The Great Indian women banking challenge: Will banks come forward and take it up now?

A study undertaken by McKinsey revealed that if women participate equally it will provide the world's economy a GDP boost of $28 trillion by 2025. 
Jan Dhan account holders outside a bank branch. (Photo | EPS)
Jan Dhan account holders outside a bank branch. (Photo | EPS)

In 2020, when multiple bouts of the raging coronavirus pandemic left countless millions unemployed, the women workforce suffered a debilitating blow. According to the Centre for Monitoring Indian Economy (CMIE) data, till November, women accounted for 49% of the job losses post the Covid lockdown. 

The humanitarian crisis forced a large number of them, mostly employed in the unorganised sector, to walk back hundreds of kilometres to their villages leaving behind their jobs. Left without a steady source of income for months, their savings too dried up.

The government of India, as a part of the COVID-19 stimulus package, announced that they will transfer Rs 500 a month (for three months) to all women with Jan Dhan accounts. Although the money deposited was scanty, it could have been the push a section of society needed to begin banking, argues Women's World Banking (WWB).

The New York-headquartered NGO aims to help marginalised women. Operational in India for the last two years, they have been partnering with public-sector banks to design women-centric financial products and "develop commercially viable solutions to advance women's financial inclusion".
"India has made a lot of progress in financial inclusion through their banking schemes. In 2017, 77 per cent women in India had access to Jan Dhan accounts. But that's not enough, women need to use their accounts as well. And of course, there is a gender gap in usage of accounts," says Pallavi Tewari Madhok, Director, Advisory Services of WWB. 

Stats underline her stark observation. Women make up for 55 per cent of the world's unbanked population -- who have no access to banking or don't know how to use them.

"Women are 50 per cent of the population but are not actively contributing to the country's economy. But, they are vital for the economic recovery and growth and first we need to acknowledge that," she advocates.

A study undertaken by McKinsey revealed that if women participate equally it will provide the world's economy a GDP boost of $28 trillion by 2025. 

It's important to recognise that women must have equal economic parity. And providing access to financial services is one of the first steps to ensure parity, she says.

The government of India first announced 'The Jan Dhan Yojana' -- a flagship scheme to promote financial inclusion of the marginalised section of society -- in 2014.

In 2018, the government launched PMJDY 2.0 with enhanced features and benefits. Under the new version, the government decided to shift focus from 'Every Household' to 'Every Unbanked Adult' and the free accidental insurance cover on RuPay cards doubled to Rs 2 lakh for PMJDY accounts opened after August 28, 2018. At the same time, Overdraft (OD) limit too doubled to Rs 10,000 and a facility of availing OD up to Rs 2,000 without conditions was brought in.

On January 6, 2021, the total number of Jan Dhan accounts from (PMJDY) stood at 41.6 crores. However, participation from the womenfolk continues to remain low.

"The government of India has invested in infrastructure. Now, we can enable women to participate. In fact, the government initiated gender-focused schemes like Pradhan Mantri Garib Kalyan Yojna, where the government put Rs 500 in women's accounts for three months during the pandemic. This is revolutionary. The objective was to bolster financial security for the most vulnerable section of women. So, it's a clarion call out there. This is a tremendous opportunity and the government is signalling to the banks to now take this forward and build on it," she added.

India might not have seen so many women have bank accounts before, but for marginalised women who run their household and work for a living, queuing outside banks is a privilege that is not afforded to them always. The gender divide when it comes to access to smartphones and internet strips them of the online banking opportunity too. 

"One of the key channels (then) that women prefer to use is the local banking correspondent network. A banking agent is someone from the community so that women are comfortable. While over 50 per cent Jan Dhan account holders are women, less than 10 per cent of the agents are women. It has been studied that women agents outperform male agents and the government of India should at least recruit 100000 women correspondents so that it can draw the female force. We too went through the correspondent way to reach out to women," she adds.

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