In India, a new banking system to reach masses

Uttar Pradesh

AT A furniture store outside India's capital, a salesman scans the manager's ID and takes her fingerprint on a biometric device attached to his cellphone.

Within minutes, Meenakshi Sharma becomes eligible for an account with Paytm, joining the hundreds of thousands who have signed up to a payments banking system that is revolutionising India's retail sector.

Before the government's shock decision in November to withdraw high-value bank notes from circulation, around 90 per cent of everyday transactions in India were in cash.

The sudden cash shortage forced millions to join the formal banking sector for the first time, helping Prime Minister Narendra Modi meet a long-term goal.

A country of 1.25 billion people, India has only about 132,000 bank branches and 218,000 ATMs - just a fraction of which are in rural a…