In India, 80% adult Indians now have bank accounts and the World Bank says it has been made possible due to Prime Minister Narendra Modi's Jan Dhan Yojna and verification through Aadhaar.
By: FE Online | Published: April 21, 2018 12:28 PM
80% adult Indians now have bank accounts, thanks to Aadhaar, Jan Dhan Yojna: World Bank (Image: Reuters)
In India, 80% adult Indians now have bank accounts and the World Bank says it has been made possible due to Prime Minister Narendra Modi’s Jan Dhan Yojna and verification through Aadhaar. The World Bank latest Global Findex Database showed that in India 80% of adult Indians have bank accounts and the government-provided biometric identification cards (Aadhaar) were among the factors enabling a rapid decline in the number of adults without an account.
“Jan Dhan Yojana, launched in August 2014, the program had brought an additional 310 million Indians into the formal banking system by March 2018, many of whom might not yet have had an opportunity to use their new account,” the World Bank said. However, it also that despite the success, 1.9 million adult Indians are yet to have bank accounts.
What’s worrying is that in India almost half of the account owners have an account that remained inactive in the past year. In India, the share is 48%—the highest in the world and about twice the average of 25% for developing economies. “100 million adults with an inactive account have a debit card, while nearly 2.5 times as many—240 million—have an inactive account plus a mobile phone,” the report said.
Moreover, businesses generally lag behind governments when it comes to using digital payrolls. About 300 million account owners worldwide work in the private sector and get paid in cash, including 90 million in India. Indeed, India is one of several major developing economies where 10 percent or more of account owners receive private sector wage payments in cash.