September 11, 2023
4 mins read

World Bank Hails India’s Digital Leap in Financial Inclusion

The document further highlighted the groundbreaking measures undertaken by the NDA government and the crucial role of government policy and regulation in shaping the DPI landscape…reports Asian Lite News

Indian Prime Minister Shri Narendra Modi took to social media platform X to share a remarkable achievement on the global stage. The World Bank’s recent G20 document has recognized India’s astounding progress in the field of financial inclusion, revealing that the nation accomplished its financial inclusion targets in just six years, a feat that would have otherwise taken a staggering 47 years to achieve.

The Prime Minister expressed his elation, emphasizing how India’s leap in financial inclusion has been powered by its robust Digital Public Infrastructure (DPI). He commended the country’s digital payment infrastructure and the determination of its people for this momentous achievement. Moreover, he hailed it as a testament to India’s rapid progress and innovation.

The World Bank’s document shed light on the pivotal role of India’s Jan Dhan-Aadhaar-Mobile (JAM) trinity in propelling the financial inclusion rate from a mere 25 percent in 2008 to over 80 percent of adults in just the past six years. This journey was effectively shortened by up to 47 years, thanks to the digital public infrastructure.

The document further highlighted the groundbreaking measures undertaken by the NDA government and the crucial role of government policy and regulation in shaping the DPI landscape.

The document emphasized, “While DPIs’ role in this leapfrogging is undoubtable, other ecosystem variables and policies that build on the availability of DPIs were critical. These included interventions to create a more enabling legal and regulatory framework, national policies to expand account ownership, and leveraging Aadhaar for identity verification.”

Notably, since its inception, the number of PM Jan Dhan Yojana (PMJDY) accounts opened has tripled, reaching a staggering 462 million by June 2022. Women hold the majority share of these accounts, accounting for 56 percent, which is more than 260 million accounts.

The Jan Dhan Plus program, aimed at encouraging low-income women to save, has resulted in over 12 million women customers as of April 2023 and a 50 percent increase in average balances in just five months.

Furthermore, the document estimates that by engaging 100 million low-income women in savings activities, public sector banks in India can attract approximately Rs 25,000 crore ($3.1 billion) in deposits.

The document also highlighted the monumental success of Government-to-Person (G2P) payments in India, leveraging DPI. Over the last decade, India has built one of the world’s largest digital G2P architectures, supporting transfers amounting to about $361 billion directly to beneficiaries through 312 key schemes.

As of March 2022, these efforts resulted in total savings of $33 billion, equivalent to nearly 1.14 percent of GDP.

The United Payments Interface (UPI) system has also seen phenomenal success, with more than 9.41 billion transactions valued at about Rs 14.89 trillion in May 2023 alone. In the fiscal year 2022–23, the total value of UPI transactions accounted for nearly 50 percent of India’s nominal GDP.

The DPI in India has not only fueled government initiatives but also enhanced efficiency for private organizations. Reductions in complexity, cost, and time for business operations have been observed across the board. For instance, some non-banking financial companies (NBFCs) have reported an 8 percent higher conversion rate in SME lending, a 65 percent savings in depreciation costs, and a 66 percent reduction in costs related to fraud detection.

Industry estimates show that banks’ costs for onboarding customers in India have plummeted from $23 to just $0.1 with the utilization of DPI.

UPI.

The World Bank also noted that India Stack has streamlined and digitized Know Your Customer (KYC) procedures, leading to lower costs. Banks employing e-KYC have reduced their compliance costs from $0.12 to $0.06. These cost reductions have made lower-income clients more attractive to service and generated profits for developing new products.

Furthermore, the UPI-PayNow interlinking between India and Singapore, operationalized in February 2023, aligns with the G20’s financial inclusion priorities, facilitating faster, cheaper, and more transparent cross-border payments.

India’s Account Aggregator (AA) Framework, regulated by the RBI, aims to strengthen India’s data infrastructure. It enables consumers and enterprises to share their data only with their consent through an electronic consent framework. As of June 2023, a total of 1.13 billion cumulative accounts have been enabled for data sharing, with 13.46 million cumulative consents raised.

India’s rapid advancements in financial inclusion and digital infrastructure have undoubtedly set a global benchmark, earning praise and admiration from international organizations like the World Bank. This achievement not only signifies economic progress but also demonstrates the power of digital innovation in transforming lives and enabling financial access for all.

ALSO READ-India lists key financial inclusion measures  

Previous Story

Jayapal Introduces Resolution For 9/11 Racism Victims

Next Story

India, US begin talks to send Indian astronaut to ISS

Latest from -Top News

Harvard sues Trump over foreign students ban

Harvard University has filed a federal lawsuit against the Trump administration after being barred from enrolling international students, marking its second legal challenge in a month against what it describes as politically

Pakistan may face stricter IMF terms

The International Monetary Fund (IMF) will undertake its next funding review for Pakistan in the second half of 2025, with 11 new conditions now attached to the continuation of its Extended Fund

Indian diaspora in Japan backs Operation Sindoor

Members of the Indian diaspora in Japan have strongly endorsed Operation Sindoor, India’s targeted military response to the April 22 terror attack in Pahalgam, Kashmir, praising Prime Minister Narendra Modi’s leadership and

WHO adopts Global Pandemic Agreement

The agreement seeks to boost international coordination and ensure equitable access to life-saving tools during future pandemics, while reaffirming respect for national sovereignty in public health decisions In a move aimed at
Go toTop

Don't Miss

India set to join elite group with its Deep Sea Mission

Expressing pride and optimism about the progress of the Deep

Modi, Macron discuss positive outcomes of India-EU Leaders’ Meet

Prime Minister Modi also thanked President Macron for Covid-19 assistance