Financial inclusion, which many think is an obligation, actually could be a Rs 3,500 crore opportunity for financial sector provided stakeholders take appropriate steps to increase financial penetration from the current 47% to 80%, says a Confederation of Indian Industry (CII)- Boston Consulting Group (BCG) report 'Financial Inclusion - From Obligation to Opportunity'.
"If all stakeholders work together, it is expected that formal financial penetration will increase from the 47% to 80 % in five years and the financial service providers would be able to unlock a hitherto untapped profit opportunity of R3,500 crore per annum by the fifth year," said Janmejaya Sinha, chairman, BCG Asia-Pacific, while releasing the report.
Rather using traditional branch banking model, the report advocates use business correspondents, leveraging Unique Identification Number drive by opening bank account simultaneously and enhancement of business correspondent guidelines to include for profit companies to speed up the financial inclusion.
"Using the traditional approach for financial inclusion will lead to a loss of R20,000 crore for the banking system," said Neeraj Aggarwal, partner and director, BCG. "A radical rework of the current business models is required to convert this obligation into an opportunity," he added.