Addressing the ET Financial Inclusion Summit, Reserve Bank of India Governor Shaktikanta Das rightly pointed to greater pressure for financial access to the unbanked as a priority. This should mean not only that everyone has a bank account, but also the ability to manage it and have access to credit, savings and insurance. A consensus emerged at the summit that digital is the way to go.

But that means not only stable and reliable technology platforms in banks, but also stable power supply and telecommunications connectivity across the country, as well as robust cybersecurity. But platitudes aside, the goal of making banking easy and free for the poor is not being achieved by making automated teller machine (ATM) transactions expensive.

Banks save money when customers use ATMs instead of going to bank branches to withdraw money or check their balances. Discouraging the use of ATMs increases costs for banks, including eroding the infrastructure cost sharing achieved by customers of any bank that can use the same ATM. Fortunately, there’s nothing stopping a customer from opening a payment bank account with a telephone company, transferring funds to her payment bank account, and withdrawing money whenever she wants.

Wider adoption of digital payments has led to an increase in the number of prepaid payment instruments at a compound annual growth rate of 53%, from 41 crore in May 2017 to 226 crore in May 2021. Already, India is ahead of Hong Kong and Singapore with its Unified Payment Interface (UPI) and NACH credit for bulk transfers that allow funds to be transferred at any time of the day from one bank account to another linked bank account a phone number and Aadhaar, reducing the use of cash, simplifying merchant payments and reducing costs.

The governor did well to focus on financial literacy. Political agency and empowerment are also essential for the intended beneficiaries of direct benefit transfers to have full and unconditional access to their funds. Financial inclusion, ultimately, is an integral part of inclusive democratic politics that leaves no one behind