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India Opens 15M Bank Accounts in Modi’s Inclusion Drive

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Re: India Opens 15M Bank Accounts in Modi’s Inclusion Drive

#11

Post by nb1981 »

throwawayHN123 wrote: post #3
arahant wrote: post #2

Not quite sure how this will end poverty. If anything, it will bring 15M people into the banks' debt and interest clasp.

This is for poor and labor class people. Currently these people earn hand to mouth and spend daily as per their need. Husbands spend on drinking and there is no money left for medicines or child care. If they get bank accounts 1)They will start saving. 2)They will understand the benefits of saving and be the owners of their own money. 3)Any govt schemes or benefits will directly reach them which currently is going in…

..and people call me a dreamer.

1. They will start saving: No. They won't. They will have what little money they have put into a system outside of their control and systematically syphoned away. 2. The benefits of saving are not something people need to learn; the benefits of saving money are harder to justify to someone who isn't already wholly dependant on it (and maybe even perceives it as a tool used against his people for centuries). 3. True, but I fail to see a major difference between a government and corrupt middle men. Most government people run businesses, is that the same in India? Conflict of interest? 4. The 2000's called...give it a couple years and whatever legislation you think protects the poor will be watered down, eroded away, or completely worked around.

The textbook justifications for predatory capitalism don't work anymore. I'm sorry, but the more involved the poor are in finance, the more they are preyed upon; because there is opportunity and reward. Taking candy from a baby.

"Positive-spillover". FFS.

Re: India Opens 15M Bank Accounts in Modi’s Inclusion Drive

#12

Post by ss45349 »

Finally mobile payments, Airtel money and the likes, that require phone number to be attached to a bank account would start to work for more and more of the poor. In a country where banking infrastructure, especially for transfers, isnt that great and mobile penetration is really high, such an initiative would prove to be a great boon for direct transfers and even possibly overeas charitable remittances in which money could be transferred straight to the needy, creating full transparency!

Re: India Opens 15M Bank Accounts in Modi’s Inclusion Drive

#13

Post by eklavya »

nb1981 wrote: post #11
throwawayHN123 wrote: post #3

Earlier quoted context omitted.

This is for poor and labor class people. Currently these people earn hand to mouth and spend daily as per their need. Husbands spend on drinking and there is no money left for medicines or child care. If they get bank accounts 1)They will start saving. 2)They will understand the benefits of saving and be the owners of their own money. 3)Any govt schemes or benefits will directly reach them which currently is going in…

..and people call me a dreamer. 1. They will start saving: No. They won't. They will have what little money they have put into a system outside of their control and systematically syphoned away. 2. The benefits of saving are not something people need to learn; the benefits of saving money are harder to justify to someone who isn't already wholly dependant on it (and maybe even perceives it as a tool used against his…

So you are saying the government is going through all these troubles to hand over subsidies and benefits to the poor only to "syphon" it away?

You are forgetting people are being saved from the clutches of money lenders which have enslaved these people for a long time now. Now the poor have the opportunity to get a loan from the bank and a real insurance cover. This change can not be trivialized.

Re: India Opens 15M Bank Accounts in Modi’s Inclusion Drive

#14

Post by hrjet »

eklavya wrote: post #13
nb1981 wrote: post #11

Earlier quoted context omitted.

..and people call me a dreamer. 1. They will start saving: No. They won't. They will have what little money they have put into a system outside of their control and systematically syphoned away. 2. The benefits of saving are not something people need to learn; the benefits of saving money are harder to justify to someone who isn't already wholly dependant on it (and maybe even perceives it as a tool used against his…

So you are saying the government is going through all these troubles to hand over subsidies and benefits to the poor only to "syphon" it away? You are forgetting people are being saved from the clutches of money lenders which have enslaved these people for a long time now. Now the poor have the opportunity to get a loan from the bank and a real insurance cover. This change can not be trivialized.

+1 for moving away from the clutches of money lenders.

Though, the situation isn't that simple. Money lenders often accept undeclared assets as collateral. So for some people (the uneducated or the unscrupulous) money lenders are a boon, not a clutch.

Re: India Opens 15M Bank Accounts in Modi’s Inclusion Drive

#16

Post by lifeeth_ »

ss45349 wrote: post #12

Finally mobile payments, Airtel money and the likes, that require phone number to be attached to a bank account would start to work for more and more of the poor. In a country where banking infrastructure, especially for transfers, isnt that great and mobile penetration is really high, such an initiative would prove to be a great boon for direct transfers and even possibly overeas charitable remittances in which mone…

FWIW - India has one of the best money transfer infrastructures [IMPS/NEFT/RTGS]. IMPS is my favourite - it taps into the ATM machine backbone and enables 24x7 instant payments at almost zero cost [ http://en.wikipedia.org/wiki/Immediate_Payment_Service ]. The problem is more than the lack of infrastructure - Most folks are a bit apprehensive about using Cards or Online banking capabilities for fear of theft.

Re: India Opens 15M Bank Accounts in Modi’s Inclusion Drive

#17

Post by nmridul »

nb1981 wrote: post #11
throwawayHN123 wrote: post #3

Earlier quoted context omitted.

This is for poor and labor class people. Currently these people earn hand to mouth and spend daily as per their need. Husbands spend on drinking and there is no money left for medicines or child care. If they get bank accounts 1)They will start saving. 2)They will understand the benefits of saving and be the owners of their own money. 3)Any govt schemes or benefits will directly reach them which currently is going in…

..and people call me a dreamer. 1. They will start saving: No. They won't. They will have what little money they have put into a system outside of their control and systematically syphoned away. 2. The benefits of saving are not something people need to learn; the benefits of saving money are harder to justify to someone who isn't already wholly dependant on it (and maybe even perceives it as a tool used against his…

You should understand that most of the banks that opened these accounts are Public sector banks (or Government Banks). And most of these accounts have no minimum balance requirements and not many surprise charges. And deposits in Government banks are guaranteed (insured upto a certain amount). So there is no question of the money getting siphoned off.

Re: India Opens 15M Bank Accounts in Modi’s Inclusion Drive

#18

Post by webbrahmin »

quickdraw46 wrote: post #10
webbrahmin wrote: post #8

Earlier quoted context omitted.

Not quite true. I connected to my village and and spend around two months there every year. 1. The Zamaindari (Zamin = Land ZaminDar = Big Land Owner ZaminDari = A system of exploitation set-up by British now dismantled.) system is over. Period. There are some big land wonders left but I am not going into it. 2. Poor borrow from money lenders who may or may not be big land owners. But in almost all the cases these mo…

Ah yes my bad, I mislabeled the money lender people as zamindars. Thats just the old school name. I do agree with most of what you have to say, and guess its a good thing with all the bank accounts opening. It should somewhat curb the absolute chaos the rural India economy is in. The thing you talk about are also knows as BC (or the link) and its quite common even in metros. There is also a variation of it run by jew…

My village is in Muzaffarpur district of Bihar. We grow leeche nuts and mangoes :)

Re: India Opens 15M Bank Accounts in Modi’s Inclusion Drive

#19

Post by jagira »

webbrahmin wrote: post #8
quickdraw46 wrote: post #6

Earlier quoted context omitted.

Err, thats a very old school thought. Its more that these people don't believe in banks or the banking system. In-fact most of rural India still has people taking loans from 'zamindars' who end up charging insane interest rates and forcefully taking away property/farms from the poor farmers.

Not quite true. I connected to my village and and spend around two months there every year. 1. The Zamaindari (Zamin = Land ZaminDar = Big Land Owner ZaminDari = A system of exploitation set-up by British now dismantled.) system is over. Period. There are some big land wonders left but I am not going into it. 2. Poor borrow from money lenders who may or may not be big land owners. But in almost all the cases these mo…

kind of like payday loans?

Re: India Opens 15M Bank Accounts in Modi’s Inclusion Drive

#20

Post by kramarao »

nb1981 wrote: post #11
throwawayHN123 wrote: post #3

Earlier quoted context omitted.

This is for poor and labor class people. Currently these people earn hand to mouth and spend daily as per their need. Husbands spend on drinking and there is no money left for medicines or child care. If they get bank accounts 1)They will start saving. 2)They will understand the benefits of saving and be the owners of their own money. 3)Any govt schemes or benefits will directly reach them which currently is going in…

..and people call me a dreamer. 1. They will start saving: No. They won't. They will have what little money they have put into a system outside of their control and systematically syphoned away. 2. The benefits of saving are not something people need to learn; the benefits of saving money are harder to justify to someone who isn't already wholly dependant on it (and maybe even perceives it as a tool used against his…

I grew up in rural India, where banks were non-existent. People kept the money locked up in houses or worse yet, lent to the local money lender, who may or may not pay on demand. The government in those days introduced postal savings plan, which helped people greatly. That was my introduction to banking as well. Here are some observations:

1. Banks were inaccessible to poor people. Too much paper work. Too far away. Too difficult to conduct business. I hope with new bank accounts all these are changing too.

2. Saving is not new. People save money; even poor people do save. But, then, if the savings are in women's hands, it is spent more wisely. Historically, the only way women could store the money was in gold. Eventually, gold itself because such a coveted possession, it's monetary value was not exploited for capital needs. Bank accounts may not have these problems.

3. Historically, the only reason rural folks went to bank is to take loans, under some government project. And, that had a big potential for corruption. People had to pay money to take the loans. The funny thing was the underlying assumption is that the borrowers need not pay money back, since the government will write it off, for some election purposes.

4. Money transfers for poor is new. I think that would work lot better. And, perhaps giving to women would make it work whole lot better. In my observation, there is lot of social and cultural conditioning in seeing the kids doing better than the parents, the mothers will try to put the money to use. Whether they have the financial education or not, different issue.

5. Any system will be exploited over time. I think it is important to shake them up every few years to disturb the existing power structures, especially in the relationship between the government and the people.

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