ABSTRACT
This chapter discusses the phase where the definition of what was understood as financial inclusion changed to include a range of services, and outreach was introduced as a method to reach out to the inclusive customers. While the Central Bank in general dealt with only institutions, a framework to directly interact with the ultimate beneficiaries that provided a feedback loop was introduced.
The chapter explores the dichotomy between the multiple functions of the RBI – while an economic crisis has to be dealt with, the regulatory function has to be carried forward simultaneously, particularly in an emerging situation where innovation could be driving the market. At the same time the chapter discusses the problems of legacy institutional structures in adapting newer technologies.
It also examines the disruption in the market with technological innovations and the dilemma of how much control a central banker should exercise, particularly in the context of the very vulnerable population.
