World Bank: India has about 19 crore adults without a bank account despite success of Jan Dhan Yojana

April 19,2018:

On Thursday, World Bank stated that, India has about 19 crore adults without a bank account despite the success of the ambitious Jan Dhan Yojana, making it the world's second largest unbanked population after that of China.

Besides, almost half of the bank accounts remained inactive in the past year, multilateral financial institution stated in a report, even as it lauded the Indian Government's financial inclusion scheme, Jan Dhan Yojana, for bringing in additional 31 crore Indians into formal banking system by March 2018.

World Bank stated that Country's adult population with a bank account has more than doubled to 80 per cent since 2011. The Jan Dhan Yojana was launched by Modi government in 2014.

According to latest Global Findex Database released by World Bank on the sidelines of annual Spring meeting of the International Monetary Fund and the World Bank, 11 per cent of the world's unbanked adults are in India.

Globally, 69 per cent of adults - 3.8 billion people - now have an account at a bank or mobile money provider, a crucial step in escaping poverty.

This is up from 62 per cent in 2014 and just 51 per cent in 2011. From 2014 to 2017, 515 million adults obtained an account, and 1.2 billion have done so since 2011, according to the Global Findex database.

World Bank stated that China and India, despite having relatively high account ownership, claim large shares of the global unbanked population because of their sheer size.

Home to 225 million adults without an account, China has the world's largest unbanked population, followed by India (190 million or 19 crore), Pakistan (100 million), and Indonesia (95 million).

In India, share of adults with an account has more than doubled since 2011, to 80 per cent, the World Bank said, adding that an important factor driving this increase was a government policy launched in 2014 to boost account ownership among unbanked adults through biometric identification cards.

Between 2014 and 2017, account ownership in India rose by more than 30 percentage points among women as well as among adults in the poorest 40 per cent of households.

Among men and among adults in the wealthiest 60 per cent of households it increased by about 20 percentage points.

World Bank said a strong government push to increase account ownership through biometric identification cards in India helped narrow both the gender gap and the gap between richer and poorer adults.

In India three years ago, men were 20 percentage points more likely than women to have an account.

Globally, 1.7 billion adults remain unbanked, yet two-thirds of them own a mobile phone that could help them access financial services.

Digital technology could take advantage of existing cash transactions to bring people into the financial system, the report finds.

In South Asia, the share of adults with an account rose by 23 percentage points, to 70 per cent.

Source TOI