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U F A By 2013 Sanjay Bhargava

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U F A By 2013 Sanjay Bhargava

  1. 1. c k CAB CALLING | April - June, 2009 Universal Financial Access and Financial Inclusion Financial inclusion initiatives, as of now, seem to be cosmetic. Many districts – 204 of the 431 identified at the last count, were declared to be 100 per cent financially included but a close examination reveals that most of the no frills accounts opened are inoperative or dormant. We may rechristen the real financial inclusion where the customer feels and enjoys adequate financial access as “Universal Financial Access” (UFA). UFA can be thought of as 100 per cent real financial inclusion and could be achieved by 2013. By UFA, we mean that all legal residents of India must have access to savings, loans, investments, insurance and pensions at affordable prices. Transaction ticket size should not be a barrier. The biggest challenge in achieving UFA by 2013 is not technical. For years, the common man got used to handouts, doles, loan melas, loan waivers, etc. Currently, financial products are not designed from a total experience point of view. If one borrows Rs. 3000 for buying medicines and repays Rs. 1000 on day 7, Rs. 500 on day 15, Rs 1000 on day 32 and the balance on day 45, the interest she pays is approx Rs 150 at 60 per cent per annum. If she takes a one year loan at 25 per cent interest on reducing balance basis and repays over one year her interest cost is Rs 400. In addition, in the formal system she has to attend group meetings and make 12 repayments Universal which will cost her. That’s why she seems to choose the money lender at 60 per cent per annum over the formal system at 25 per cent. Thus, the challenge for the formal system is to design products and services which, Financial Access on a total experience basis, are better than the informal system and provide a path to financial independence for the common man. Even if this is done, the task of convincing the common man to use these products and services is not easy and will have to be well planned and executed. The informal by system will do all they can to derail the formal system. 2013: Why do we want the common persons to be part of the formal system? The answer to this logical question is that the informal system works well in a feudal society where aspirations of the common man are controlled. If we Is it Possible? want inclusive growth, then we need all our citizens to be part of the formal system so that they have the opportunity to go as far as their talent and hard work can take them. For the country, the multiplier effects of all citizens Sanjay Bhargava* being part of the formal system are huge. It is, thus, a win-win situation for the country and the common man. *UFA Evangelist, New Delhi. The opinions expressed are personal and intended to generate discussions. Usual disclaimers apply. 23
  2. 2. c k CAB CALLING | April - June, 2009 UFA by 2013: A National Priority Movement have been taken from the work done by committees such as the Rangarajan Committee and Raghuram Rajan Universal Financial Access where every legal resident in Committee. Most of the ideas are not revolutionary. They try India has access to savings, credit, investment, pensions to use what exists and is proven. That is the good part. We do and insurance is an elusive dream that India has chased for not have to invent much to reach our goal. We just need to many years. This article makes the bold claim that UFA by look at our processes and think in innovative ways to dispel 2013 will be a reality if it is made a national priority. It further cobwebs of the past. claims that this can be done without subsidies and the cost to government would be zero or negative. Given the inclusive Autonomous UFA Authority growth agenda of the government, it would make eminent sense to elevate UFA by 2013 as one of the national We suggest that there should be an autonomous authority priorities. with the Prime Minister as Chairman and with an empowered Deputy Chairman to make sure UFA is achieved. This body One may be tempted to think that these are wild ideas of a will need to work with numerous stakeholders but with single crazy person and will never be realized. We would not blame point responsibility and accountability. We strongly believe such thoughts but consider the following: that such an authority is required but this again is a how question and there maybe a different or better way. It is pertinent to note that a National Mission for Financial l When JFK set a goal to put an American man on the Inclusion is also a recommendation of the Rangarajan moon no one had all the answers. Money and talent Committee. Expanding the role of the NUIA where Nandan rushed in and the dream became a reality; Nilekani has recently been appointed as Chairman to be the autonomous UFA Authority could be considered. l In telecom, the government made money by auctioning circles and getting a share of revenue and Inspiring Goals taxes. Private capital funded the massive infrastructure required. If the government had gone In case UFA by 2013 is made a national priority, then down a different route and asked MTNL and BSNL to measurable goals that inspire a nation should be set. These make telecom reach the masses, it would probably goals could be have spent billions to serve less than a few million. v Every legal resident and/or citizen of India ( individual Mohammad Yunus famously said during his Nobel and institution) will have a bank account, acceptance speech, “we wanted to go the moon, so we went v Rs. 3,00,000 crore will be available for lending to the there; we achieve what we want to achieve. If we are not weaker sections at 15 per cent or less, achieving something, it is because we have not put our v Cash transactions will reduce by 50 per cent and be minds to it. We create what we want.” replaced by electronic transfers, v Every legal resident and/or citizen of India will have a What vs. How? unique national ID and a reputation score such that there are no loan addicts and systemic risk is minimal, It is important to distinguish between what needs to be done v Transactions will be highly secure and easy to use by (UFA by 2013) and how it is to be done. We have done honest people and will be tough for criminals and extensive work on the “how” question which is all in the terrorists, public domain and can be downloaded from http://www.slideshare.net/sbhargav1. Our ideas may not be The goals, if and when set, may be quite different from this good and there may be better ways to reach the goal. It is initial set but we should ensure that the goals are not vague important that government and regulators should lay out and that there is hundred percent integrity in measurement. what needs to be done without specifying how. Regulators This maybe a wishful thinking but we think our citizens have need to retain control on the “how” by approving plans and matured enough to see through empty promises and would monitoring execution to protect the consumer but they also be willing to reward a government which sets ambitious need to ensure UFA for the consumer. At times, a trade off goals, involves people, demands excellence, minimizes may be required between access and protection. Our corruption and reports progress with integrity even if the comments on the ‘how’ question should be treated as one of goals are not 100 per cent achieved. the possible routes and not the only route. A lot of these ideas 24
  3. 3. c k CAB CALLING | April - June, 2009 The UFA Opportunity transport, etc., then the aggregate credit need is Rs. 240,00,000 crore. To encourage savings and limit bank The task to achieve UFA is not for the faint hearted. It is tough costs, the tax free interest rate in these accounts could be like putting a man on the moon but not impossible like boiling zero till Rs 5000, 3.5 percent till Rs. 20000 and 5 percent the ocean. The most interesting aspect is the opportunity. It beyond Rs. 20000 and upto Rs.50000. is clear that a consumer will be willing to spend much more in a lifetime on financial services than on communication Designing mobile wallets just for the poor will not work services. The revenue that can be earned is more than the because the element of cross subsidy – the rich subsidising revenue for telecom. Innovations like plastic cards and the poor - goes away. Thus, investments made now to get a ATM’s made consumer banking profitable for the middle first mover advantage could be very productive. Some of class. Now innovations like mobiles will make it possible to these new techniques could wipe out current ways of doing provide profitable financial services to even the poorest of things. For instance, virtual cards may replace plastic cards. the poor. Incumbents who have made investments in these will worry about cannibalization. Disruptive innovation could be a great Private capital recognizes this opportunity and is moving in growth strategy for smaller banks and remember that in despite the regulatory uncertainty. However, the flow is foreign countries, even banks like SBI are small banks limited and competition is not fierce. There are no targets competing with the large banks of that country. that players have to achieve. If UFA was declared a national priority and UFA licenses were sold, we think the floodgates In India those banks, whether big or small, which are first will open and money and consequently talent will rush in. movers in this area will reap huge gains. This is why we feel With telecom, private capital has seen how items such as that if UFA by 2013 was declared a national priority and ring tones, caller tunes and so on became major revenue circles were auctioned there would be many bidders. The contributors. In financial services also, you may see some circles would sell at a high price and the government would new opportunities emerge. In the case of financial services, make money enabling it to reduce the fiscal deficit. money lenders are able to charge huge premiums. Disrupting that market by itself could be very profitable. Disruptive Innovation and Game Changers Branchless Banking We talked about how Rs. 3, 00,000 crore could be raised at 5 per cent or less, which is much lower than the rate on Very few bank Chairmen recognize today that UFA could be NABARD bonds, for priority lending. A small regulatory the growth engine that significantly improves their global change could make this happen. This regulatory change market share. Serving the masses profitably requires could be a game changer. If the cost of opening and innovations that could be used across all customer maintaining an inactive account was close to zero then even segments and globally. For instance, if they perfect low balance accounts can be profitable. A very low cost branchless banking in India using web, mobile and tending to zero cost account is possible if no documents are correspondents then, they could tap the huge Indian required to open an account with pattern recognition, strict Diasporas globally. In countries like USA, even banks like usage limits and if there is no physical passbook or physical SBI cannot open huge number of branches. statement requirement. Consider this proposal. Let’s say if every customer had a The new pension scheme could take off if every employer mobile wallet and the average balances in these accounts including individuals had to contribute at least Rs. 5000 or 10 were Rs. 10000 (Rs. 50000 for some and Rs. 100 for some). percent of annual wages whichever is lower towards their The account may be paid upto 5 per cent interest on daily employee’s pension every year. This means that every balances which may be exempt from tax and may also be working adult will have a pension account and maybe a exempt from reserve requirements. The outstanding linked account. Again one relatively simple law that requires balances in these accounts may be lent only to the priority every employer whose employees are not covered by sectors and a reputation bureau ensures that defaults on schemes like EPFO to ensure that their employees have these loans were manageable. Banks could raise around pension accounts under NPS and that they contribute into Rs. 3, 00,000 crore through roughly 30 crore accounts as that account for each employee. This is another game deposits and lend the amount. If the credit need of each of changer. these 30 crore customers is, say, Rs 8 lakh for things like an affordable housing, education, health, entrepreneurship, The PRAN number in the new pension scheme is similar to a 25
  4. 4. c k CAB CALLING | April - June, 2009 social security number (SSN). Every resident and citizen of in Box 1. USA has an SSN even if they do not have any pension savings. Can PRAN be the elusive unique national ID India Box 1: Suggestions for Business needs? Can these be issued to all Indians in 90 to 180 days? Correspondent Model and Branch Free For rapid and flawless execution, may be, our armed forces Banking or our prospective army of UFA members can help in designing and executing the logistics of issuing national ID’s. q BCs can mobilize Rs. 3, 00,000 crore in accounts that This could be a major game changer. pay upto 5 per cent tax free interest on a daily basis. Regulation must allow this and citizens must be While these may not be the game changers that we want, we encouraged to keep upto Rs. 50000 in these “Inclusive have to think of disruptive innovation and game changers Growth Accounts” (IGA) as a patriotic duty. which are rapidly executed. When there is a will we will find a way. q The deposits mobilized could be exempt from reserve requirements and used for priority sector lending only. Business Correspondents and Facilitators However, to build the right credit culture and avoid loan addicts a reputation bureau is required. BC model has not taken off so far at scale. A friend, tongue in cheek, referred to India as the land of a billion people with a q India has one of the lowest cost distribution networks million pilots. One of the mistakes we are making is not for retail products and prepaid recharge. This must be thinking of shared BCs concept. Just as every airline does leveraged and there is no need to reinvent the wheel. not have its own airport, every bank should not have its own The best DNA fit for BC is telecom prepaid recharge BCs. The other is not recognizing the difference between outlets BCs and BFs. Retail points like prepaid recharge shops make excellent BCs because they understand cash q BCs should not be limited to just serving the rural poor. handling and recharging an account and do not need To have an economically viable model for BCs, we additional infrastructure. They need minimal training. Cash have to think big and serving all classes of customers. deposits and withdrawals or opening accounts are like new products they have to sell just as they sell many retail q There is a difference between the BC and the products. However, using these points to acquire, educate employees or agents of the BC. The BC may have to and service customers is not going to work because this is be a not for profit company with minimum capital very different from their skill set. Agents who sell mutual requirements and good management but then the funds, insurance have the skill set needed for the acquire- company should be free to operate in a manner it educate-service functions. If some of these agents have deems fit. Unless banks are comfortable with the been spoilt by high commissions and acting in their own and controls that BCs have, they will not appoint them as not their customer’s interest, then we may need new agents BCs. who do not carry baggage from the past. There are several under employed people like non working spouses or retired q To keep costs low, it is vital that the BC infrastructure is people who would make excellent agents and would be shared. Just as airlines do not have their own airports happy with a small amount of supplemental income. and yet compete with each other, banks do not need their own BCs. Post offices have been talked of as BCs/BFs and they may be good because of their reach but again they will need q While there are good arguments for large for-profit training and systems and their organizational DNA may not BCs, large not-for-profit BCs may be preferred be suited to this role. People have often wondered why MFI’s because it maybe easier for them to be more customer are not keen to do the BC/BF business. Again the oriented and to continually strive for cost reduction as organizational DNA may not be a good fit. CSCs or kiosks volumes scale. are just way too heavy overhead-wise to compete with the other forms and these rely on their major income coming q Not-for-profit BCs must attract top quality talent and from their BF or BC activities. pay outcome based bonuses to employees. Some of the suggestions for the Indian Business q BCs will need to be funded well till breakeven. Correspondent Model and Branchfree Banking are outlined Foundations could fund them with large soft loans and 26
  5. 5. c k CAB CALLING | April - June, 2009 not grants as BCs will have the capacity to repay these The reputation bureau can also act as a document repository loans and do not need grants. so that people do not have to give photographs, copy of PAN cards again and again. Fake documents can also be q BCs and BFs can make Rs. 6660 crore revenue eliminated by setting up electronic verification with issuing annually. Some of this will be shared with agents. This authorities. The reputation bureau will be for every one, rich does not include transaction fees paid to retail or poor, and the key identifier will be the unique national ID transaction points as it is assumed that the banks which could be the PRAN from the new pension scheme. A would pay these with the BC just acting as a pass reputation bureau would cut the cost of customer acquisition through entity. and credit appraisal. It could also be used by employers and security agencies. The reputation bureau could also be used u Customer acquisition: Rs. 10 per customer. 30 to identify and monitor household that are BPL (Below crores customers – Rs. 300 crore Poverty Line) or qualify for various welfare schemes. With techniques such as, random sampling, fraud can be u Customer service: Re. 1 per customer per significantly eliminated. month. 30 crore customers – Rs. 360 crore Designing a reputation bureau that can get started u Deposit mobilization: 1% of Rs. 3,00,000 crore – immediately and becomes better with time is not easy but Rs. 3000 crore with advances in technology and database design it is entirely possible to make a revolutionary impact that will help u Demand Aggregation: Rs. 100 per customer- 30 honest people resident in India realize the Indian dream. It crore customers – Rs. 3000 crore will also deter dishonest people. The biggest benefit of a reputation bureau is in changing attitudes towards being part Reputation Bureau of the formal system. If the common man can see the benefits of enhancing their reputation score, the current A credit bureau is based on documents and on payment mindset of trying to beat the system and stay out of it will history. What does one do if a person has neither? In that change. With the setting up of UID Authority of India with case, we need to see the cash flow of the persons and whom Nandan Nilekani as Chairman, we hope to see reputation they know and who knows them. Generally, lending based bureaus emerge as they are a logical extension of a National on gender or on peer groups works for small amounts. We Unique ID database. should be sceptical of scalability and worry about multiple borrowing with progressively increasing household debt The ideas of Innovative Server Based Smart Card Free which will collapse when fresh debt is no longer available. Reputation Bureaus are enumerated in Box 2. Pumping more money into microfinance without a reputation bureau and without educating people to use credit Box 2: Innovative Smart Card Free Server responsibly is an invitation to disaster. If lending is done Based Reputation Bureaus· without a reputation bureau and scales to the kind of credit required (Rs. 240 trillion) then, the financial crisis that could q At Rs. 8 lakh (Rs. 5 lakh for housing, Rs. 1 lakh for hit India will make the current global crisis look tame. It may education/entrepreneurship, Rs. 75000 for take many years to hit but the effects will be devastating. transport/consumer durables and the rest for other needs) for 30 crore customers, the need for credit is We also have to deal with the history of loan melas, hand Rs. 240 trillion. This estimate may be contested but outs, loan waivers. How do we convince people who are the key point is that the credit needs of India are used to this culture to switch to a culture where using credit massive. responsibly gets you lower rates and access to more credit? This is not an easy task and this is where the UFA by 2013 q Box 1 showed how Rs. 3 trillion could be raised just army of volunteers and BF (Business Facilitators) can make from savings accounts. Rs. 240 trillion will be a difference. Imagine a reputation bureau which has required during many years from now as currently information on your cash flow, your relationships and your households do not have the cash flow to support Rs. employment history. To build your reputation score, the 8 lakh of household debt. period that you have been a member is important. This acts as a deterrent for people spoiling their reputations and then q This touches upon an important issue of the ability of starting with a new identity. households to pay back debt. Current lending rates 27
  6. 6. c k CAB CALLING | April - June, 2009 of 25 per cent plus may not be a road out of poverty everyday life with a bad one being the reverse. but a road into a debt trap. q There must be controls to prevent a person with a q At Rs. 240 trillion, a 5 per cent default rate is Rs. 12 bad reputation coming back with a new ID. As long as trillion. Peer pressure and lending to women are not the reputation score algorithm has time in the system scalable. India needs an innovative reputation as an important variable and getting a new ID is tough bureau to prevent a nation of loan addicts this can be well controlled. q Four main points, (i) there should be one or two q A reputation bureau combines credit bureaus and national identity bureaus based on unique national learnings from microfinance and leapfrogs existing ID’s that talk to each other; (ii) a server centric credit bureaus. If USA was to build credit bureaus approach is far cheaper than a card centric now, it would build reputation bureaus not credit approach; (iii) numeric signatures are better than bureaus. fingerprint biometrics and, (iv) reputation bureaus can drive down costs by making the credit process Global Payment Switch instant and lowering defaults thus making the dream of low cost unsecured lending a reality, are to be Remittances for migrant workers are dominated by Western considered. Union because of its agent network, proprietary switch and regulatory clearances. A Global Payment Switch with all q The government should invite proposals to build retailers who do prepaid telecom as agents would reduce the these bureaus and possibly take a minority equity cost of remittances for migrant workers by over 50 per cent. stake and a board seat. While the author advocates a Bill collection is a major challenge for service providers. smart card free approach, all approaches should be There is a cost of generating the bill, printing it, distributing it, welcomed by the government. collecting it and posting the payment to the right account. In addition, the cost of money for individuals is much less than q Reputation bureaus differ from credit bureaus. They that for companies. Taking all these into account, the Global have data on the customer’s cash flow and on who Payment Switch could facilitate bill payments for small and the customer knows and who knows them. They big billers where friction is reduced and all parties benefit. have links to document issuing authorities so that they can instantly verify whether a document With the Global Payment Switch, directed loans also submitted is fake or genuine. become possible. A loan giver can ensure that the loan proceeds are sent directly for purchase of seeds, pesticides, q The social networking aspect of reputation bureaus farm equipment, etc. A lender to retail shops can pay mirrors peer groups and self help groups but at a suppliers to the retail shop so that they are certain that a loan fraction of the cost and with much greater flexibility. A meant for working capital for the retailer is not diverted to buy person may vouch for the character of a friend but gold, property or stocks. From a social standpoint, probably, may not be jointly and severally liable. If the friend the biggest benefit will be in the area of mass payments such uses credit responsibly, the person who vouched for as NREGA payments and welfare payments. In addition, it him benefits with a higher score. If the friend defaults will become possible to eliminate subsidies and pay poorer the score gets impacted. At any point a friend can people directly. The vast Public Distribution System could be revoke their recommendation. Jointly and severally dismantled entirely. Goods will be available to rich and poor liable groups can also be created. at market prices but poorer people will get welfare payments through the Global Payment Switch. Educational institutions q Reputation bureaus can mimic microfinance group will be able to charge market prices but poorer students will meetings at a fraction of the cost, thus, lowering the receive money to pay the fees. cost of credit. The financial literacy aspects and human interaction cannot be mimicked and will have The revenues, on a conservative estimate, for the switch to be tackled separately by business facilitators. providers and end customer providers are very high. Indian revenues could be Rs. 3000 crore per year while global q For the reputation bureau to work, people must value revenues could exceed $6 billion annually. their reputation scores and one way of doing this is to make a good reputation score a facilitator for 28
  7. 7. c k CAB CALLING | April - June, 2009 KYC Requirements scales. Smart cards offer a non telecom based solution but mobiles talk more intelligently than smart cards. Regulators In a country where lot of people have no documents and fake and the government should be agnostic as to whether smart documents are rampant, we are fooling ourselves when we cards are better or mobiles are better. They should think that document based KYC protects us from anti money encourage both. It is quite likely that people like the fact that laundering and helps us in combating the financing of they have a physical card. Maybe mobiles will evolve such terrorism. The current system makes it difficult for honest that you personalize your mobile and it serves the status and people while criminals/terrorists find ways around it, so you comfort feelings of a personal device. get the worst of both worlds. Regulators can say that they have recognized this and have limited KYC where a letter Vested Interests from a panchayat official is enough. There is always the problem of panchayat functionary demanding a bribe and/or As with any major change there are going to be winners and the institution inability to determine if the letter is a fake or losers. Incumbents do not want change and do all they can to not. For a criminal or terrorist it will be quite easy to fake this block it. People whose jobs depend on existing poverty will document. have to get new ones if poverty is eradicated. Poor people work for less wages. Wars have been fought over the Lets for the moment make a radical departure. Let’s say to abolition of slavery. We want to eradicate poverty so that we open an account one needs no document. Initially the can live in a safer world as poverty leads to a lot of social ills account has strict usage limits. These accounts can receive like terrorism, separatist movements, etc. The winners will money from welfare payments and upto say Rs. 3000 a gain financially if poverty is eradicated so all of us should month from third parties. Within 90 days, she has to submit a think like winners. The forces of voter ID card number or unique change are strong and hence the national ID and then usage limits may slogan “adapt or die” is more be relaxed after the voter ID is applicable than ever before. electronically verified by sending the picture to the retail transacting point. At the same time, incumbents are Every adult citizen must have a voter very smart and have a lot of money ID/unique national ID. It gives people power. They will continue to disrupt one more reason to get a voter ID card and block change unless they see a and meets the KYC requirement. A clear signal from regulators and system based on usage limits and government. The ones with most to pattern recognition and one standard lose are large companies such as document is much better. It may also help prevent terrorist Visa, MasterCard, and Western Union. Paradoxically these activity as suspicious patterns will be monitored and are the companies that could be major players in the new reported. world. Historically, whenever there is a major inflexion point the large incumbents get disrupted. The resistance from the Telecom and Financial Services informal sector in blocking change cannot also be under estimated. Money lenders, criminals, extremists, terrorists One comment we have heard is that telecom and financial and many others will not want change. services are very different like apples and oranges and, therefore, lessons from telecom cannot be applied. A lot of Conclusion and Recommendations what telecom does is similar but the key difference is in scalable risk management because of the value exchanged 1. Make UFA by 2013 a national priority and set up an (much more than telecom) and in the fungibility of money empowered National Mission for Financial Inclusion (much more than talk time). (NaMFI) as suggested in the Rangarajan Committee. Most telecom players do not understand the capital and risk 2. NaMFI should auction “Inclusive Growth” licenses for management requirements for a system that can move circles similar to telecom where targets for real $1600 trillion every year (Boston Consulting Group 2000 inclusion are committed to and there are severe Study). Banks do not understand how to leverage mobiles penalties for not meeting targets. NaMFI should be a and create distribution as telecom does. Banks and telecom single window and commit to fast tracking approvals operators need to work together to build a solution that that may be required by winning bidders. 29
  8. 8. c k CAB CALLING | April - June, 2009 8. Large not-for- profit BCs should be encouraged with minimum c a p i t a l requirements and all micro management restrictions s u c h a s distance and type of agents that BCs can use should be abolished 9. RBI should actively encourage banks to seek innovative solutions 3. NaMFI should also invite bids for the “Reputation that are prudent and pragmatic and not be constrained Bureau” and the Global Payment Switch and also see by the guideline it may issue from time to time. There how it can get a common infrastructure built that should be a single window at the RBI with very quick lowers the AML and CFT compliance load on banks. turnaround for banks to use. 4. The PRAN number under NPS should become the 10. Banks must report usage, inactive accounts and loss new unique national ID and a logistics plan should be data to the RBI and the RBI should report it to the public devised such that every legal resident in India and in a manner which enables the public to judge how every Indian citizen have a unique in PRAN and no much work still needs to be done. It should not report in individual has two PRAN’s. This should be complete in a manner where government, regulators, banks and 90-180 days. This could be combined with a clean up other players can feel good about achieving cosmetic of the electoral rolls such that all citizens over 18 have targets. a voter ID. Alternatively the unique national ID could be the voter ID for all citizens who are over 18. 11. RBI should make it amply clear that it supports innovation, cross subsidies and branchless banking 5. To open NPS accounts / inclusive growth accounts by creating a level paying field and being very (IGA) the only requirement should be the unique proactive. It should allow controlled risk taking national ID. No other document is required. Initially recognizing that some experiments may fail and end- usage limits will be adequate but low. People who have customers may have to be compensated. The regular bank accounts can link their regular accounts potential loss that may be incurred has to be balanced to get higher usage limits with the cost of going too slow. 6. Every legal resident should have an IGA with banks To us, UFA by 2013 is an imperative which must be achieved. that pay upto 5 per cent tax free interest on daily Given the enormity of the task, the numerous stake holders, balances. These accounts could be linked to the NPS and the attitudinal change it requires, the chances of account. Banks need not keep regulatory reserves on success will be greater if it is elevated to the status of a these deposits but must use them for priority sector national priority and tackled on a war footing. After Mahatma lending only. Gandhi, the tradition of rallying people to support an inspiring goal has withered away to be replaced by cynicism. We 7. A law should be passed for all employers whose fervently hope that the government and the Reserve Bank employees are not under EPFO or a similar pension provide inspirational leadership that a task like UFA by 2013 scheme to pay 10 per cent of annual wages or Rs. requires. 5000 whichever is lower into the NPS account of their employee. 30

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