News Update

Niti Aayog, Mastercard release report on digital financial inclusion

By TIOL News Service

NEW DELHI, MAY 11, 2021: NITI Aayog and Mastercard on Monday released a report identifying the challenges in accelerating digital financial inclusion in India and the roadmap to be followed to make digital services accessible to 1.3 billion citizens.

While releasing the report titled ‘Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat,’ Niti Aayog Vice-Chairman Mr Rajiv Kumar said India is seeing increasing digitisation of financial services with technology playing a “transformational” role in bringing the digital disruption.

India is seeing an increasing digitisation of financial services, with consumers shifting from cash to cards, wallets, apps, and UPI," he added.

Based on five roundtable discussions held in October and November, 2020, the report recommends strengthening the payment infrastructure to promote a level playing field for banks and Non-Banking Financial Companies (NBFCs). Enabling agricultural NBFCs to access low-cost capital and deploy a ‘phygital’ (physical and digital) model for achieving better long-term digital outcomes, was another recommendation.

It also pushed for digitising the registration and compliance processes and diversifying credit sources to enable growth opportunities for Micro, Small and Medium Enterprises (MSMEs).

It called for building information sharing systems, including a ‘fraud repository,’ and ensuring that online digital commerce platforms carry warnings to alert consumers to the risk of frauds.

To make city transit seamlessly accessible to all, the report said leveraging existing smartphones and contactless cards, similar to the London Tube system, would lead to an inclusive, interoperable and fully open system.

With India emerging as the hub of digital financial services globally, post-Covid building “resilient systems and encouraging business models that could be change-makers of the future are crucial,” said Niti Aayog CEO Mr Amitabh Kant.

Mastercard Asia Pacific Co-President Mr Ari Sarker said the COVID-19 pandemic has alerted all to the fragility of cash and the resilience of digital technologies, including digital payments.

Even with restrictions, commerce needed to continue to fulfil basic livelihood needs and it was digital technologies that made it possible. Now more than ever, the power of brick-and-mortar distribution channels must parallel in the digital world,” he added.