India has achieved financial inclusion milestones in just six years, a process that would have otherwise taken 47 years, according to a document prepared by the World Bank for the G20 Global Partnership for Financial Inclusion, published on Thursday. This rapid progress has been primarily led by the country's Digital Public Infrastructure (DPI).
The document highlighted the crucial role of government policy and regulation in shaping the DPI landscape. Interventions to create an enabling legal and regulatory framework, national policies to expand account ownership, and leveraging Aadhaar for identity verification were identified as key factors contributing to this accelerated growth.
The JAM (Jan Dhan-Aadhaar-Mobile) Trinity, a governmental initiative, has driven the financial inclusion rate from 25% in 2008 to over 80% of adults over the past six years. The number of PM Jan Dhan Yojana (PMJDY) accounts opened tripled from 147.2 million in March 2015 to 462 million by June 2022, with women holding 56% of these accounts.
In addition to the JAM Trinity, the Jan Dhan Plus programme has encouraged low-income women to save, resulting in over 12 million female customers as of April 2023 and a 50% increase in average balances within just five months. The Centre estimates that engaging 100 million low-income women in savings activities could attract approximately Rs 25,000 crore ($3.1 billion) in deposits for public sector banks.
The DPI has also enhanced efficiency for private organizations by reducing complexity and costs associated with business operations in India. Industry estimates indicate that banks' costs of onboarding customers have decreased from $23 to $0.1 with the use of DPI.
Moreover, more than 9.41 billion transactions valuing about Rs 14.89 trillion were transacted in May 2023 alone. For the fiscal year 2022–23, the total value of Unified Payments Interface (NASDAQ:TILE) (UPI) transactions was nearly 50% of India's nominal GDP.
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