Understanding the Total Number of People with Bank Accounts in India
As of latest data, India's population stands at approximately 1.4 billion people, reflecting a dense and diverse demographic landscape. The quest for financial inclusion has been a significant focus, with substantial progress made in the number of bank accounts. However, the actual number of unique individuals holding bank accounts is a complex issue. According to the Reserve Bank of India (RBI), there were over 1.5 billion bank accounts in the country, including individual, joint, and accounts opened under government schemes like the Pradhan Mantri Jan Dhan Yojana (PMJDY).
The Dilemma of Multiple Accounts
It's essential to acknowledge that the number of accounts exceeds the population due to individuals holding multiple accounts. This can be attributed to various reasons including the convenience of having multiple financial instruments for different purposes, like salary accounts, savings accounts, or children's accounts. The 2011 Census reveals that only 147 million households (out of 247 million) enjoyed banking facilities, indicating a significant gap in the reach of banking services.
The Scenario in the Developed World
Comparatively, developed nations have much higher banking penetration rates. For instance, the penetration rate in developed countries is between 92% and 99%, highlighting the stark difference in financial access and inclusion.
Challenges and Limitations in Data Collection
The data available for assessing the number of bank accounts and financial inclusion is often insufficient due to various factors:
Multiple accounts per person: In a small family of three, there can be up to ten bank accounts, excluding current and fixed deposit accounts. Accounts that open and close frequently: Banks may not close dormant accounts, leading to inflated account numbers. For example, I have an HDFC bank account from 2007 or 2008 that remains open despite no transactions, and the bank continues to send monthly statements. Lack of real-time data: RBI provides provisional weekly data that is not always reliable for real-time analysis. Annexure: The Central government has been working on making PAN (Permanent Account Number) universal, but challenges such as duplicate PAN cards still persist.Estimates and Projections
Given the complex nature of the data, estimates can vary. According to the number of PAN cards in India, as of March 2015, there were around 223 million PAN card holders. Assuming every bank insists on the PAN card and discarding corporate partnership firms and other PAN holders, there could be approximately 223 million bank accounts, with a minimum of 22.3 crore unique accounts. Extrapolating this, the range can extend to a maximum of 35-40 crore accounts, but realistically, it is unlikely to exceed this number.
Demographic Insights
India's population is around 1.3 billion, with approximately 50% of the population being below 25, and roughly 90% of this percentage being below 18. This means around 59 crore individuals are below 18 and cannot have bank accounts. Therefore, the potential pool for bank accounts is about 71 crore, while only 40 crore currently have bank accounts. This suggests that approximately 31 crore people may still lack access to bank accounts.
Conclusion
The journey towards financial inclusion in India is an ongoing process. While significant progress has been made in terms of increasing the number of bank accounts, particularly with the success of PMJDY, the challenge remains in ensuring that these accounts are active and beneficial to the individuals they serve. Banks and governmental bodies must work towards eliminating duplicate accounts and closing dormant ones to provide a more accurate picture of financial inclusion in India.