Financial Inclusion 2.0 Must Move from Access to Usage

Building on its National Strategy for Financial Inclusion 2019–2024, RBI released NSFI 2025–2030, aligning it with the UN’s 2030 Sustainable Development Goals. The strategy seeks to advance financial inclusion under its next phase, or FI 2.0, and harness the gains made under FI 1.0.

Based on the Rangarajan Committee’s recommendations, a strategic financial inclusion roadmap was laid out in 2008, marking the beginning of a systematic effort by banks to reach unbanked and underserved segments. Banks began pursuing this goal through rolling three-year financial inclusion plans from 2010.

The foundations of these efforts date to the introduction of no-frills bank accounts in 2004–2005, which became a social force connecting people with the formal banking system. In 2012, RBI renamed them Basic Savings Bank Deposit Accounts, which can be opened with a zero balance to expand access to banking facilities.

The real thrust came with the introduction of the Pradhan Mantri Jan Dhan Yojana in August 2014, aimed at ensuring at least one bank account for every family. Banks opened savings accounts in mission mode, taking the total number under the scheme to 585 million and mobilising ₹3.08 trillion in deposits by March 2026. PMJDY has been hailed globally as a pioneering effort to connect the masses with the formal financial system.

Progress So Far
The rollout of NSFI 2025–2030 can be viewed as FI 2.0, aimed at deepening the gains made under FI 1.0 and strengthening the economy.

According to the World Bank’s Global Financial Inclusion Index, or Findex, India’s performance has surpassed the global benchmark. The share of adults with a formal bank account rose from 35% in 2011 to 77% in 2021 and 89% in 2025, against a global average of 79%.

Globally, account ownership rose from 51% in 2011 to 76% in 2021. India’s acceleration was unprecedented. Between 2014 and 2017 alone, account ownership increased by 26 percentage points—nearly four times the global average and three times the increase recorded by other developing nations during the same period.

By 2024, India had recorded the highest percentage growth in adult bank account holders among the world’s 12 most populous countries.

Another notable feature of financial inclusion has been its role in bridging the gender gap. In 2014, the share of women holding bank accounts was just 20%. This rose sharply to 56% by 2021 as PMJDY spurred greater inclusion of women in the financial system.

The inclusion of women can deliver significant economic benefits as they use banking relationships to build enterprises and strengthen collaborative livelihood skills.

RBI began formally measuring financial inclusion in March 2021 by introducing the annual Financial Inclusion Index, or FI-Index. Using a score of 43.4 in March 2017 as the base point, the index is computed using three dimensions.

Access, which carries a 35% weight, covers physical and digital access to financial services through branches, ATMs, business correspondents and internet connectivity. Usage, weighted 45%, measures the actual use of accounts, credit, insurance and digital payments. Quality, weighted 20%, covers consumer protection, financial literacy and the suitability of financial services to users’ needs.

While the FI-Index reached 70 in March 2026, the usage component, which carries the highest weight, remained weak, ostensibly because of inadequate financial education and awareness at the grassroots level.

Deepening Financial Inclusion
Financial inclusion data since 2012 indicate that the objectives set under NSFI 2019–2024 have broadly been met. However, weaknesses remain.

The large number of dormant and inactive accounts, unused debit cards and limited use of the banking system by many account holders point to gaps in financial and digital literacy. In this context, banks can build on the gains of FI 1.0 by implementing the specific strategies articulated under NSFI 2025–2030.

The strategy sets five broad objectives under Panch-Jyoti:

1. Expanding access: Continuing to expand access points while offering diversified and affordable products for every segment of the economy, with safe and secure operations.

2. Promoting women-led inclusion: Encouraging gender-sensitive financial inclusion by engaging homemakers and self-help group members as business correspondents and providing them with the necessary training and support.

3. Supporting livelihood creation: Combining skill development with financial and digital literacy so that account holders can use their banking relationships to develop microenterprises. This will require coordination among agencies to create an ecosystem in which the financial system is used for more than receiving government subsidies.

4. Strengthening financial discipline: Encouraging financial intermediaries to use financial education as a tool for promoting financial discipline.

5. Improving customer protection: Strengthening the quality and reliability of customer protection and grievance redressal mechanisms.

The strategic objectives under Panch-Jyoti include structured recommendations to be implemented through 47 action points. These include three measurement-related action points under the monitoring and measurement mechanism.

The next phase of financial inclusion should therefore focus on increasing usage and quality, improving last-mile access, and making monitoring and measurement more effective and granular.

Impact of FI 2.0
Through multiple efforts, the customer base and the outreach of banking services have expanded significantly. The number of deposit and loan accounts reached 2.95 billion and 410 million, respectively.

However, the low average balance of ₹4,000 in savings accounts and the fact that 30% of deposit accounts are dormant remain areas of concern. According to the World Bank’s Findex, underused and dormant accounts together account for 35%, as some customers maintain bank accounts only to receive subsidies and government pensions and do not
use them more broadly.

Ethical Dimensions of Corporate Governance in Banks in India
If banks implement the five groups of strategies outlined under NSFI 2025–2030, deepen customer relationships and encourage customers to use those relationships to pursue entrepreneurship, the deposit corpus can grow and strengthen the economy.

Collaborative efforts to promote financial and digital education are also needed to make potential entrepreneurs in the hinterland aware of government and bank lending schemes.

As turnover in bank accounts increases, steady deposit inflows can help ease banks’ existing asset-liability management mismatch risks. Having already built a large customer base, banks can reach these customers more easily for additional business.

Deeper relationships under FI 2.0 with customers connected to the formal banking system under FI 1.0 can benefit every stakeholder in the value chain. Banks can also use digital channels and the JAM trinity to increase engagement with customers who have already been onboarded.

FI 1.0 expanded access. The multidimensional tools under FI 2.0 must now deepen usage and advance socioeconomic transformation.