‘Bank account penetration set to increase in country’

Only 53 p.c. of India’s population has bank accounts as against 79 p.c. in China, says expert.

The Union government’s JAM (Jan Dhan, Aadhaar, Mobile) initiative aimed at helping direct transfer of subsidy to the beneficiary’s account will also help promote bank account penetration in the country, said Amitha Sehgal, professor of banking and faculty member at Management Institute, Mumbai.

Participating in a session on ‘25 years of liberalisation and shaping the future’, jointly organised by the Confederation of Indian Industries (CII), Institute of Company Secretaries of India and Forum of Free Enterprise, here on Thursday, Dr. Sehgal estimated that only 53 per cent of the country’s population had bank accounts as against 79 per cent in China and more than 80 per cent in the U.K., the U.S. and Germany.

The procedure to open a bank account was found to be very unfriendly and posed a big hurdle, particularly to those from rural areas. But now, the Union government has simplified the procedure and a lot of people are opening bank accounts by producing their Aadhaar card, said Dr. Sehgal.

She pointed out that nearly 80 per cent of the country’s population owned a smartphone now. “By 2020, the number of bank account holders will equal the number of smartphone users,” she said, and added that the government was also setting targets for banks to open accounts.

She said India’s first small finance bank called the Capital Small Finance Bank had started its operations by launching 10 branches in Punjab. The bank aims to increase the number to 29 in 2016–17, she said.

S.S. Bhandare, adviser, economic and government policy, Tata Strategic Management Group, said India was positioned to achieve an annual economic growth rate of 7 to 7.5 per cent in a long-term perspective.

N. Muthukumar, chairman, CII Mysuru, said India had witnessed substantial progress during the last 25 years, particularly in the field of telecommunication, automobile and service industry.

M.C. Bhansali, chairman of ICSI, Mysuru chapter, was also present. Over 100 finance heads from various organisations took part in the programme, said a press release from CII Mysuru.