New Delhi, Sep 8 (SocialNews.XYZ) The World Bank has appreciated India's financial inclusion measures in a document prepared for the G20, observing that it's Jan Dhan-Aadhaar-Mobile (JAM) trinity has propelled financial inclusion rate from 25 per cent in 2008 to over 80 per cent of adults in last the six years, a journey shortened by up to 47 years thanks to digital public Infrastructure (DPIs).
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The document highlighted the groundbreaking measures taken by the NDA government and the pivotal role of government policy and regulation in shaping the DPI landscape, it said.
The document categorically notes, “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.”
Since its launch, the number of PM Jan Dhan Yojana (PMJDY) accounts opened tripled from 147.2 million in March 2015 to 462 million by June 2022; women own 56 per cent of these accounts, more than 260 million, it said.
The Jan Dhan Plus programme encourages low-income women to save, resulting in over 12 million women customers (as of April 2023) and a 50 per cent increase in average balances in just five months, as against the entire portfolio in the same time period, the World Bank document noted.
It is estimated 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, it said.
On the Government to Person (G2P) payments, the document said that in the last 10 years, India has built one of the world’s largest digital G2P architectures leveraging DPI.
This approach has supported transfers amounting to about $361 billion directly to beneficiaries from 53 central government ministries through 312 key schemes.
As of March 2022, this had resulted in a total savings of $33 billion, equivalent to nearly 1.14 per cent of GDP.
Under the united payments interface (UPI) system, more than 9.41 billion transactions valuing about Rs 14.89 trillion were transacted in May 2023 alone, the World Bank document elaborated.
For 2022–23, the total value of UPI transactions was nearly 50 per cent of India’s nominal GDP.
The DPI in India has also enhanced efficiency for private organisations through reductions in the complexity, the cost and the time taken for business operations in India.
Even some NBFCs have enabled 8 per cent higher conversion rate in SME lending, a 65 per cent savings in depreciation costs and 66 per cent reduction in costs related to fraud detection.
According to industry estimates, banks’ costs of onboarding customers in India decreased from $23 to $0.1 with the use of DPI, it noted.
The World Bank also mentioned that India Stack has digitised and simplified KYC procedures, lowering costs.
Banks that use e-KYC lowered their cost of compliance from $0.12 to $0.06. The decrease in costs made lower-income clients more attractive to service and generated profits to develop new products.
The UPI-PayNow interlinking between India and Singapore, operationalised in February 2023, aligns with G20's financial inclusion priorities and facilitates faster, cheaper, and more transparent cross-border payments, said the document.
India’s Account Aggregator (AA) Framework aims to strengthen India’s data infrastructure, enabling consumers and enterprises to share their data only with their consent through an electronic consent framework. The framework is regulated by the RBI.
A total of 1.13 billion cumulative accounts have been enabled for data sharing, with 13.46 million cumulative number of consents raised in June 2023.
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