India has surpassed China in financial inclusion metrics as India launched schemes like Pradhan Mantri Jan-Dhan Yojana combined with improved digital infrastructure, usage of banking correspondent, a report authored by Soumya Kanti Ghosh, Group Chief Economic Advisor, State Bank of India stated.
Key Highlights Of The Report-
The number of bank branches in the country per 100,000 adults saw a rise to 14.7 in 2020 from 13.6 in 2015, above Germany, China, and South Africa, published by Mint quoting SBI report.
The number of ‘Banking Outlets in rural area BCs’ jumped from 34,174 in Mar’ 10 to 12.4 lakh in Dec’20.
A statistically significant and economically meaningful drop has been observed in consumption of intoxicants such as alcohol and tobacco products in states where more PMJDY accounts were opened, the report stated.
The estimates show that nearly Rs1.0-1.5 lakh capital expenditure is needed to set up Kiosk under the Bank led BC model.On the other hand, states with higher Pradhan Mantri Jan-Dhan Yojana accounts saw a perceptible drop in crime.
The report is authored by Soumya Kanti Ghosh, SBI’s group chief economic adviser. He states that financial inclusion policies have a manifold effect on economic growth, lowering poverty and income inequality, and promoting financial stability.
“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,” the report said.
The report brought into notice that the Banking Correspondent (BC) model in India has been able to define a range of banking services at low cost and therefore play an instrumental role 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,” the report said.