G20 Praises India’s Record-Breaking Six Years’ Journey Of Financial Inclusion
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A G20 policy document prepared by the World Bank said that without technologies like Mobile phones, Aadhaar, and Jan Dhan Banks accounts, India could have taken 47 years to ensure that 80% of its population is granted access to financial assistance. But with these technologies, they have accomplished this feat in just six years.
The document also noted that the overall value of UPI dealings in India last year was almost half the country’s nominal GDP.
In addition, because of DPI, there was a decrease in the cost of signing up new bank customers, falling from $23 to merely $0.1. In March last year, India saved up to $33 billion, equal to almost 1.14% of its nominal GDP, with the help of Direct Benefit Transfer (DBT).
India Wants To Make Financial Service More Accessible
World Bank created the G20 GPFI document with guidance and support from India’s government, including the Reserve Bank of India and the finance ministry. In the forthcoming G20 conference in New Delhi, India wants to show its accomplishments in digital payments to make financial services accessible to many people.
According to the World Bank report, the India Stack is an exceptional model for the Digital Public Infrastructural (DPI) approach by integrating account aggregation, digital credentials, interoperable payment, and Digital ID.
In just six years, India Stack has pulled off a significant 80% rate of financial inclusion, an achievement that would have taken nearly five decades without the DPI approach.
The report also emphasizes the implementation of DPIs like Aadhaar, alongside features such as mobile phones and the Dhan bank account. These implementations have played a vital role in increasing the ownership of transaction accounts, approximately from 25% of adults in 2008 to well over 80%.
The DPI Will Simplify Cost For Private Companies
Since its takeoff, Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts have recorded significant growth, rising from 147.2 million in March 2012 to 462 million by June last year. Women own 56% of this account, amounting to over 260 million.
Though the role of DPIs in this remarkable growth is undoubtedly essential, several other ecosystem policies and variables played a crucial role in fostering the accessibility of DPIs.
Furthermore, DPIs aim to improve operational efficiency for private companies by simplifying cost complexity and shortening the time spent on business operations.
For certain non-bank financial firms (NBFCs) in India, implementing the Account Aggregator ecosystem gives rise to an 8% increase in SME lending conversion rate, a 66% reduction in costs associated with fraud detection, and a 65% decrease in depreciation costs.
