India's financial inclusion programme gained momentum in 2012 as banks expanded their network and business in rural areas, Crisil said in a survey.
Crisil's financial inclusion index rose 2.7% in 2012, fastest since 2009, as banks opened 79 million savings accounts pointing to a growth of 12.6% from 2011 while agriculture credit expanded by 11.1%.
“As many as 587 out of a total 638 districts in India and 34 out of 35 states and Union territories improved their scores, reflecting a broad-based improvement in financial inclusion,” said Roopa Kudva, CEO of Crisil. The number of bank branches in the bottom 100 districts has increased by 6%, faster than the all-India growth of 5.6%.
While India’s six largest cities have 10% bank branches, the bottom 50 districts have merely 2% of the bank branches. “To speed up inclusion, financial services need to flow beyond the south and the large cities. Specifically, policy makers will have to incentivise expansion of banking services in the districts that have low scores through an increase in branch network and partnerships with other players,” Kudva said.