Presenting Budget 2021-22, Finance Minister Nirmala Sitharaman announced that all of 1.5 lakh post offices will come under the core banking system which will enable financial inclusion and access to accounts through net banking, mobile banking, ATMs, and also provide online transfer of funds between post office accounts and bank accounts. “This is a big push for the digital economy in rural India,” said Neeraj Agarwala, Partner, Nangia Andersen India.
“This will be helpful especially for farmers and senior citizens in rural areas, enabling interoperability, and financial inclusion,” Sitharaman said.
This is in line with the government’s mission to establish financial inclusion in the country. The government had initiated the National Mission for Financial Inclusion (NMFI), in August 2014 to provide universal banking services for every unbanked household, based on the guiding principles of banking the unbanked, securing the unsecured, funding the unfunded and serving unserved and underserved areas.
Sandeep Jhunjhunwala, Partner, Nangia Andersen LLP, said, “To take the agenda forward, the government proposed to set up 75 digital banking units in 75 districts by scheduled commercial banks. The Budget shows focus on use of payment platforms that are economical and user friendly.”
Meanwhile, ICICI Direct maintained, “Enablement of net banking and fund transfer for Indian Post will enable better financial inclusion. Also, the opening of 75 digital banking units in 75 districts by SCBs will increase digital inclusion. Garnering liabilities and distribution of financial products becomes more viable for the banking sector along with ease of access to customers.”
The announcement of opening 75 digital banking units will meet the lifestyles and demands of all consumer segments, removing friction from the payment process and making it more frictionless than ever before, said CapitalVia Global Research Limited. “To make the digital ecosystem safe and secure for individuals and businesses, a push is being made for projects to expand digital infrastructure, improve internet access, increase payment touchpoints, and improve cybersecurity,” it said.
The said announcement is expected to further help give the much needed thrust to a growing Fintech start-up sector.