Concerted policy efforts were emerging, especially since 2010 to increase financial inclusion (FI) through the planned expansion of the banking network in the hinterland. Beginning with the physical expansion of the banking network into the nationalization-themed hinterland, the journey moved to embrace digital integration. Since the physical FI has limitations in terms of reach, the entry of interoperable technology – core banking solutions has contributed to a faster expansion of digital footprints connecting millions and now billions. The entry of the UPI application by NPCI in 2016 changed the game by facilitating instant electronic transfer of funds.

This has led to the expansion of the network of digital wallets going beyond the limited capacity of physical tools such as debit/credit cards and point-of-sale (POS) terminals to assist FI. Since digital wallets operate over the internet in a scope limited to smart phones, RBI recently launched another digital banking product – UPI123Pay for around 400 feature phone holders. This completes the coverage of over one billion mobile phone users.

In order to fully utilize the synergy of digital banking, efforts are being strengthened one after another to connect people to the formal banking system. RBI, in its statement on development and regulatory policies within the framework of monetary policy, dated October 8, 2021, assured to come with a geolocation framework of payment system touchpoints for easy location and use. easy for the general public.

It is imperative that a robust payment acceptance infrastructure is available and widely distributed, locatable and accessible across the economy. Such an installation of geoMarking payment system touchpoints will allow for proper monitoring of the availability of payment acceptance infrastructure such as POS, Quick Response (QR) codes, etc. In turn, such oversight will support policy intervention to optimize payment infrastructure delivery.

Getting digital banking and payment infrastructure to reach its users is important in bringing FI to the masses through the use of digital power. This is a crucial and stimulating stage in FI. Mapping the location of bank outlets and payment acceptance infrastructure can enhance its usefulness. It can be observed that the payment ecosystem has witnessed rapid developments with a bouquet of payment products, the development of digital platforms, technology-based auto-swipe accounts and services available to consumers through (i) banking infrastructure – branches, extension counters, automatic teller machines (ATMs). ) / Cash Deposit Machines (CDMs), Cash Recycler Machines (CRMs), micro-ATMs used by Business Correspondents (BCs), etc. , Aps, deployed by bank/non-bank payment system operators (PSOs), etc.

They developed in their own way by different banks-non-banks according to their own trade and expansion policy. But its users don’t know where the banking and payment infrastructure is. Unless consumers are able to locate them, full utilization may not be possible. One of the possible ways to bring the user and the financial infrastructure closer together is to geolocate them so that they can be located and accessed.

It is in this context that the connection of the infrastructure with the user is possible thanks to its geolocation. It helps capture the geographic coordinates (latitude and longitude) of payment touchpoints deployed by merchants to receive payments from their customers. Geolocation has various benefits, such as providing information on regional penetration of digital payments; monitor infrastructure density at different locations; identify the scope for deploying additional payment touchpoints; facilitate targeted digital literacy programs. Policy interventions aimed at realizing the above benefits will be facilitated by information available at the click of a mouse. The National Informatics Center (NIC) is also working in coordination with the Financial Services Department of the Ministry of Finance to advance the FI using technology.

Once geolocation is done, financial entities and regulators will understand the spread pattern of banking and payment infrastructure and reflect sparsely available regions and densely dispersed areas. Then, future expansion could shift to areas with little presence to ensure some sort of even distribution of the banking and digital network. Neither certain parts should be left out nor certain areas should have an oversupply of infrastructure. People from all regions should benefit from FI.

Following the spirit of the Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households (Chair: Dr. Nachiket Mor) (2013), most importantly alluded to the need to (i) provide every resident Indian over the age of 18 an individual full-service electronic bank account, (ii) establish widely distributed electronic payment access points offering deposit and withdrawal facilities at a reasonable cost, (iii) provide each low-income household convenient access to formally regulated financial service providers, including (a) credit products, (b) investment and deposit products, and (c) insurance and risk management at a reasonable price, and (iv) to provide each client with the legally protected right to be offered suitable financial services.

It is contextual that the committee has advocated for interoperability and the availability of banking touchpoints in one form or another at the last mile. Interoperability is not just about access to banking services at a touchpoint 15 minutes away on foot, but other financial services as well. These services are to be provided ethically without any overselling through a concept of suitability. If the letter and the spirit of the committee must be implemented, geolocation is a precursor. It will be able to trace the availability of points of sale and their model in order to eventually evolve towards full FI.

It is not possible to extend banking to the masses through a physical presence due to many efficiency and sustainability factors. Therefore, complementing physical expansion with digital IF is the almost feasible way to reach the masses. Having made great strides in FI and having built a resounding digital ecosystem, the next step is to spot the utility so that the next point – location of digital/physical footprint presence can be planned.

Geolocation is an idea that can lead to the next stage of digital FI. After working hard to achieve FI with the help of PMJDY, BSBDA – Zero Balance Accounts, Direct Benefit Transfer (DBT), Introduction of Digital Products, Adhaar Linkage of Bank Accounts, Issuance of Debit Cards, Point Spread sale and now geolocation of banking infrastructure, the stage is set for the next level of FI.

After having strengthened all of FI’s levers, there is only one long-term project left. Financial literacy, digital literacy and financial education to enable people to harness the full potential of the financial system. Educate customers not only on opening bank accounts but also on transactions, use of digital products, most importantly on borrowing from banks and non-banks through app-based services and instilling the culture of loan repayment so that recycling of resources is possible and more and more people will be able to use the same financial resources to grow and expand the size of the economy to meet national aspirations.

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