Financial inclusion schemes to get digital push in upcoming budget

The government is likely to scale up its flagship financial inclusion schemes while focusing on digitisation in the upcoming budget, said officials

The plan includes setting up more digital banking units (DBUs) and bringing about a digital interface for greater integration between Jan Dhan accounts, Jeevan Jyoti and Suraksha Bima Yojana, they said.

The government is also looking to expand the coverage of doorstep banking and is firming up a new framework for business correspondents, said one of the officials, who did not wish to be identified.


"The focus will be on regularising small accounts by making them fully compliant with KYC (know your customer) requirements and then achieving saturation by linking insurance and pension schemes with these accounts for intended beneficiaries," said the official.

A unified digital interface (portal) for ensuring seamless end-to-end connectivity between various stakeholders is also expected, according to the official, where the Indian Banks' Association, Life and General Insurance Council may jointly create an institutional mechanism for the creation and operation of the portal.

India is keen to showcase its success in digitisation and fintech during its G20 presidency. The official said the plan is to have a more integrated and holistic approach about the financial inclusion to build upon the success of Pradhan Mantri Jan Dhan Yojana (PMJDY).

Out of a total of 462.5 million PMJDY accounts, 81.2% are operational, up from 76% in 2017,according to a recent Reserve Bank of India report.

Only 8.2% of PMJDY accounts have zero balances, about 56% of account holders are women, and 67% of PMJDY accounts are in rural and semi urban areas.

Separately, a new framework for the functioning of business correspondents is being discussed which seeks to strengthen the ecosystem.

"There will be a focus on doorstep banking and the setting up of more digital banking units, which will also act as financial literacy centres," said another official, requesting anonymity.

In October 2022, at the launch of DBUs, Prime Minister Narendra Modi said the economy of any country is as progressive as its banking system is strong and that fintech would lead to a financial revolution.

"If Jan Dhan accounts had laid the foundation of financial inclusion in the country, then fintech would form the basis of financial revolution," the PM said while dedicating 75 DBUs in as many districts in the country.