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

28 Pages Posted: 26 May 2021

See all articles by Yan Carriere-Swallow

Yan Carriere-Swallow

International Monetary Fund (IMF)

Vikram Haksar

International Monetary Fund (IMF)

Manasa Patnam

International Monetary Fund (IMF)

Date Written: February 1, 2021

Abstract

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.

JEL Classification: G21, G28, O16, E42, H83

Suggested Citation

Carriere-Swallow, Yan and Haksar, Vikram and Patnam, Manasa, India's Approach to Open Banking: Some Implications for Financial Inclusion (February 1, 2021). IMF Working Paper No. 2021/052, Available at SSRN: https://ssrn.com/abstract=3852781

Yan Carriere-Swallow (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Vikram Haksar

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Manasa Patnam

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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