Technology Program Country Note: India

Why are banks in India reluctant to use branchless banking?

India is the second most populous country in the world. It has 1.2 billion inhabitants, three-quarters of whom live on less than $2 per day. India also boasts a vibrant and fast growing economy with sophisticated banking and technology sectors. Enhancements to the regulatory environment for branchless banking have accelerated in the past three years and particularly in the past 12 months. Various banks and agent networks are actively pursuing branchless banking. Early efforts have opened tens of millions of new “no frills accounts” for the unbanked. Nevertheless, most banks are not highly motivated to use branchless banking because they generally see branchless banking as a corporate social responsibility with limited-to-nonexistent business potential.

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