Since it is performance based scheme,it will productive to nation

    Costing :

    If a Person taken an amount of Rs 20,000/- as OD,for this amount interest(6%) will be Rs 100/- per can reimbursed by Union Govt, State Govt, NGO’s, Religious Boards, any other Bodies like NABARD which are financially well off.

    • This reply was modified 2 years, 8 months ago by  kvnswami.


    @kvnswami PMJDY has such a scheme and OD limit is capped at 5,000. NPCI provides Aadhaar Overdraft Validation Service doing some of the checks you mentioned. There are ethical lines about this kind of OD although, which one might / might not subscribe depending on political views.


    Raghu Ram

    Hi Nikhil

    I would like to know what would be the credit scoring mechanism for someone who do not have a CIBIL score or a potential first time borrower? Are there any standardization in alternative lending score? There are lot of Fintech companies who come up with their proprietory credit scoring model which are not validated by any authority. Is it legal?


    Raghu Ram

    Hi Bharat

    I am starting a Fintech with focus on rural and semi urban population. It would be great to sync up with you and share the thoughts. Please send me your email id if you are interested for a chat.

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