In a chat at ET Global Business Summit, Jayant Sinha, MoS, Finance, Rana Kapoor, MD & CEO, YES Bank , Kunal Shah, Founder and CEO, FreeCharge, Vishwavir Ahuja, Bank of America & Ajay Kanwal, Head, ASEAN, StanChart discuss with Janmejaya Sinha, Chairman, BCG Asia Pacific, the financial services offered by the Modi government and their ramificationsIf you think about what we are trying to accomplish, it starts with a vision and the vision is that we are able to create opportunities for every single Indian. We want to empower Indians. This is a pro-poor government. When we say 'Banking A Billion,' we want to make sure that we can reach financial services to every single individual in India. So it starts with the vision. But subsequently, we have realised that it has to move through three very important phases, one phase is fully complete now. There is a second phase that we are working through and a third phase that is still to come.The first phase that is done is about inclusion and when Prime Minister Modi declared from the ramparts of Red Fort that within a 100 days we would achieve 100 per cent financial inclusion and ensure that every single Indian household had access to a bank account. Before January 26, which was the deadline that he had given us, we had accomplished that. So this was accomplished in a 100 days.The second phase that we started thereafter is to create an array of products. First, we started with the notion of a RuPay debit card and associated with it was the Rs 5000 overdraft if you established a good credit history. A Rs 30,000 accident insurance goes along with that. So we try to take this Jan Dhan Account and add certain features to it that make it very attractive so that people have an incentive to sign up. While we got the basic savings product and credit product done, we moved to the insurance side and in insurance I was with the Chairman of Life Insurance Corporation yesterday in Bombay. It is only an organisation like LIC that can do what we did next which is to have an accident insurance for Rs 12 a year, and then for Rs 330 ($5), we provide Rs 2 lakh worth of term life cover as well. Another very very popular product that has spread like wildfire and we have crores of people signing up for this is life insurance associated with that was Atal Pension Yojana where the government matches a pension contribution that people can make in the unorganised sector to create a pension for themselves. So we have added a pension product onto this platform. We are working on additional products as well in health insurance and of course a very important product that we have also launched is Mudra where without any documentation, collateral or any personal guarantees, people have access to micro loans to set up their thelas (carts), to set up their dukaan (shop), to set up their salon. We are creating the suite of very simple products that you sign in with one simple form. We are moving towards a mobile platform for that and it will be available in phase two. Moving to the third phase, we move from JAM aspect to a more bread and butter aspect. We found some glitches and we have to make sure that it is easy for people to get to these products and today we do not have enough ATMs in India. Rana (Rana Kapoor of Yes Bank) will tell me what are the exact right numbers but I think there are about 350,000-400,000 ATMs in India right now.So we do not have enough ATMs. People go to their business correspondence and other channels to be able for cash in, cash out and other services. So in the third phase we are working on to ensure that we get an ATM in every post office, an ATM in every railway station and through the payment banks. Kunal (Kunal Shah, Founder & CEO, FreeCharge) will tell us about all of that but through the payment banks we want to be able to do micro ATM cash in-cash out at every kirane ki dukaan (grocery stoor) every paanwala, every little store and every little village. The access has to be pervasive so that people can get access to the set of simple products that we have delivered. At the end of the day when is this is put together, the new financial architecture for India will come into existence. Not only will it be a game changer globally because I do not think anybody has pulled off something at this scale and this scope but much more importantly for the billions that we spoke about we will also be able to provide financial security and the ladder to better lives.I am super challenged. I think I speak for the Reserve Bank of India. I think they are playing a fantastic enabling role. The payments banks and the small banks are very good experiments, very good pilots which are being launched in the system. But before they become super successful, there are many other things that let us take stock of what has happened after the schemes were launched. The JAM scheme is an outstanding success. I was very sceptical. But 20.38 crore accounts have opened. Thirty thousand crores of balances have accreted to these accounts.They started sluggishly. I am talking about September 2014 to January 2016. So I did a little bit of home work this morning for breakfast and I promise you that 30,000 crores means incremental inclusive savings in our economyHowever, 20.38 crore accounts of the unbanked is not enough. This is where I have a little disagreement with the honourable minister. I could be wrong statistically, but at least another 21 crore accounts still need to be banked. But 50 per cent achievement in my judgement is a great achievement and Rs 87,000 crore has been disbursed already. That is a great accomplishment. It is like outstanding because it is creating inclusion in tiny businesses.The unified product interface which has been created indigenously at a very frugal level with a frugal technology by none other than NPCI, is also great. We have almost 17 crore RuPay cards. You do not have to pay Master and Visa for their astronomical costs. I think this is an outstanding development under the leadership of our prime minister. The Bharat Bill Payment System is the ultimate financial architecture which will include household payments, mobile payments, electricity payments, seasonal payments, monthly payments in a very frugal manner. These are outstanding schemes and there's going to be a tectonic shift in the payments architectures of our country.This is not a boxing match?A few observations. First, there is a chief technology officer in every house and that person is of the age 14 to 21. He is the one who is driving the entire household towards technology. Slowly the chief technology officer is also becoming the chief procurement officer because he understands technology. We are actually selling to this age group people. Then, there is the chief wage earner. So that is one thing that is missing in a lot of the scripts that we are currently having from the traditional finance companies. Second point, is there an incentive to not make payments through cash? We talk about banking. I think anybody would see the value of banking when they can actually use some of these things. And you challenged the point about ATMs. I think we have to move and leapfrog away from that. There is no way we will be able to deploy enough ATMs, which is going to be viable for banks. We really need to move. Imagine, there are at least 100 million smartphone users in this country who are actively using internet but are withdrawing cash from the ATM and recharging at the shop next to it. That cannot make sense. The same generation that is using Snapchat and Instagram to send instant pictures are going to ATM to withdraw money and recharge phones. That has to be obviously a disincentive in terms of usage. Also charging extra for digital transaction is not going to help. Fuel, bill payments, payment of insurance premiums etc through digital transactions should be incentivised. Also once one goes for digital transactions for utilities, they do not go back to physical queues. We need to incentivise the trials.First of all, I see no particular challenge between the government and the RBI’s push and thrust towards banking services to the lower income segments or so.No, no the question is not that the challenge is RBI giving you guys an easier deal because they are not allowing FinTech to challenge you. Are they protecting the incumbent banks from FinTech?No, no. We are actually very much in alignment with the onset of the payment banks and FinTech and we see the world changing. Let us not talk about banks in the traditional sense and FinTech companies separately and payment banks separately. I think it is part of the new ecosystem that is getting created where we see our future role getting slightly redefined to provide banking and payments as a service now. And that is the way we look at it and we are aligning our own organisation in that manner. And talking about financial inclusion, for the last four-five years, the entire orientation of the banks has been towards financial inclusion. Our strategy from a point of differentiation has focused on this aspect and a significant proportion of our balance sheet from a credit point of view and in fact our income comes from this space. So I am all for it. And if I am may make just three points, the critical mass of customers through the JAM phenomenon got created and we are well poised now to take the next leap in this space. Three things will matter most; accessibility, that is being created through multiparty channel strategy, cash in cash out through the BC networks, through other sort of mechanisms coming into play. So that is one aspect and I think that access is one aspect. The second is creating the transaction flows. There again, I think, the very fact that all of this is happening, the more and more transaction flows will happen as more and more people come into the system. And of course technology has to do a lot of it. So the whole idea is to create ease and convenience of banking. And one of the methods is to actually reduce the cost of doing transactions. There we need mass adoption of technology at the front-end at the backend and I think the cooperation with the government is essential in terms of a public private partnership structure where the payment banks coming on will help in creating the financial infrastructure that we need ultimately to bring the cost of intermediation down. And all of that is ultimately good because it is going to add to the customer base and at the end of the day, there are several products that we will be able to offer. You look at this as a service that we banks can provide going forward.So let me correct what we really do. We would like to make a lot more people billionaires and then bank them. So yes, we really want to help more billionaires be created. But let us take a step back, I mean if you could have titled this session as empowering the billion it would have been better because truly that is what we are doing, we are really making sure that a large proportion of our population is actually coming into the mainstream...