India’s Approach to Open Banking: Some Implications for Financial Inclusion

Author/Editor:

Yan Carriere-Swallow ; Vikram Haksar ; Manasa Patnam

Publication Date:

February 26, 2021

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

We examine how the development of the digital infrastructure known as the “India Stack”—including an interoperable payments system, a universal digital ID, and other features—is delivering on the government’s objective to expand the provision of financial services. While each individual component of the India Stack is important, we argue that its key overarching feature is a foundational approach of providing extensive public infrastructures and standards that generates important synergies across the layers of the Stack. Until recently, a large share of India’s population lacked access to formal banking services and was largely reliant on cash for financial transactions. The expansion of mobile-based financial services that enable simple and convenient ways to save and conduct financial transactions has provided a novel alternative for expanding the financial net. The Stack’s improved digital infrastructures have already allowed for a rapid increase in the use of digital payments and the entry of a range of competitors including fintech and bigtech firms.

Series:

Working Paper No. 2021/052

Frequency:

regular

English

Publication Date:

February 26, 2021

ISBN/ISSN:

9781513570686/1018-5941

Stock No:

WPIEA2021052

Format:

Paper

Pages:

27

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