GS3 – Indian Economy
Context
The World Bank’s Global Findex 2025 report indicates near-universal financial account ownership in India, but highlights challenges in account activity and usage.
Key Highlights:
- Account Ownership rose from 35% (2011) to 89% (2024).
- Bank vs Mobile Money Accounts:
- 88.7% have accounts with formal financial institutions.
- 23.1% report owning mobile money accounts.
- Inactive Accounts:
- 14% of adults have inactive accounts.
- This is more than double the global average of 6%.
- Gender & Rural Inclusion:
- Account ownership is nearly equal among women (89.2%) and rural populations (89.9%).
- Digital Payments:
- Only 48.5% of adults received a digital payment in the last year.
- Smartphone ownership is just 42%, and only 66.5% own a mobile phone.
- Women receiving digital transfers increased from 13% (2021) to 24% (2024).
Barriers to Active Use:
- Family-centric financial behaviour: Dependency on accounts of other household members.
- Lack of income: Low earnings prevent regular transactions.
- High costs and distance: Access to banking infrastructure remains difficult in remote areas.
- Security gaps: Weak digital security; only 38.3% use phone passwords.
Way Forward:
- Improve infrastructure: Broaden smartphone and internet access.
- Promote awareness: Enhance financial literacy and cyber safety.
- Design inclusive solutions: Develop affordable and accessible digital financial tools.
- Ease of use: Create user-friendly, multilingual platforms.