Despite the government's efforts on promoting cashless payments, only one third of the account owners have made at least one digital payment in the past 12 months, a new report by World Bank says. The Findex study on financial inclusion confirms the prevailing fact, that cash still reigns supreme in India. About 65 million account owners in India still use cash to send or receive domestic remittances.
In India, less than half of the account owners have a debit card and among those who do, only about a third used it to make a direct purchase.
While the report acknowledges the role of Jan Dhan Yojana in increasing the number of people with a bank account, the interesting part is, almost half the accounts remained inactive in the past year. Only 20 per cent of the account owners used these accounts to save. The government therefore, cannot pat its back on making financial services accessible to masses.
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), Pakistan (100 million), and Indonesia (95 million).
The Findex report also throws light on gender imbalance in account penetration. "In India three years ago, men were 20 percentage points more likely than women to have an account. Today, India’s gender gap has shrunk to six percentage points thanks to a strong government push to increase account ownership through biometric identification cards," says the report.
Still, in most of the world women continue to lag well behind men. Globally, 65 per cent of women have an account compared with 72 per cent of men, a gap of seven percentage points that is all but unchanged since 2011.
The disparity is in digital payments too. In India, for example, 42 per cent of male account owners use digital payments, while just 29 per cent of female account owners do.