Mumbai: The Reserve Bank of India (RBI) has said that there is a 24% increase in financial inclusion (FI) which is measured by the RBI fi-index between March 2017 and March 2021.
The index fi combines banking, investment, insurance, postal details and also The pension sector in consultation with the government and sectoral regulators respectively.
In April this year, the RBI has announced that it will launch the index to capture the level of financial inclusion.
On Tuesday, the RBI announced the first numbers of the index, and will then publish data once a year in July.
The highest battery in the index (45%) is given to the use of various financial services, followed by access (35%) and quality (20%).
The index captures information about various aspects of financial inclusion in one value, ranging from 0 and 100, where 0 represents complete financial exceptions and 100 shows full financial inclusion.
One of the biggest drivers of financial inclusion in this country is Pradhan Mantri Jan Dhan Yojana (PMJDY).
There are around 42.6 PMJDY Crore account holders with more than 55% of women.
While JDDY was launched in 2014, the use of accounts was taken with an increase in the transfer of direct benefits (DBTS), which was facilitated by the digital and aadhaar platform.
The impact of digital payments in DBT can be seen from the fact that Rs 5.5 lakh Crore is transferred digitally in 319 government schemes spread across 54 ministries for 2020-21.
Because of a pandemic, financial inclusion gets a boost because of the increasing use of digital platforms by small traders and peer-to-peer payments.
“Lessons from the past and experiences obtained during the Covid pandemic clearly show that financial inclusion and inclusive growth strengthen financial stability,” said the Governor of RBI Shaktikanta Das, spoke on the financial inclusion summit.
“In March 2021, the Bank had achieved 95.9% of individual digital coverage, while the achievement for business reached 89.8%,” said the watershed on the summit.
The emergence of Fintech also supports financial inclusion because they innovate to simplify and promote digital payments such as UPI (Unified Payment Interface).
According to a report by Macquarie, while retail payments (based on value) have grown in 18% CAGR over FY15 to ’21, UPI has grown on CAGR around 400% above FY17-21 and now forms 10% of the total retail payment (not included RTGS) from 2% was seen a few years ago.
“Even though it becomes too late, the annual throughput value of The21 Upi around the Lakh Crore Hospital is almost 2.8x that the credit card and discharge (at the post) are mostly combined,” said the report.