New Delhi: Bank account penetration in India increased from 35 per cent to 53 per cent between 2011 and 2014, but the country also suffers from high dormancy rates, says a World Bank report.
According to the World Bank, the rise in number of bank accounts was due to government’s push for financial inclusion. Such growth in number of bank accounts means that 175 million in India became account holders between 2011 and 2014. In August 2014 the Indian government launched Pradhan Mantri Jan Dhan Yojana scheme for comprehensive financial inclusion with the goal of opening a bank account for every household.
It is noticed, under the scheme more than 97 per cent of the accounts were opened with the PSU banks, but around 72 per cent of these accounts show zero balances. As per World Bank report the dormancy rate in India is quite high at 43 per cent and accounts for about 195 million of the 460 million adults with a dormant account around the world. Such report says only 39 per cent of all account holders in India own a debit or ATM card, and using an account might be inconvenient and time-consuming if every transaction requires using a bank teller.
According to the report, globally, from 2011 and 2014, 700 million people became account holders at banks, other financial institutions, or mobile money service providers, and the number of ‘unbanked’ individuals dropped 20 per cent to 2 billion adults.Meanwhile, most of the world’s unbanked are in China, India and Indonesia.