World Bank terms India’s digital growth ‘transformative’
Ajay Banerjee
New Delhi, September 8
A World Bank report has termed India’s Digital Public Infrastructure (DPI) as having a “transformative impact” on India and “extending” far beyond inclusive finance.
Called the ‘G20 Global Partnership for Financial Inclusion document’, the World Bank highlighted the measures taken by India under the term of Prime Minister Narendra Modi and the role of government policy and regulation in shaping the DPI landscape.
The World Bank document says India achieved in 6 years what would have taken about decades.
Jan Dhan Yojana, Aadhaar and Mobile number (JAM) linking has propelled financial inclusion rate from 25 per cent in 2008 to over 80 per cent of adults in last 6 years.
The document notes, “While DPIs’ role in leapfrogging is undoubtable, ecosystem and policies that build on the availability of DPIs were critical. These included interventions to create a more enabling legal and regulatory framework, national policies to expand account ownership, and leveraging Aadhaar for identity verification.”
Bank accounts under the PM Jan Dhan Yojna have tripled from 147.2 million in March 2015 to 462 million by June 2022; women are the account holders in 56 percent of these accounts—more than 260 million.
About $361 billion have been directly transferred to beneficiaries from 53 Central Government ministries through 312 schemes. Digital transfers, as of March 2022, have resulted in a total savings of $33 billion, equivalent to nearly 1.14 per cent of the GDP.
About 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 transactions under the unified payment interface (UPI) was nearly 50 per cent of India’s nominal GDP, said the report.
According to industry estimates, banks’ costs of onboarding customers in India decreased from $23 to $0.1 with the use of DPI, the report noted.
Also, banks reported a lowered cost of compliance for know your customer ‘India stack’, a group of software programmes 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 low-income clients more attractive to service by the banks and generated profits to develop new products.
The expansion now called ‘UPI-PayNow’, interlinking between India and Singapore, was operationalised in February 2023. It aligns with G20’s financial inclusion priorities and facilitates faster, cheaper, and more transparent cross-border payments.
India’s Account Aggregator (AA) Framework aims to strengthen India’s data infrastructure, enabling consumers and enterprises to share their data only with their consent through an electronic consent framework. The framework is regulated by the RBI.
A Total of 1.13 billion cumulative accounts are enabled for data sharing, with 13.46 million cumulative number of consents raised in June 2023 alone.
