India ranks low in financial inclusion: Icrier

India has been ranked at 50th position, much above Russia but below China, in IFI prepared by the Indian Council for Research on International Economic Relations (Icrier).

IFI, which gives the extent of availability and usage of banking services in key nations of the world, is based on indicators such as number of bank accounts per 1000 adults, number of ATMs and bank branched per million people and the amount of bank credit and deposit.

The index assumes significance as one of the major goals of the 11th Five-Year Plan is to work for financial inclusion and extend the reach of microfinance to meet credit needs of about 80 per cent of the population not directly covered by banks.

Spain has occupied the top position in IFI, which is based on data from 2004, followed by Canada and Portugal, while countries including Nepal, Zimbabwe and Bostwana are at the bottom of the list. Among the important countries, Germany has been placed at 4th position, the UK 17th, USA 21st and Japan 22nd.

Referring to India, the Icrier study said in spite of low density of bank branches, the usage of banking system in terms of volume of credit and deposit seems to be moderately high. The study also pointed out that number of bank branches per one lakh adults in India was 9.4, compared to 14.6 in Malaysia indicating the scope of expansion of banking services in the country.

Similarly, the report pointed out that domestic deposit as percentage of GDP was 54.9 per cent, against 123.9 per cent in Malaysia. The index developed by the think-tank "can be used to compare levels of financial inclusion across economies at a particular time point. It can also be used to monitor the progress initiatives for financial inclusion over time," said Icrier Director and Chief Executive Officer Rajiv Kumar.