Well Done, Governor!
RBI Governor Sanjay Malhotra released the National Strategy for Financial Inclusion (NSFI): 2025-30 on December 1st. This five-year plan makes for a very heartening read for analysts like us who have been tracking financial inclusion policy since 2006. The action points include several familiar ones that we have been advocating for more than a decade at Indicus – such as strengthening BC remuneration with higher incentives for hilly and remote areas and capturing disaggregated data on gender and geography.
But what we find most interesting is that the report presents findings of two surveys - a comprehensive survey of business correspondents to understand the supply-side challenges and a national survey to understand issues that inhibit financial inclusion on the demand-side. By recommending regular such surveys as part of the way forward, the NSFI has made a strategic shift from top-down mandates towards a bottoms-up approach to solving for financial inclusion. This is a much-needed welcome move.
A special shout-out to Annex II, which clearly marks out 47 action points with their corresponding responsible stakeholders and target date for the outcome. Tables IV.1 and IV.2 map the FSP stakeholders to their respective regulators for each action point, making for clarity in accountability. This attention to detail will go a long way in taking financial inclusion to the next level in India.
There is also lots between the lines in the NSFI. For instance, this sentence “To begin with, during the period of NSFI:2025-30, a new series of FI-Index with broader coverage and State/UT level disaggregation may be constructed and published.” Stopping short of calling out the current Financial Inclusion Index as useless, this line is everything we have been asking for since its inception in 2021. The purpose of any data or index is to guide strategy by pointing out gaps that remain to be filled. But the FI-Index as it stands today does very little. Information and data on its constituent parameters are missing, and sub-indices of Access, Usage and Quality have not been released regularly. Transparency on all parameters and data over time, including geographic and gender data is needed, which can help, for example, tracking the number of active women business correspondents in each district or how actively women customers use their bank accounts etc. Now the NSFI 2025-30 looks to address these data gaps, giving hope for meaningful financial inclusion, beyond just access to banking.
There is a lot happening in the UPI space as well- Sohini Rajola, ED-Growth, NPCI, has highlighted the strong transaction momentum, shift in user patterns as low-ticket usage gains popularity, and changing credit landscape with UPI. Ram Rastogi has a post on how BHIM is tackling the fundamental problem of getting Indian households in smaller cities and at lower incomes to participate in the payments revolution. Nikita Kwatra, Khushi Baldota and Anushri Pundit from ArthaGlobal have written on their study on UPI user experiences and the next decade ahead. Meanwhile on the regulatory front, Shayan Ghosh and Anshika Kayastha have revisited the issue of the 30% UPI volume cap that NPCI has been trying to put in place, and they have evaluated various scenarios that could help reduce concentration risk.
Finally, congratulations due to Fino Payments Bank, the first payments bank to get an in-principle approval from RBI to transition to the next level of Small Finance Bank. This takes forward an experiment started a decade ago in differentiated banking for inclusion.
This month we highlight two pieces: a) Swati Sawhney, Leena Datwani and Gayatri Murthy have explained how to reimagine women’s financial pathways in India for financial inclusion to transform into genuine participation and long-term security, and b) Shadma Shaikh has a very fascinating piece on how AI is shaping loan recovery with bots now collecting debts with empathy, an emotion that many real human debt collectors lack.
Do read more news and views in our curated list below. Please also follow our Indicus Centre for Financial Inclusion page on LinkedIn to continue the conversation.
MicroSave Consulting has released an Agent Lifecycle Playbook setting out a structured journey through the six stages of the agent lifecycle, from onboarding and training to grievance resolution and business expansion.
Raghu Mohan, Business Standard, writes on the marked shift in the unsecured credit business dynamics.
LEAD at Krea University has a new landscape study out, in collaboration with The/Nudge Institute Gates Foundation India, that traces how women are participating in emerging forms of digital work and what must change to enable their progress and leadership at scale.
Sahamati, India Insurtech Association (IIA), and KPMG India have put out a comprehensive paper, “How the Account Aggregator Framework can unlock value in the insurance industry”.
Tamal Bandyopadhyay, Business Standard, writes on “50 years of RRBs: A story of reform and transformation in rural India”.
Dharanidhar Tripathy, Business Correspondent Resource Council, writes on the urgent need to strengthen the business correspondent network.
Guillermo Herrera Nimmagadda, Ritika Singh, Akshit Saini and Sanika Talekar, MicroSave Consulting, put out a case study documenting how MSC’s Smart Payment Solution has transformed urban livelihood programs, such as MUKTA (Odisha’s urban employment scheme), in India.
Pratik Bhakta, The Economic Times, reports on banks moving back to physical verification at branches.
Rajesh Bansal writes on the urgent need for a unified, transparent, nomination-led system that can unlock unclaimed financial assets.
Charanjit Singh, former Additional Secretary to the Ministry of Rural Development and Advisor, Transform Rural India (TRI) writes in Mint on how BC Sakhis can be a transformative force.
Sai Krishna Kumaraswamy and Marcel Beer Kremnitzer, CGAP, have a working paper- Competition for Financial Inclusion: A Conceptual Framework - that provides a comprehensive synthesis of global evidence on how competition drives financial inclusion, identifying pathways of competition dynamics that lead to inclusive consumer and market outcomes.
Pami Dua, Deepika Goel Neeraj Kumar and Neha Verma, RIS, have put out a comprehensive paper “Financial Inclusion in India Progress, Issues, and Policy Options”.
Raghu Mohan, Business Standard, looks at the National Strategy for Financial Inclusion, through its focus on business correspondents.
Pratik Bhakta, The Economic Times, reports on the rising trend of fraudsters exploiting small business current accounts to move large volumes of illicit funds, creating fake documents and Udhyam certificates to open mule accounts.
Satyam Mishra, BW Businessworld, writes on the resilience of digital payments with 32 per cent growth in November, as tier-2 and tier-3 users power expansion; industry leaders cite rising trust, QR ubiquity and growing credit-on-UPI adoption.
Payal Malik and Dr. Nikita Jain, ICRIER Prosus Centre of Internet and Digital Economy (IPCIDE), argue that the State must reclaim its role as a market shaper, not just as a regulator, as digital ecosystems grow increasingly centralised.
Stellar roundup on the NSFI 2025-30 release. The shift from top-down mandates to bottoms-up approach through BC and national surveys is exactly what financial inclusion policy needed. I've watched similar programs struggle when they ignore on-the-ground realities, so having Annex II with 47 action points mapped to stakeholders and target dates is actually huge for accountibility. The FI-Index critique is also dead-on, an index that doesn't disaggregate by geography and gender basically misses the entire point of tracking inclusion gaps.