Banks Have Moved from Wallets to Mobile Phones

The Difference: Congress Enabled it while Modi Mandates it as Excuse for Blunder

More than 23 years ago I wrote a piece for The Hindu, touching on how plastic money was making its way into the wallets of people in India.

Credit cards had just started to gain acceptance in the country then and debit cards were almost non-existent. There were no mobile phones either.

a-bank-in-your-pocket-my-piece-in-the-hindu-november-13-1993-v2

Success of Congress Governments

The successive Congress governments had ensured that both cards and mobile phones were common across the country over time. Their actions also enabled digital transactions but they were NOT mad enough to impose it on those unprepared for that lifestyle.

Diners Club had started issuing credit cards in the 1960s but their target was the higher crust of society.

Some local banks had introduced cards in the 1980s when I was able to get myself a couple. But they did not become pervasive as banks did not go easy with their qualification criteria. By the 90s the cards had made some good inroads into the market.

Drowning in Debt 

With hefty interest rates, cards fetched the biggest profits for banks. The downside was that, with rollover credit, most cardholders were leading a debt-laden life.

Notes Ban Goof-Up

Now, though, while looking for cunning excuses for the indiscretion called demonetisation, Prime Minister Narendra Modi suddenly discovered the mobile and cashless plank to cover it up. He didn’t need any excuse as Indians are so enamoured of him that even if he orders them to do the unthinkable they may abide by it.

So the mobile phone has now become the bank, and it still remains in your pocket. Things don’t change much in India, but the messaging hype does depending on political exigencies.

G Joslin Vethakumar

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Filed under Bid Management in Asia, Demonetisation, Finance

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