India now ahead of China in financial inclusion metrics: SBI report
India has made remarkable progress in financial inclusion metrics, even beating China, a report by the State Bank of India (SBI) has said. It also said that the number of bank branches per 100,000 adults in the country has increased from 13.6 in 2015 to 14.7 in 2021, which is higher than countries like Germany.
“India has made remarkable progress in financial inclusion metrics and is now ahead of China!” Soumya Kanti Ghosh, SBI's group chief economic advisor, said in a tweet. He is the lead author of the report.
Meanwhile, the increase in the number of banks has been enabled by financial inclusion schemes such as the Pradhan Mantri Jan-Dhan Yojana and the banking correspondent (BC) model, the report further said, according to multiple agencies.
“India has stolen a march in financial inclusion with the initiation of PMJDY accounts since 2014, enabled by a robust digital infrastructure and also careful recalibration of bank branches and thereby using the BC model judiciously for furthering financial inclusion. Such financial inclusion has also been enabled by use of digital payments as between 2015 and 2020, mobile and internet banking transactions per 1,000 adults have increased to 13,615 in 2019 from 183 in 2015,” Livemint reported citing an excerpt from Ghosh’s report.
Further, research also showed that a perceptible decline in crime has been observed in states that had a higher number of Pradhan Mantri Jan-Dhan Yojana accounts balances, the Livemint report also showed.
The report also showed that the banking correspondent model in India is enabled to provide a defined range of banking services at low cost and hence is instrumental in promoting financial inclusion.
“The new branch authorisation policy of 2017 – which recognises BCs that provide banking services for a minimum of 4-hours per day and for at least 5-days a week as banking outlets has progressively obviated the need to set up brick and mortar branches. For example, the number of ‘Banking Outlets in Villages - BCs’ has risen from 34,174 in Mar’10 to 12.4 lakh in Dec’20. Such progress shows an impressive outreach of banking services through branchless banking,” Ghosh’s report also said.
(With inputs from Livemint)