Financial Inclusion and Socio-Economic Development

Financial inclusion is an important keystone of the socio-economic development of a country as well as a significant enabler of poverty alleviation & boosting prosperity. Bringing every citizen under the formal banking system, encouraging digital payments and making financial services easily accessible and affordable for people across the country are some key aspects of financial inclusion. According to a recently released SBI Research report on Financial Access Survey, India has stolen a march in financial inclusion with the initiation of PMJDY accounts since 2014, enabled by a robust digital infrastructure, careful recalibration of bank branches and use of the Banking Correspondent model. Mobile and internet banking transactions per 1,000 adults have increased to 13,615 in 2019 from 183 in 2015. The number of bank branches per one lakh adults rose to 14.7 in 2020 from 13.6 in 2015, which is higher than Germany, China and South Africa. SBI research report also says that states with higher PMJDY accounts balances have seen a perceptible decline in crime. RBI’s annual Financial Inclusion or FI-Index for the period ending March 2021 stood at 53.9 against 43.4 for the period ending March 2017. This index captures information on various aspects of financial inclusion and comprises of three broad parameters-Access, Usage and Quality.

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