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

IMF Working Papers, February 26, 2021

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Examines development of the digital infrastructure known as the “India Stack,” including an interoperable payments system, a universal digital ID, and other features.
Argues the Stack’s key overarching feature is a foundational approach of providing extensive public infrastructures and standards that generates important synergies across the layers of the Stack.
Context: until recently, a large share of India’s population lacked access to formal banking services and was largely reliant on cash for financial transactions.

Expansion of mobile-based financial services provides a novel alternative for expanding the financial net by enabling simple and convenient ways to save and conduct financial transactions.
The Stack’s improved digital infrastructures have already allowed for a rapid increase in the use of digital payments.
Entry of a range of competitors, including fintech and bigtech firms, has been facilitated by the Stack.

Subject: Financial services, Fintech, Fiscal accounting and reporting, Mobile banking, Payment systems
Keywords: consumer spending, Credit information companies, data sharing, digital payments, digitalization, financial inclusion., open banking, payments bank, payments landscape, telecom data, transaction costs, WP

IMF Working Paper No. 2021/052 by Yan Carriere-Swallow, V. Haksar, and Manasa Patnam (February 26, 2021).