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After 75 years of Independence, there is an uneven distribution when it comes to accessing banking facilities in public sector banks. Banks in India could tap approximately another Rs 25,000 crore in deposits while financially empowering 40 crore low-income Indians, but they are still out of the radius of organised banking system, according to a joint study by Bank of Baroda and Women’s World Banking.

The study said, after the introduction of PM Jan Dhan Yojana in 2015, crores of Indian women who are out of the banking system, inducted themselves into the system, by nature women are more savings oriented than men. So PSBs have a field to tap nearly 10 crore women in India, who are out of the banking system, which generates a healthy amount of savings amount.

But after the introduction of PM Jan Dhan Yojana, almost 24 crore women have at least a bank account. However, the report makes the distinction that having access to a bank account does not mean it is being used, which is a critical determinant of full financial inclusion.

The study reveals that women are more active and committed savers than men. 70% of the women Jan Dhan customers surveyed save “small” amounts of money such as less than Rs 500/per month by curtailing their expenses.

Additionally, women can influence the saving habits of family members, as well as in their communities. Women have good credit repayment behaviour than men. So it is in the dire need of the banking industry to fetch as many women under the banking system, which the report suggested.

Indian banks could tap approximately another Rs 25,000 crore in deposits while financially empowering 10 crore low-income group women, which turns into financialising approx 40 crore people as a whole across the country.

Pilot project

Women’s World Banking and Bank of Baroda designed a pilot product specifically to encourage greater account usage among women Jan Dhan customers. Jan Dhan Plus is a solution that combines a Jan Dhan account with an incentive to deposit Rs. 500 over four months. In return that account holder receives a Rs 10,000 credit/overdraft facility.

Despite the pandemic impacting the pilot, 18% of participants managed to save and completed four account deposits of Rs 500. Women who started saving with Bank of Baroda have proved to be valuable, as they grew their balances 1.5 times compared to customers who did not enroll.

Even women whose bank accounts were inactive for a year found the scheme to be relevant, changed their savings behaviour and grew their balances by over 90%.

The pilot was conducted with 101 Bank of Baroda branches across Mumbai, Delhi, and Chennai and over 300 Business Correspondent points between February 2020 and August 2020.

During this period, nearly 50,000 men and women customers signed up for Jan Dhan Plus. 32% of women who visited the Business Correspondent points enrolled in the scheme within the first two months of the launch.

The report was published last week called The power of Jan Dhan: Making finance work for women in India.

Experts take

Experts from all the fields lauded this initiative and urged everyone to come forward and make the women financially independent, which ultimately led the nation into the next height of financial independence.

“Women’s financial inclusion requires a more gender-inclusive financial system that addresses the specific demand and supply-side barriers of what women faced. I invite more banks to engage women Jan Dhan customers and make them success. I also would like to invite organisations working in this area to collaborate with the Women Entrepreneurship Platform, a NITI Aayog initiative with the aim to overcome information asymmetry, showcase such initiatives and enable women to avail of their benefits.” said Amitabh Kant, CEO, NITI Aayog.

“Financial inclusion has always been acknowledged worldwide as a key driver of economic growth and a critical factor to dissolve gender inequality and engender social transformation. Jan Dhan Plus, created in collaboration with Women’s World Banking, showed us that with the right encouragement and environment, women strive faster for financial independence and resilience,” said Sanjiv Chadha, MD & CEO, Bank of Baroda.