SOUTHERN STATES OUTSHINE REST OF INDIA IN MOBILE BANKING


 

·         Southern states are outshining the rest of India in mobile banking adoption in savings accounts, according to a report by The Boston Consulting Group (BCG).

·         The report was done in association with FICCI and Indian Banks’ Association.

·         As per the report, in terms of accounts with at least one financial transaction on mobile banking in the last six months of FY18, as a percentage of total active savings bank accounts (FY18) - Telangana is at 10%, Andhra Pradesh at 6.30%, Karnataka at 5.50%, Puducherry at 5.80%, Tamil Nadu at 5% and Kerala at 4.70%. The India average is 3.40%.

·         The report had a sample size of over 2,600 respondents and BCG factored 34 banks across four segments – 15 medium PSU banks; six large PSU banks; and five new private banks.

·         Mobile banking activation is at 21% for private banks and at 3% for public sector banks for FY18, BCG said in the report.

·         It also said that eastern and southern states were leading the charge as India continued on the digital journey.

·         In terms of accounts with at least one financial transaction on Internet banking in the last six months of FY18, as a % of total active savings bank accounts- Telangana, Manipur and Mizoram had over 20% when compared to national average of 11.30%. Other southern states too topped the national average on the metric.

·         The theme of the report is Providing financial services to SMEs in an increasingly digital ecosystem.

·         The report pointed out that digital lending to MSME had a huge untapped potential.

·         Currently, in India, out of the total formal credit of around ₹100 lakh crores, only 25% is extended to MSMEs.

·         Spurred by the introduction of the Goods and Services tax (GST), small businesses are increasingly getting formalized as well as digitised.

·         The percentage of MSMEs using digital channels has increased from 41% before the introduction of GST to 47% after GST.

·         BCG said that MSME lending in the economy was at an inflection point, and could be the next engine of credit growth.

·         Currently, digital lending accounts for only 4% of total MSME lending. However, it is expected to rise to twenty-one per cent over the next five years.

·         This significant jump will close the gap with digital retail lending, which is expected to reach around forty-eight per cent of total retail lending in five years.

Source : The Hindu

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