Why in the News?
The Reserve Bank of India (RBI) has launched a new National Strategy for Financial Inclusion (NSFI) 2025–30, a five-year plan aimed at deepening financial inclusion across the country.
About Financial Inclusion
- Definition: The process of ensuring access to financial services, timely and adequate credit for vulnerable groups such as weaker sections and low-income groups at an affordable cost.
- Present Status:
- Financial Inclusion Index (FII): RBI's FII has risen steadily to 67.0 in 2025.
- FI-Index was launched in 2021 to capture the financial inclusion across the country while representing different sectors such as banking, investment, insurance, postal and pension.
- Account Ownership: Global Findex 2025 highlighted that account ownership in India has reached to 89% (in 2024) since 2011.
- Banking Infrastructure: Banking Infrastructure per lakh population increased from 30.1 Fixed-point Business Correspondents (FBCs) per lakh population in 2019 to 85.6 FBCs in 2024.
- Financial Inclusion Index (FII): RBI's FII has risen steadily to 67.0 in 2025.
- Digital Transactions: RBI's Digital Payments Index (RBI-DPI) surged to 493.22 in March 2025, up from 153.47 in March 2019.
- RBI-DPI, introduced in January 2021 with March 2018 as the base period set at 100, is designed to track the extent of digitalisation in payments across the country.
NSFI 2025–30
- Genesis: The strategy leverages the gains and progress made during the implementation of the National Strategy for Financial Inclusion 2019-2024, which was released in 2020.
- Objectives: It focuses on improving last-mile access and usage of financial services, and lays out five strategic objectives named as Panch-Jyoti along with 47 specific action points (see table).
Strategic Objectives and Action Points under NSFI 2025-30 | |
Strategic Objectives | Key Action Points |
Improving the availability and use of Equitable, Responsible, Suitable, and Affordable Bouquet of Financial Services to achieve Financial Safety and Financial Security for households and micro enterprises |
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Adopting Gender-Sensitive Approach for Women-led Financial Inclusion and Differentiated Strategies for Improving Financial Resilience of Households, especially for the Underserved and Vulnerable segments |
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Synergizing Livelihood, Skill Development and Support Ecosystem and its linkages with Financial Inclusion |
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Leveraging Financial Education as a tool for Promoting Financial Discipline |
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Strengthening the Quality and Reliability of Customer Protection and Grievance Redressal Measures |
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Government Steps for Financial Inclusion
- Pradhan Mantri Jan Dhan Yojana (PMJDY): A flagship program providing for the access to basic savings & deposit accounts, remittance, credit, insurance, and pension in an affordable manner.
- As of 2025, over 56 crore Jan Dhan bank accounts have been opened, where over 55 per cent accounts are held by women.
- Unified Payments Interface (UPI): UPI accounts for 85 per cent of all digital transactions in India and powers nearly 50 per cent of global real-time digital payments.
- Pradhan Mantri MUDRA Yojana (PMMY): It facilitates loans up to ₹20 lakhs to income-generating small and micro enterprises engaged in the manufacturing, trading or service sectors.
- In the past decade, over 53 crore loans amounting to ₹35.13 lakh crore have been sanctioned under MUDRA.
- Insurance and Pension for All: The Jan Suraksha schemes launched in 2015, namely Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) for life insurance, Pradhan Mantri Suraksha Bima Yojana (PMSBY) for accident insurance, and Atal Pension Yojana (APY) for old-age income security, have provided a safety net to the poor at nominal premiums.
- Banking Infrastructure & Innovation: The RBI has facilitated the expansion of banking outlets through both brick-and-mortar branches and the Business Correspondent (BC) model.
- In addition, RBI created new categories of banks, Payments Banks, and Small Finance Banks aimed at serving low-income and rural customers with niche banking services.
Key Challenges in India's Inclusion Journey
- Dormant Accounts: An estimated 23% of PMJDY accounts had seen no transactions in the past year far above the 3–4% dormancy seen in comparable developing countries.
- The Global Findex Survey identify barriers such as distance, distrust, and disuse. For 28% of dormant account holders, banks are too remote, particularly in rural India.
- Gender Gaps and Social Barriers: Women hold about 56% of Jan Dhan accounts, but only 28% of them actively use digital financial services, compared to ~41% of men.
- Women-led businesses also struggle with formal credit access (only ~10% get institutional loans) due to collateral and bias issues.
- Urban–Rural Divide: About 59% of urban adults use modes like UPI or cards, whereas only 14–27% in rural areas do so.
- Issues like patchy internet connectivity, power supply, and low smartphone penetration in some regions impede digital banking.
- Low Financial Literacy and Awareness: A foundational challenge is that financial literacy levels remain low overall (only ~27% of Indian adults are financially literate (WEF)).
Conclusion
Advancing financial inclusion requires strengthening financial literacy, leveraging technology for last-mile access, and designing need-based financial products for underserved groups. Alongside this, innovative digital lending and alternative credit assessment can bridge credit gaps for small borrowers. Together, these measures can convert access into meaningful and inclusive financial participation.
