Banks

Financial inclusion, at what cost? : Quantification of economic viability of a supply side roll out

We model the double bind problem faced by banks to achieve economies of scale that arise from spreading the fixed infrastructure costs over the number of below poverty line (BPL) customers when there is a dearth of balances in these accounts. We give estimates of the costs public sector banks bear and quantify the amelioration by the tie up of PMJDY accounts with bio-metric Aadhar cards and electronic direct benefit transfer of G2P payments.