Financial Inclusion News and Analysis Curated Monthly by Sumita Kale
Reserve Bank of India’s latest Annual Report 2021-22 has us stumped. It shows a stupendous rise in the aggregate number of Business Correspondents (BCs) in the country over the past year- the number of BC outlets in villages increased from 11,94,640 in December 2020 to 18,44,732 in December 2021, and in urban areas from 3,24,507 to 14,12,529 – the footnotes clarify that data for December 2021 are provisional and that “There is a significant increase in data reported by few private sector banks.” So the rise from 1.5 million Business Correspondents in India to 3.2 million in one year has been attributed to better data reporting by a few banks. While data reporting is a challenge in the country, getting the basic number of BCs in the country wrong by such a large number points to a deeper malaise.
It is now time for a universal push for better data collection and dissemination from the RBI, National Payments Corporation of India (NPCI), and the Ministry of Finance.
On the other hand, there has been a slew of data coming through from private players. Boston Consulting Group and PhonePe tied up to bring out a report on digital payment trends in India, using insights from official as well as in-house PhonePe data. The study projects digital payments in India to more than triple in value from the current US$3 trillion to US$10 trillion by 2026. Interesting insights include the point that over the past two years, tier 3-6 cities have been the mainstay of rapid adoption of digital payments, amounting to nearly 60-70% of new mobile payment customers. The uneven trends across geographies also come through clearly in the map below.
It is this kind of analysis that the NPCI and RBI should facilitate at an aggregate level.
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