The much awaited third dataset on financial inclusion, Global Findex, was released last month. India has reported a significant leap in financial inclusion - 80% of Indians above the age of 15 had a formal financial account in 2017, compared to 53% in 2014 and 35% in 2011. However, while ownership and access to accounts have improved dramatically, 48% of registered formal financial accounts were reported to be dormant. Clearly, we still have to crack the challenge of making banking relevant to the financial lives of low income customers. Policy should make a shift from being mandate driven to being ecosystem oriented. This calls for a paradigm shift in the regulatory mindset.
The time is ripe for a complete overhaul of our data collection systems, towards a database that accurately reflects progress on financial inclusion. Last month the RBI announced that a Data Sciences Lab will be operational by the end of the year. Indicus policy briefs have been highlighting the lacunae in available data (see for instance, Monitoring the Progress of Financial Inclusion in India), and we hope that the RBI will take this opportunity to push the envelope for financial inclusion. Monitoring data of usage at a granular level of city, block and village will help to pinpoint gaps in coverage and service delivery, and coordination with entities like TRAI and NPCI will provide visibility into specific dark spots of financial and network coverage.