ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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UPI and Business Correspondents Model as Game Changer

This article highlights how public sector banks can adapt technology and data science to utilise the Unified Payments Interface and business correspondents model for robust credit growth rate while being champions in the financial inclusion schemes of the government in the country.

The views expressed in the article are of the author only and not necessarily of the organisation in which she works.
 

Public sector banks (PSBs) play a crucial role in financial inclusion in India in terms of penetration, opening of bank accounts, and mobilising deposits in the bank accounts opened. As per the Reserve Bank of India (RBI), in March 2023, out of 1.63 lakh branches of scheduled commercial banks (SCBs) in India, PSBs have 90,445 branches, which are 2.1 times more than the 42,279 branches of private sector banks (PvSBs). As far as automated teller machines (ATMs) and customer relationship managers (CRMs) are concerned, in the corresponding period, PSBs have 1.38 lakh ATMs and CRMs which are 1.79 times more than the ATMs and CRMs of the PvSBs.

Further, in March 2023, PSBs have opened 162.22 crore deposit accounts which is 3.9 times more than the 41.28 crore deposit accounts opened by the PvSBs. The deposit balance in PSBs’ deposit accounts is `110.50 lakh crore which is almost 1.8 times more than the deposit balance of `60.75 lakh crore in the PvSBs. On average, one PSB branch serves 17,936 account holders, each having an average deposit balance of `68,117. Whereas, on average, one branch of PvSB serves 9,764 account holders each with an average deposit balance of `1.47 lakh. Thus, on average, one branch of PSBs serves almost double the number of account holders than that of the PvSBs with the average deposit balance of PSB account holders much lower than that of the PvSB.

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Updated On : 30th Jan, 2024
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