Sunil Jain: What inclusion?

The number of households in the country that don’t have access to bank accounts is estimated at around 112 million and it is to cater to this population that the RBI mandated that banks start opening ‘no frills’ accounts for poor people. Over the last two years, a total of around 25 million such accounts were opened, including those where banks engage what are called ‘business correspondents’, or people who get paid a commission for acting as the bank's agents in a village, collecting and disbursing money on the bank’s behalf — these business correspondents remain in touch with the bank through relatively low-cost mobile phones (with near-field communication capabilities) that back up on the bank's servers regularly. A study of various pilot projects as well as a fully-scaled up project in Andhra Pradesh, however, resulted in Skoch Foundation concluding that just around a tenth of these accounts are active today. (Click here for Financial exclusion)

In other words, a very small fraction of the financially excluded have been brought into the net. According to Skoch, the costs involved in serving the financially excluded are actually quite small compared to the size of the balance sheets of large PSU banks — but since the banks are not bearing the cost but expect the business correspondent to do this, the system is designed to fail.