In rural India, over-reliance on digital technology has worsen financial exclusion -Rajendran Narayanan and Sakina Dhorajiwala

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published Published on Jan 6, 2021   modified Modified on Jan 6, 2021

-The Indian Express

A technological intervention must have a governance framework in which protection of rights must be fundamental and which provides more choices to the marginalised.

Remember the early days of the internet, when it took several minutes to connect to the web through a dial-in modem? Or when you had to wait in line at an STD booth to make an outstation call? Since then, we have made massive strides in digital technologies. Improvements in internet banking mean that a buffet of products are available at the fingertips of consumers. But imagine if one had to travel miles and wait for several hours to make one banking transaction. This is a reality for the vast majority of the rural populace. In rural India, an over-reliance on digital technology alone has widened the distance between the rights holder and their entitlements. This is exemplified in the pursuit of financial inclusion.

The Direct Benefits Transfer (DBT) initiative is a technology induced step in improving financial inclusion among other stated goals. Although DBT has been operational since 2011, it has become synonymous with the Aadhaar Payments Bridge Systems (APBS) since 2015.

Various government programmes such as maternity entitlements, student scholarships, wages for MGNREGA workers fall under the DBT initiative where money is transferred to the bank accounts of the respective beneficiaries. But the beneficiaries face many hurdles in accessing their money. These are referred to as “last mile challenges”. To deal with these, banking kiosks known as Customer Service Points (CSP) and Banking Correspondents (BC) were promoted. These are private individuals who offer banking services through the Aadhaar Enabled Payment Systems (AePS). Subject to network connectivity and electricity, beneficiaries can perform basic banking transactions such as small deposits and withdrawals at these kiosks.

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The Indian Express, 6 January, 2021,

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