‘India now ahead of China in financial inclusion metrics’

Need to fine-tune the Business Correspondent model: SBI Research report

India is now ahead of China in financial inclusion metrics, with mobile and Internet banking transactions rising to 13,615 per 1,000 adults in 2020 from 183 in 2015 and the number of bank branches inching up to 14.7 per 1 lakh adults in 2020 from 13.6 in 2015, which is higher than in Germany, China and South Africa, as per a report.

States with higher financial inclusion / more bank accounts have also seen a perceptible decline in crime along with a meaningful drop in consumption of alcohol and tobaccos, according to the report pencilled by Soumya Kanti Ghosh, group chief economic adviser at State Bank of India (SBI), on the fifth anniversary of the note ban. Under the no-frills accounts scheme, the number of persons with deposit accounts at banks has significantly increased, becoming comparable with emerging economy peers and even some of the advanced economies, he said. In the use of digital payments also, there has been noteworthy progress. The number of no-frills bank accounts opened has reached 43.7 crore with ₹1.46 lakh crore in deposits as of October 20, 2021. Of these, almost two-thirds are operational in rural and semi-urban areas and more than 78% of these accounts are with state-owned banks, 18.2% with regional rural banks, and 3% are opened by private sector banks.

Mr. Ghosh called for fine-tuning the banking correspondent (BC) model by making it uniform across all banks for, there is a need to make the BCs interoperable. The number of banking outlets in villages / BCs had risen from 34,174 in March 2010 to 12.4 lakh in December 2020, the report showed.