Jan Dhan, Aadhar, and banking the unbanked, Modi speaks on India's Fintech success at Singapore

Last Updated: Wed, Nov 14, 2018 15:19 hrs
Narendra Modi (Image Courtesy: Twitter)

Prime Minister Narendra Modi delivered the keynote address at Singapore's Fintech Festival. This is the third iteration of the festival that has been reckoned among its participants as a festival of Fintech companies. Fintechs for the uninitiated are companies that offer technological solutions to Financial products.

Examples of Fintech could be startups engaged in lending, borrowing, Big Data/Analytics, Insurance, Personal finance management, Prepaid cards, Investing platforms etc.

PM Modi in his two day visit to the Lion City has been referred to as the first Global leader to deliver a keynote address at the Singapore Fintech Festival. Alongside T Shanmugaratnam, Singapore's Deputy Prime Minister, he called the Fintech festival as a "financial revolution". "Singapore has been a global hub for finance and, it is now taking a leap into the digital future of finance," said Modi.

He also added that India’s RuPay card was launched in June here and so was the first international remittance mobile app using "India's world class Unified Payment Interface or UPI". The Prime Minister also launched APIX (Application Programming Interface Exchange), a tech-platform to deliver banking and financial services to two billion people worldwide.

Modi's thirty minute long keynote touched upon a wide-range- blockchain, technology, startups, banking, venture capital etc.

On Venture Capital, he said, "To increase your Venture Capital or VC funding by 10 percent, tell the investors you run a 'platform', not a regular business... If you want to increase your VC funding by 20 percent, tell the investors that you are operating in the "fintech space...But, if you really want the investors to empty their pockets, tell them that you are using 'blockchain'."

Modi credited technology for bringing unbanked to mainstream banking. Comparing the banking population from 2014 he said, "Less than 50 percent of Indians had bank accounts in 2014; now, it is nearly universal."

"With the power of fintech and the reach of digital connectivity, we have started a revolution of unprecedented speed and scale... To begin with financial inclusion has become a reality for 1.3 billion Indians. We have generated more than 1.2 billion biometric identities – called Aadhaar or foundation - in just a few years."

"With our Jan DhanYojana, we aimed to give a bank account to every Indian. In three years, we have opened 330 million new bank accounts.These are 330 million sources of identity, dignity and opportunities."

Also Read: Jan Dhan accounts used to launder Rs 42187 crores: P Chidambaram

Modi also referred to India's public infrastructure as the biggest in the world. Although ownership of smartphones and cellphones remained a private ownership, he said, "So today, more than a billion biometric identities, more than a billion bank accounts and more than a billion cell phones give India by far the biggest public infrastructure in the world."

"More than Rupees 3.6 lakh crore, or 50 billion dollars of benefits from government have reached the people directly."

"No longer can fake and duplicate accounts bleed government finances. We have saved over Rupees 80,000 crore, or 12 billion dollars in prevented leakages."

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Modi also said that students can get their scholarship's directly into accounts. "No longer will she be lost in end-less paper chase."

Also, "Banking has come to doorsteps even in remote villages through 400,000 micro ATMs based on Aadhaar."

"And now, this digital infrastructure has helped launch the world's largest healthcare scheme this year. 'Ayushman' will provide affordable health insurance to 500 million Indians."

"It has also helped us extend 145 million loans for small entrepreneurs through Mudra scheme. In four years, they amount to Rupees 6.5 lakh crore, or 90 billion dollars. Nearly 75 percent of these loans have gone to women."

"Just a few weeks ago, we launched the India Post Payments Bank. Over 150 thousand post offices across India and 300,000 postal service employees are using technology to provide house to house banking."

"More than 120,000 village councils in India have already been connected by nearly 300,000 kilometres of fibre optic cables."

"Over 300,000 Common Service Centres have brought digital access to villages. They give our farmers better access to land records, credit, insurance, market and the best price. They deliver health services and hygiene products to women."

"None of this would have been as effective without the other big change brought about by fintech – the digitisation of payments and transactions in India."

"India is a nation of diverse circumstances and challenges.Our solutions must also be diverse.Our digitization is a success because our payment products cater to everyone."

"For those with mobile and internet, the BHIM-UPI is the world’s most sophisticated, simpleand seamless platform for payments between accounts, using a virtual payment address."

"For those who have a mobile, but no internet, there is U.S.S.D. system in 12 languages."

"And, for those who have neither mobile nor internet, there is Aadhar Enabled Payment System, which uses biometrics. And, it has already registered a billion transactions and grown six-fold in two years."

"RuPay is bringing payment cards within the reach of all.Over 250 million of these are with those who did not have a bank account 4 years ago."

"From cards to QRs and wallets, digital transactions in India are growing rapidly. Today, 128 banks in India are connected to UPI."

"Transactions on UPI grew 1500 times in the last 24 months. Every month, the value of transaction is growing by over 30 percent."

"Every digital payment saves time. It adds to a huge national saving. It is increasing productivity of individuals and our economy."

"It also helps improve tax collection and inject fairness in the economy."

"Even more, digital payments are a gateway to a world of possibilities."

"Data Analytics and Artificial Intelligence are helping us build a whole range of value added services for people.This includes credit to those with little or no credit history."

"Financial inclusion also extends to micro, small and medium enterprises."

"They are all coming on the nation-wide Goods and Services Tax digital network, launched just over a year ago."

"Banks are reaching out to them with credit. Alternative lending platforms are offering innovative financing models. They no longer have to look at informal markets for credit at high interest rates."

"And, just this month, we committed to approve loans up to Rupees 1 crore, or one 150,000 dollars for Micro, Small and Medium Enterprises within 59 minutes - without even visiting a bank. This is driven by an algorithm that uses GST returns, Income Tax returns and bank statements to make credit decisions. In just a few days, 150,000 such enterprises have come on board for loans."

"Digital technology is introducing transparency and eliminating corruption through innovations such as the Government e-Marketor GEM. It is an integrated platform for purchases by government agencies."

"It provides everything – search and comparison, tender, online ordering, contract generation and payment."

"It already has 600,000 products.Nearly 30,000 buyer organisations and more than 150,000 sellers and service providers are registered on the platform."

India is the best destination

"The future of fintech and Industry 4.0 is emerging in India. Our youth are developing apps that are making the dream of paperless, cashless, presence-less, and yet safe and secure, transactions possible for all. That is the wonder of India Stack– simply the largest set of Application Programming Interface in the world."

"It also helps that India has the largest data consumption in the world and the cheapest rates for data.And one of the top nations in fintech adoption. So, I say this to all the fintech companies and startups – India is your best destination."

"The economies of scale achieved in India by the LED bulb industry allowed this energy efficient technology to become more affordable globally. Likewise, India’s vast market can enable fintech products to achieve scale, reduce risks and costs, and go global."

"In short, the Indian story shows six great benefits of fintech: Access ,inclusion; connectivity; ease of living; opportunity; and, accountability."

"Across the world, from the Indo-Pacific to Africa to Latin America, we see inspiring stories of extraordinary innovation changing ordinary lives."

"We see inspiring stories of extraordinary innovation changing ordinary lives. But, there is much to be done. Our focus should be on development for all through development of the marginalised," he said.

This is the third edition of the Singapore Fintech Festival (SFF), which was launched in the year 2016. Eighteen Indian fintech firms are participating in the festival, while FICCI (Federation of Indian Chambers of Commerce & Industry) and Monetary Authority of Singapore are the principal aggregators. The India Pavilion will have the highest number of companies among the 16 countries at the event.

Watch PM Modi's speech here:

PM Modi also met Vice-President of the United States Michael Pence, Prime Minister of Singapore Lee Hsien Loong, and the Prime Minister of Australia, Scott Morrison.

* Quotes made by Prime Minister Modi have been sourced from Press Information Bureau.