Grant Thornton explores driving financial inclusion in Rural India
Grant Thornton has released a report entitled “'Financial Inclusion and Rural India -- Banking & ATM sector in India,” looking at the widening reach of Financial services in remote areas of what is the 7th largest economy globally.
The report focuses on what financial inclusion means for India and the reach of the banking and ATM sector across the country and highlights the contributions of non-banking companies towards the goal of financial inclusion.
According to the report, 69% of adults have bank accounts in India as of the release of the report. The report highlights the acceleration of financial inclusion due to political and government initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY), Direct Benefit Transfer (DBT) and issue of RuPay cards, among others.
The government has followed a threestep approach to achieve its goal of financial inclusion. First, it has provided universal access to banking facilities by opening ‘no frill’s accounts for the masses. Second, it has brought and retained people in the financial system through initiatives like digital payments and promoting the use of RuPay cards. Third, it has focused on creating the necessary infrastructure by increasing the reach and accessibility of financial services. Through its conducive policies, the government is promoting banking correspondents, white label ATMs (WLAs) and digital payments. As a result, a new generation of financial services accessed through mobile phones and the internet has emerged in the country, according to the Grant Thornton report.
In its financial inclusion drive, the government is also supported by the private sector players, described the report. Companies such as Vakrangee, BTI payments, FINO, etc., have delivered service innovations by substantially strengthening their business models. By providing many banking and ATM services through a technology-driven platform, they have managed to boost rural entrepreneurship, increase the level of financial literacy and leverage their presence by becoming an integral part of the supply chain for e-commerce and other companies waiting to tap into the rural market.
In a press release by Vakrangee, financial inclusion is the key to bridging the social divide and achieving a well distributed, robust and sustainable economic growth.
Vakrangee credits the recent initiatives of the Government and RBI for widening the reach of financial services in far and remote areas by allowing private players to act as Business correspondents and non-bank entities to set up white label ATMs (WLA) across the country.
Vakrangee, according to the press release, has emerged as a leading player at the forefront of driving financial and social inclusion in Rural India, and has drawn attention to the key highlights and observations from the Grant Thornton report, which are as follows –
Vakrangee has been named as the fastest growing and third largest WLA player in the country. In the ATM segment, Rural share of public sector Banks is 20%, in private sector it is 9% but the Rural share of WLA is 49%. Thus, indicating WLAs have larger presence across Rural India; Vakrangee has over 12,000 BC points, of which 82% are in Rural India; In FY2018, Vakrangee BC's opened 31.7% of all BSBDAs opened by all BC's in India; Vakrangee is the 13th Largest ATM operator in India. However, in Rural India it is 3rd largest ATM operator behind only SBI and Tata Indicash; When compared to private sector Banks, it ranks over a number of private Banks such as Axis Bank (1,905 ATMs), HDFC Bank (1,063 ATMs) and ICICI Bank (760 ATMs) in Rural India; Banking and ATM throughput from Vakrangee network for FY 2019 (till 31 December 2019) is INR218 billion.
The full Grant Thornton Report can be found HERE.
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