India needs to think beyond branch banking and activate remote points of access to ensure quick delivery of cash transfers to the poor that have been announced by the finance minister, according to Bindu Ananth of Dvara Trust.
“The idea should be we tap every single network available to us given the scale and scope of issue,” Ananth, the co-founder and chair of the Trust, told BloombergQuint. “Business correspondents are a very important piece of the puzzle. It is important to include them in essential services so that they can function in areas where we have too few banking branches.”
Activating business correspondents will help people get access to the money that is being transferred into their accounts. “We're still thinking about bank branches. But there is a huge last-mile issue around accessibility to bank branches. We'll have scenarios, theoretically, where people have money in their accounts but they're not able to get to it in time.”
Ananth also said that most small and medium enterprises have seen a collapse in demand due to the lockdown. And while lenders have offered repayment moratoriums, this needs to be formalised. RBI should provide a liquidity window for banks in exchange for giving a moratorium to SMEs. This would help small businesses “keep their lights on” and make sure they do not lay off people.
Watch the full conversation with Bindu Ananth here.
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