Role of Mobile Banking in Financial Inclusion

13 Pages Posted: 24 Aug 2014 Last revised: 2 Dec 2014

See all articles by Ardhendu Shekhar Singh

Ardhendu Shekhar Singh

Symbiosis School of Banking and Finance, Symbiosis International University

Bhama Venkataramani

Symbiosis International University

Dilip Ambarkhane

Symbiosis International University - Symbiosis School of Banking & Finance

Date Written: August 23, 2014

Abstract

There is increased emphasis on financial inclusion from the Government, regulators, banks, NGOs, and individuals. Proponents of development finance like Md. Yunus are going to the extent of making it as a fundamental right of an individual. But, there is demand as well as supply side constraints to it. A large section of the society is deprived of financial services like credit, loan, insurance, financial education, remittances, pension etc. So does it mean that the poor are not availing the financial services? The answer to it is no. They have got their own mechanism to do so, and they do it in multiple ways involving informal sources (Collins et al, 2009). Here, informal methods serve the purpose, but it is much more costly and has various ill effects. In this situation mobile banking seems to a feasible solution. It has got benefits for multiple stakeholders. At the macro level use of mobile banking will increase the flow of money, spread entrepreneurship, and increase Gross Domestic Product. At the same time there are limitations or dangers of mobile banking at macro level. It could lead to increased instances of money laundering and may be in criminal activities. Whereas, at micro level it will benefit the organization as well as consumers in terms of addressing constraints being faced by them.

The objective of this paper is to highlight the importance of mobile banking in bringing about financial inclusion in a developing country like India. Although we will emphasize its relevance in the Indian context, it should be applicable to the poor in general residing in similar conditions elsewhere. To make it happen we propose a tripartite institutional arrangement involving one of the largest network in the country i.e. India Post.

Keywords: Mobile Banking, Financial Inclusion, India

Suggested Citation

Singh, Ardhendu Shekhar and Venkataramani, Bhama and Ambarkhane, Dilip, Role of Mobile Banking in Financial Inclusion (August 23, 2014). Available at SSRN: https://ssrn.com/abstract=2485777 or http://dx.doi.org/10.2139/ssrn.2485777

Ardhendu Shekhar Singh (Contact Author)

Symbiosis School of Banking and Finance, Symbiosis International University ( email )

Gram Lavale
Taluka- Mulshi
Pune, Maharashtra 412115
India
918793103539 (Phone)

HOME PAGE: http://www.ssbf.edu.in

Bhama Venkataramani

Symbiosis International University ( email )

Gram Lavale
Taluka- Mulshi
Pune, Maharashtra 412115
India

Dilip Ambarkhane

Symbiosis International University - Symbiosis School of Banking & Finance ( email )

Symbiosis School of Banking and Finance
Gram-Lavale , Taluka- Mulshi
Pune, Maharashtra 412115
India

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