BUSINESS
Finance minister P Chidambaram launched Crisil Inclusex, India's first financial inclusion index. The Index will have a scale of 0 to 100. Branch, deposit and credit penetration to be the parameters of the index. Data from 2 lakh data points and 165 banks in CRISIL Inclusix will be included.
The index begins with banking services currently and can be extended to other services further. According to the index, the North East lags most in financial inclusion while top 3 states are Puducherry, Chandigarh and Kerala. India scores 40.1 on the index for 2011, against 35 in 2009.
Key findings:
The key findings of the index have been captured in a report which presents financial inclusion metrics in 632 districts of the country over a three-year timeframe (2009-2011).
Some of them are:
The all-India CRISIL Inclusix score of 40.1 (on a scale of 100) is relatively low. It is a reflection of under-penetration of formal banking facilities in most parts of the country.
The bottom 50 scoring districts have just 2 per cent of the country's bank branches.
Deposit penetration (DP) is the key driver of financial inclusion in India. The number of savings bank accounts, at 624 million, is close to four times the number of loan accounts at 160 million.
Focused efforts to enhance branch presence and availability of credit are extremely critical. The bottom 50 scoring districts in India have only 2,861 loan accounts per lakh of population, which is nearly one-third of the all India average of 8,012.
There are clear signs of improvement in the CRISIL Inclusix score over the past three years. The CRISIL Inclusix score at an all-India level has improved to 40.1 in 2011, from 37.6 in 2010 and 35.4 in 2009. Improvement in deposit penetration score is the key driver of this improvement.
Wide disparities exist across India and within states in terms of access to financial services. India's six largest cities have 11 per cent of the country's bank branches. At the other end of the scale, there are four districts in the North-Eastern region with only one bank branch each.
The key driver for the continued high performance of the top 50 districts is the significant increase in deposit and branch penetration (BP). The DP score for these districts increased by a significant 9.3 in 2011, over 2009. Also, these districts saw an addition of 2,824 branches in this period, nearly one-fourth of the total branches added in the country.
Even in the districts at the bottom of the list, there is an encouraging improvement in branch efficiency. For the bottom 50 districts, the number of savings deposit accounts per branch has improved by 20 per cent to 6,073 as on March 2011 from 4,919 as on March 2009.
Improvement in credit penetration (CP) is the key driver that enabled the improvement in score of 50 most-gaining districts.
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