Financial Kiosks: Panacea for serving the masses in India

Financial Kiosks,as the name suggests, offers a multitude of options for executing financial transactions, e.g.: Cash withdrawal, Cash Deposit, Cheque Deposit, Cheque Cashing (encashing the cheque), Money Transfer, Utility Bill Payment, Payment of Insurance Premia, Purchase/Repurchase of Mutual Funds units, Procurement of Money Orders & Stamps, e-procurement of products from the web, Buying Movie/Train/Air tickets, Dispensing & Encashing loyaty coupons. Given these options, they offer a perfect solution for reaching & serving the masses in the remote & mofussil areas of India.

A recent report indicates that around 100000 bank branches and 40000 ATMs in India are serving the 1.2Billion population, leading to about 12000 citizens being served per branch & 30000 citizens per ATM. These figures do not reflect the true ratios of population served per branch or ATM as the branch & ATM dispersal is skewed. Most of the deployments are in urban areas leaving the citizens in the rural areas high & dry, thereby compelling the RBI to regulate the setting up of new branches & ATMs. Even in the urban areas, long queues are observed outside most of the ATMs. This in itself makes a strong case for deploying Financial Kiosks on pan india basis as the cost of deploying the Kiosks in any of these areas will be more or less the same but the citizens across the nation will get the multitude of services & options with same quality, anywhere & everywhere, 365 days a year.

The Yellow revolution by Sam Pitroda changed the Telecom landscape in India. Time has come to bring about a similar revolution in the financial transactions space by making them all inclusive, i.e involving the rural population and getting them under the banking system.

Some of the key benefits of the new financial system with Financial Kiosks would be:

A) Inclusion of the entire population into the financial/banking system
B) Offer banking, postal & investment avenues to the rural population
C) Bring huge amount of Cash into the mainstream banking which is stashed at rural homes for want of investment options.
D) Stop the introduction of unaccounted cash in the system
E) Bring about a transperancy in the rural borrowing & lending
F) Offer bill payment, entertainment and many other avenues to the rural population

The CSC (Citizen Service Centers) are expected to offer some of the above benefits. The Central government & state governments have been talking about setting up lakhs of such CSCs for the last man years. However, the time to market taken by them raises serious doubts of their effectiveness, leave alone their viability & sustainance, given the business model envisaged in the concept.

I strongly think, time has come for deployment of Financial Kiosks in India by private enterprises and the government & RBI should allow such initiatives from private enterprises. This will not only give filip to the economy but revolutionize the financial system in the country.