Digital Banking: Power to people

Mumbai, July 27 (UNI) Although electronic payment system is still largely concentrated on high-end utilities and products, the common man is also getting into the act with 60 per cent of the sales being for non AC (air-conditioned) class, IRTC General Manager (operations), Sanjay Agarwal said.

Speaking at ''Digital Payments 2008'' conference here on Friday, Mr Agarwal said the electronic payment system could also be of great help to small traders like vegetable vendors in urban areas and migrant workers who cannot easily open bank accounts but need to make prompt payments for their daily transactions. Self Help Groups (SHGs) under micro finance schemes could also be beneficiaries.

TechProcess Solutions CEO Bikramjit Sen said, ''All the infrastructure has been concentrated in the biggest 10-15 cities of the country. When pan service is provided across the country, things will look up. This would bring the cost down and would benefit industries like insurance where transaction costs are high.'' However, what is stopping the growth are the banks and service providers themselves. While on one hand, banks pushing to break into new markets, they refuse upto 50 per cent of credit card applications. This has severely hampered the growth of the industry and diluted the confidence of consumers. Banks have also hesitated to undertake big transactions and have not developed clear-cut procedures, it was observed during the conference.

''While banks and financial institutions have made use of technological advances, they will have to integrate them with the traditional system and their convergence is inevitable'', Mr Bikramjit said.

Already, the ball is rolling with the RBI expected to come out with its draft within a fortnight and has come out with guidelines for banks to follow. With the system in place, the country needs to tap the spending power of its people if it wants a place in the sun, he added.

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