Role of digital banking in furthering financial inclusion in covid-19 situation

Bank without bank

Several macroeconomic factors indicate that the basic ingredients to successfully create a digital ecosystem are rapidly gaining ground, far exceeding the supply that supports the Indian government’s financial inclusion agenda. The digital bank, for example, offers numerous benefits to improve it, mainly due to the fact that Indian consumers have shown a strong preference for digital technologies, with growth rates for e-commerce and retail. developed economies.

The Reserve Bank of India generally defines financial inclusion as access to a wide range of financial services at a ‘fair price’. 01 This offer of access to banking services to almost 47% 02 of the indigenous population declared bankrupt could provide great growth opportunities for financial service providers. In this context, digital platforms are likely to provide financial services to low-cost non-bank and superbank populations, especially in rural/remote regions, and increase digital financial access to financial services. cheap. When using digital channels, transaction costs can be up to 90% lower than traditional channels, which reduces the fee cost. Because technology is likely to lead to financial inclusion

The status of financial inclusion in India is expected to improve through technological interventions such as:

• Brick industries are an uneconomical proposal for banks in rural or remote areas

 • There are distribution problems due to localized constraints

• Conventional banking models are not feasible for transactions, deposits, loans, etc. Small in these areas

 • Multiple accounts are useless

• There is a lack of familiarity with financial products

 • There is a strong demand for skilled and skilled labor. Non-banking economies have exploited the potential of digital technology, particularly in the mobile space, to assess the impact of technology-driven inclusion.

 In Kenya04, almost two-thirds of all adults are active customers of mobile payment and money transfer services. While more than 20% of the population in Bangladesh04 use mobile financial services, 50% of mobile phone owners in Tanzania04 use monetary systems.

By comparison, India04, with a non-banking population of about 47% and a base of 900 million mobile subscribers, sees that only 1-1.5% of mobile subscribers actively use mobile money. However, managers of the demand side and the emerging digital ecosystem of the country are still the keys to promoting financial inclusion through the use of digital channels.

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