NEW DELHI (Reuters) - Treasury Secretary Timothy Geithner on Tuesday said India needs little help in developing some financial innovations, especially when it comes to extending banking services to more people.
At a visit to a storefront mobile banking site affiliated with Eko, a nonprofit organization, and the State Bank of India, Geithner said he wanted to show how India was coming up with creative solutions to its development problems.
“We wanted to highlight the extent of change and innovation in India,” he said after speaking with mobile banking providers and customers in the Samkalka area on Delhi’s outskirts.
“I don’t think India needs any help in this area, but it’s good to see,” he added.
The dusty village has no formal bank branch, but some of its shop keepers and stall owners act as “human ATMs” for the Eko project, taking deposits and providing withdrawals and making electronic payments for customers. The transactions are recorded using mobile phones and a special encryption pad.
Geithner is in Delhi to launch economic and financial partnership talks between the United States and India in an effort to elevate the countries’ bilateral relationship. He is expected to hold a joint news conference with Indian Finance Minister Pranab Mukherjee at around 1:30 p.m.
The Eko project was launched in February 2009 and currently has about 350 outlets across Delhi, serving 42,000 customers with daily transactions of more than 1 million rupees
The project aims to try to take advantage of a deep penetration of mobile phone usage in India. According to Indian central bank data as of a year ago, India had 403 million mobile phone users, but 187 million people without bank accounts.
The United States also has a significant population without a bank account, around 17 million, according to the Federal Deposit Insurance Corp. Many of these people were victimized by predatory practices of unregulated financial firms such as payday lending shops in the years running up to the financial crisis of 2008-2009.
Treasury officials had said last week that they hoped to learn some things from India’s efforts to extend financial services to its poor and rural populations.
Reporting by David Lawder; Editing by Ranjit Gangadharan
Our Standards: The Thomson Reuters Trust Principles.