NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, February 5, 2015

Dattaram, 50, earns Rs 9,000 a month doing domestic chores in three to four homes in a Mumbai neighbourhood.

He sends most of his earnings to his wife and two children living in a village near Ratnagiri. The money takes a complicated route to reach his family. First, it reaches his brother, who also lives in Mumbai. His brother despatches the money through people from his community who travel to his village. At times, a few hundreds go missing, but Dattaram is reluctant to open a bank account. It’s too complicated, he feels.

Unlike Dattaram, Sunil, 24, is keen to open a bank account. Working as a helper in a canteen for the past three years, Sunil has been sending money to his village near Mathura, Uttar Pradesh, using someone else’s bank account. “His (the account holder’s) mother withdraws the money and gives it to my family,” he says. But Sunil is cell phone savvy — he listens to music and plays the occasional game on it.

The 40-plus applicants for RBI’s payments bank licence will look to unbanked people like Sunil as low-hanging fruit to harvest as their first customers.

The applicants, who include telecom companies, retailers, mobile wallet providers, large business houses and several others, are betting that the country’s huge unbanked population will take to payments banks just as they took to cell phones. And that, seeing people like Sunil, reluctant ones like Dattaram will also be persuaded to join.