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Q. New banking facilities of India: Discuss the New banking facilities in India
Nov 24, 2016 Related to : GS Paper-3

Ans :

Introduction-
India’s banking system has taken various steps towards meaning financial inclusion. Payments banks, National Unified USSD Platform etc are recent initiatives in this regard. Earlier RBI has issued payment banking licences to few new ventures. Recently Joint venture of Airtel and Kotak Mahindra Bank has launched its operations in Rajasthan. It is expected that new ventures also starts its venture soon.

Advantages of new ventures-

  • The advantageous with new banking systems, particularly telocom joint ventures with banks is the ready network of existing retailers who can easily double up as banking agents as well.
  • These new ventures have infrastructure of carrying out cash-in and cash-out functions at thousands of locations in each state.
  • Similarly newly launched National Unified USSD Platform (NUUP), anyone with a bank account and an active phone linked to the bank account can transfer money to another bank account, using what NPCI calls Immediate Payment Service, or IMPS.
  • This service can be used by all GSM phones, not just smartphones, to establish a two-way data link between the phone and a designated set of computers.
  • With minimal effort, anyone with a phone can get a mobile money identifier and a mobile personal identification number.

Issues-

  • In India the electronic banking infrastructure has built up capacity that is sadly underutilised.
  • Also usage of IMPS, NUUP are still very rare in India.
  • There also restriction/limit by RBI for the money those e-wallets can spend in a month.
  • Due to these issues people in the rural areas are still struggling to cope with the impact of demonetisation.

Suggestions-

  • There is an urgent need to make proper utilisation of existing e-banking infrastructure and also needs to enhance it as per requirement.
  • People must be trained to get these those required numbers from the bank and to use them.
  • Like urban areas, the UPI and IMPS must be pushed and make them popularised.
  • Similarly limit on e-wallet must be on the basis of rationality and need more practical approach while finalising limit. 

Conclusion-
The recent demonetisation of high value currencies have highlighted the importance of e-banking, which is underutilised in India.  Hence there is urgent need to make utilisation of underutilised e-banking infrastructure in India, and it will solve the problem resulted out of demonetisation. E-banking will promote fair deal in all types of transactions.

  • While this is welcome, the fact is that the country’s 

 


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