financial loss, personal privacy and a clear overview of spending are crucial features that households expect from payment instruments. cash scores favourably in all of these areas, according to our surveys. my interpretation of these results : german households value independence – and physical cash offers three unique forms of independence, which distinguishes it from digital payment systems. first, independence from one ’ s socio - economic background. • cash is tactile and does not require any technical equipment. the use of cash is easily understood across the generational divide. it is this haptic nature of cash, which, in my view, is an important element of strengthening financial inclusion. • ensuring access to cash may be particularly relevant in rural areas with insufficient banking or technological infrastructures. cash is, in that sense, also a means of safeguarding social cohesion. second, independence from technological ecosystems. • given the still fragmented payments landscape in europe, cash currently remains the one truly universal means of payment when it comes to p2p transactions in the euro area. • fintech companies are shaking up the traditional banking system in europe. these companies can often leverage their global reach and huge customer base. this may bring benefits for consumers, for instance regarding cross - border payments. but it also means that customers are becoming locked into particular payment ecosystems. cash offers an easy way out, at least for certain transactions. third, independence from social control and data collection. • as legal tender, cash is fully backed by the domestic central bank. • cash is the obvious choice of payment method when it comes to personal privacy. this strengthens individual freedom. at the end of the day, digital payment systems work by using personal data. collecting data is not harmful per se. but in the age of big data, collecting detailed data means obtaining valuable information which, in turn, makes it possible to construct patterns of individual behaviour. • from a consumer protection point of view, the question arises as to how much information is necessary to carry out a particular transaction. • from an economic point of view, personal data may be seen as an additional source of transaction costs to be factored in when comparing the underlying cost structures of different payment methods. 3 retailing – the source of future transformations? ladies and gentlemen, payment methods tend to evolve in stages. for example, the adoption of mobile payment solutions is typically preceded by the widespread use of credit and debit cards. this is the case in germany, where contactless payments have just started to catch on.

of the indian financial market keeping in view the present level of penetration of the banking system. many of the mfis have therefor ben conduits of credit flows from the banks whose capacities for last mile reach are constrained under various forms of mfi - bank partnership model. the conceptual framework underlying mfis, however, requires a change, more so in the context of serious challenges the sector faces in post andhra crisis phase. these institutions have to revisit their business models to support the income earning ability of the borrowers and, at the same time, themselves remain economically viable. mfis will have to work hard in pursuit of transparency and responsible finance, shaking off the perception that their motto is profiteering at the cost of the poor but not profitability for sustainable and viable growth. mfis will also have to take initiatives to retool the product redesign for garnering new customers and acquiring more share of the market. at the same time they need to re - engineer the customer responsive processes so as to create a favourable climate for doing business. mfis will have to revisit the mission and business strategy and reinvent the sector to remain relevant in the system. creation of a new category of mfi - nbfc under the framework prescribed by the malegam committee, more nuanced appreciation by the financing banks of the difficulties being faced by some of the mfis despite having responsible and sustainable business model, greater sense of responsibility in the sector as evident from the code of conduct being voluntarily accepted by the mfis and the microfinance legislation which is in the offing, possibly hold key to future success and sustainability of the mfis. business correspondents ( bcs ) due to the constraints involved in going for a full - fledged brick & mortar branch model, the reserve bank, based on the recommendations of the internal group on rural credit and microfinance, adopted the ict based agent bank model through business facilitators ( bfs ) / business correspondents ( bcs ) for ensuring door step delivery of financial products and services. in january 2006, the reserve bank permitted banks to engage bfs and bcs like ngos / mfis set up under the societies / trust acts, section 25 companies, post offices, etc. as intermediaries for providing financial and banking services, thus, addressing the proverbial last mile problem. the approach adopted has been technology and delivery model neutral. initially, the bc retail