CRISIL Inclusix 2012 shows highest rise in 3 years
India's overall CRISIL Inclusix score has risen by 2.7 in fiscal 2012 - the highest annual increase since 2009. As many as 587 out of a total 638 districts in India and 34 out of 35 states and Union territories improved their scores, reflecting a broad-based improvement in financial inclusion, said Roopa Kudva, Managing Director & CEO, CRISIL.The growing momentum in financial inclusion can be seen in the following trends:
1. A significant rise in new savings accounts across the 5 regions - north, south, east, west and north-east. Overall, 79 million new savings accounts were opened in fiscal 2012, 12.6% more than in fiscal 2011.
2. Agricultural credit accounts have grown at 11.1%, which is the most since fiscal 2009.
3. The number of bank branches in the bottom 100 districts has increased by 6%, faster than the all-India growth of 5.6%.
The four key elements driving the CRISIL Inclusix score up by 2.7 in fiscal 2012 were:
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1. New deposit accounts in three regions - north, south and east. This contributed 42% to the rise in CRISIL Inclusix.
2. The north, by adding 2.4 million new credit accounts, contributed 11% to the index's increase.
3. Almost 30% of the 5,125 new branches were added in the south, which contributed 9% to the increase.
4. Credit penetration in the top 50 districts jumped significantly as small-borrower accounts surged.
Nevertheless, at 42.8 on a scale of 100, the all-India CRISIL Inclusix score reflects under-penetration of formal banking in the country. Just one in two Indians have a savings account and one in seven has access to bank credit. There are wide disparities in access to financial services, too. While India's six largest cities have 10% of India's bank branches, the bottom 50 districts have merely 2% of the bank branches.
To speed up inclusion, financial services need to flow beyond the south and the large cities. Specifically, policy makers will have to incentivise expansion of banking services in the districts that have low CRISIL Inclusix scores through an increase in branch network and partnerships with other players, Kudva said.
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