World Bank: India's 48% bank accounts inactive, thanks to Modi's Jan Dhan, twice that of developing countries

India may have sharply increased the number of bank accounts following Prime Minister Narendra Modi coming to power. However, regrettably, India has the largest share of inactive accounts, too. A just-released World Bank survey, which provides this crucial detail alongside several others, says, "Account owners with an inactive account varies across economies, but it is especially high In India."
Saying that the share of inactive accounts in India is 48 percent, "the highest in the world and about twice the average of 25 percent for developing economies", the World Bank seeks to blame Modi's policies for this. Titled "The Global Findex Database 2017: Measuring Financial Inclusion and the Fin-tech Revolution", the survey report says, "Part of the explanation might be India’s Jan Dhan Yojana scheme, developed by the government to increase account ownership."
Authored by Demirgüç-Kunt, Asli, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess, further referring to the Jan Dhan scheme, the report states, "Launched in August 2014, the programme had brought an additional 310 million Indians into the formal banking system by March 2018", but laments many of them "might not yet have had an opportunity to use their new account."

As against India's 48 percent inactive accounts, as observed over the last 12 months, the report states, "In Afghanistan, Nepal and Sri Lanka about a third of account owners have an inactive account, while in Bangladesh 21 percent do. And Pakistan has a rate of just 13 percent, though it also has a low rate of account ownership compared with other economies in the region." It adds, "In high-income economies only 4 percent of account owners have an inactive account."
The World Bank’s triennial Global Findex report, as the study is identified alternatively, it is based on a survey of more than 150,000 representative individuals, claiming to provide a bird's-eye view of patterns and regularities in data pertaining to finance and financial inclusion – such as saving behavior, use of mobile money, and preferred modes of sending and receiving remittances – in 140 economies.
Pointing towards the existence of gender gap in inactive accounts, the report says, "In developing economies female account owners are on average 5 percentage points more likely than male account owners to have an inactive account. In India, however, this gender gap is about twice as large: while 54 percent of women with an account reported having made no deposit or withdrawal in the past year, only 43 percent of men with an account did so."

The report also points out that in developing economies "76 percent of adults with an inactive account have a mobile phone, including 66 percent in India", though adding, "This represents an opportunity for expanding the use of accounts through digital technology."
According to the report, "Indeed, having an account does not necessarily imply that people save at all. Globally, 42 percent of account owners reported not having saved any money in the past year. In high-income economies 26 percent of account owners reported not having saved any money. And in Brazil, India, Russia, and Turkey — all economies where about 70 percent or more of adults have an account — about 60 percent reported not saving at all."

Comments

Dalit rights and political tensions: Why is Mevani at odds with Congress leadership?

While I have known Jignesh Mevani, one of the dozen-odd Congress MLAs from Gujarat, ever since my Gandhinagar days—when he was a young activist aligned with well-known human rights lawyer Mukul Sinha’s organisation, Jan Sangharsh Manch—he became famous following the July 2016 Una Dalit atrocity, in which seven members of a family were brutally assaulted by self-proclaimed cow vigilantes while skinning a dead cow, a traditional occupation among Dalits.

Powering pollution, heating homes: Why are Delhi residents opposing incineration-based waste management

While going through the 50-odd-page report Burning Waste, Warming Cities? Waste-to-Energy (WTE) Incineration and Urban Heat in Delhi , authored by Chythenyen Devika Kulasekaran of the well-known advocacy group Centre for Financial Accountability, I came across a reference to Sukhdev Vihar — a place where I lived for almost a decade before moving to Moscow in 1986 as the foreign correspondent of the daily Patriot and weekly Link .

Boeing 787 under scrutiny again after Ahmedabad crash: Whistleblower warnings resurface

A heart-wrenching tragedy has taken place in Ahmedabad. As widely reported, a Boeing 787 Dreamliner plane crashed shortly after taking off from the city’s airport, currently operated by India’s top tycoon, Gautam Adani. The aircraft was carrying 230 passengers and 12 crew members. As expected, the crash has led to an outpouring of grief across the country. At the same time, there have been demands for the resignation of Prime Minister Narendra Modi, Home Minister Amit Shah, and the Civil Aviation Minister.

Ahmedabad's civic chaos: Drainage woes, waterlogging, and the illusion of Olympic dreams

In response to my blog on overflowing gutter lines at several spots in Ahmedabad's Vejalpur, a heavily populated area, a close acquaintance informed me that it's not just the middle-class housing societies that are affected by the nuisance. Preeti Das, who lives in a posh locality in what is fashionably called the SoBo area, tells me, "Things are worse in our society, Applewood."

Global NGO slams India for media clampdown during conflict, downplays Pakistan

A global civil rights group, Civicus has taken strong exception to how critical commentaries during the “recent conflict” with Pakistan were censored in India, with journalists getting “targeted”. I have no quarrel with the Civicus view, as the facts mentioned in it are all true.

Whither SCOPE? Twelve years on, Gujarat’s official English remains frozen in time

While writing my previous blog on how and why Narendra Modi went out of his way to promote English when he was Gujarat chief minister — despite opposition from people in the Sangh Parivar — I came across an interesting write-up by Aakar Patel, a well-known name among journalists and civil society circles.

Remembering Vijay Rupani: A quiet BJP leader who listened beyond party lines

Late evening on June 12, a senior sociologist of Indian origin, who lives in Vienna, asked me a pointed question: Of the 241 persons who died as a result of the devastating plane crash in Ahmedabad the other day, did I know anyone? I had no hesitation in telling her: former Gujarat chief minister Vijay Rupani, whom I described to her as "one of the more sensible persons in the BJP leadership."

A conman, a demolition man: How 'prominent' scribes are defending Pritish Nandy

How to defend Pritish Nandy? That’s the big question some of his so-called fans seem to ponder, especially amidst sharp criticism of his alleged insensitivity during his journalistic career. One such incident involved the theft and publication of the birth certificate of Masaba Gupta, daughter of actor Neena Gupta, in the Illustrated Weekly of India, which Nandy was editing at the time. He reportedly did this to uncover the identity of Masaba’s father.

Why India’s renewable energy sector struggles under 2,735 compliance hurdles

Recently, during a conversation with an industry representative, I was told how easy it is to set up a startup in Singapore compared to India. This gentleman, who had recently visited Singapore, explained that one of the key reasons Indians living in the Southeast Asian nation prefer establishing startups there is because the government is “extremely supportive” when it comes to obtaining clearances. “They don’t want to shift operations to India due to the large number of bureaucratic hurdles,” he remarked.

Search This Blog