G20 Document: India Achieves Financial Inclusion Rate of 80% In 6 Years Instead of 47

The World Bank released a policy statement ahead of the G20 meeting in New Delhi that notes that it may have taken India 47 years to reach the 80% financial inclusion rate that it has now attained in only six.

"The UPI platform has gained significant popularity in India; more than 9.41 billion transactions valuing about Rs 14.89 trillion were transacted in May 2023 alone. For the fiscal year 2022-23, the total value of UPI transaction was nearly 50 percent of India's nominal GDP," the document reads.

"The India Stack exemplifies this approach, combining digital ID, interoperable payments, a digital credentials ledger and account aggregation. In just six years, it has achieved a remarkable 80% financial inclusion rate-a feat that would have taken nearly five decades without a DPI approach," the G20 policy document says.

Mr Edul Patel CEO & Co-founder, Mudrex- A Global cryptocurrency investing platform said "India has made remarkable strides in financial inclusion. In a recent milestone, India recorded an impressive 9 billion transactions valued at 14 lakh crore in June. According to a PwC report, India is also likely to witness 1 billion UPI transactions per day by 2026-2027, representing 90% of retail digital payments in the nation. These achievements are attributed to the expansion of digital payment infrastructure and increased accessibility to the internet and smartphones in recent years, fostering the rapid growth of UPI transactions in India. With many user-friendly apps available in the country, solving for easy transactions has become more convenient than ever. Furthermore, the government's initiatives and policies aimed at promoting digital financial services have further accelerated this trend."

"In India, the implementation of DPIs such as Aadhaar (a foundational digital ID system), along with the Jan Dhan bank accounts and mobile phones, is considered to have played a critical role in moving ownership of transaction accounts from approximately one-fourth of adults in 2008 to over 80 percent now-a journey that it is estimated could have taken up to 47 years without DPIs," G20 policy document prepared by the World Bank reads.

"In the last decade, India has built one of the world's largest digital G2P architectures leveraging DPI. This approach has supported transfers amounting to about $361 billion45 directly to beneficiaries from 53 central government ministries through 312 key schemes. As of March 2022, this had resulted in a total savings of $33 billion,46 equivalent to nearly 1.14 percent of GDP," stated the document.

"The India Stack has digitized and simplified KYC procedures, lowering costs; banks that use e-KYC lowered their cost of compliance from $0.12 to $0.06. The decrease in costs made lower-income clients more attractive to service and generated profits to develop new products," reads the document.