In India, a new banking system to reach the masses
By Team Legistify / 2017-03-02

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At a furniture store outside India’s capital, a salesman scans the manager’s ID and takes her fingerprint on a biometric device attached to his cellphone.Within minutes, Meenakshi Sharma becomes eligible for an account with Paytm, joining the hundreds of thousands who have signed up to a payments banking system that is revolutionising India’s retail sector.

Before the government’s shock decision in November to withdraw high-value bank notes from circulation, around 90% of everyday transactions in India were in cash.

The sudden cash shortage forced millions to join the formal banking sector for the first time, helping Prime Minister Narendra Modi meet a long-term goal.

A country of 1.25 billion people, India has only about 132,000 bank branches and 218,000 ATMs -- just a fraction of which are in rural areas.

So in 2015, India’s banking regulator offered licences for what are known as payments banks to stop people putting their money under a mattress.

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