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‘Five-decade journey in 6 years’, World Bank lauds India’s digital infra leap

The Global Partnership for Financial Inclusion report highlights the linkage of bank accounts, biometric identification and mobile numbers which helped in stepping up financial inclusion rate in the country

Published: Sun 10 Sep 2023, 8:27 PM

By
Issac John

The Victoria Memorial is decorated during the closing day of the first meeting of Global Partnership for Financial Inclusion Working Group of G20 in Kolkata on January 11, 2023. Photo: PTI

Issac John

India achieved remarkable landmarks in creating a robust digital public goods infrastructure in just six years, accomplishments that would typically have taken nearly five decades to realise, the World Bank has said.

In its G20 Global Partnership for Financial Inclusion (GPFI) document released at the G20 Summit in New Delhi, the World Bank praised India's Digital Public Infrastructure (DPI) for its transformative impact in the past 10 years, and advocated for a technology-led public infrastructure, inspired by models developed by nations such as India, Singapore, and Brazil.

The Washington-based institution noted how India has developed a robust digital public goods infrastructure, with initiatives including UPI (Unified Payments Interface), Jan Dhan, Aadhar, ONDC, and CoWin. The GPFI document noted the significant steps taken by the government and the pivotal role of government policies and regulations in shaping the DPI landscape.

In just six years, India has achieved a remarkable 80 per cent financial inclusion rate, a feat that would have taken nearly five decades without a DPI approach, the report said. "Other nations, including Brazil, Estonia, Peru, and Singapore, have similarly embraced DPI models, yielding tangible results that underscore the efficacy of this approach."

The report recommended fostering responsible use of digital public infrastructure to accelerate financial inclusion. It highlighted the linkage of bank accounts, biometric identification and mobile numbers which helped in stepping up financial inclusion rate in India.

"India’s financial inclusion strategy relies on the JAM trinity of Jan-Dhan, Aadhaar, and mobile and integrates digital ID for more efficient account-opening and payment applications for access to financial services. India has digitised 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 lower-income clients more attractive to service and generated profits to develop new products, the report said.

Prime Minister Narendra Modi responded to the report on social media platform X by saying that it is a testament to the "rapid progress and innovation" in India. "India's leap in financial inclusion, powered by Digital Public Infrastructure! A G20 document prepared by the World Bank shared a very interesting point on India's growth. India has achieved financial inclusion targets in just six years which would otherwise have taken at least 47 long years. Compliments to our robust digital payment infrastructure and the spirit of our people," he said.