Global Findex Report 2025 by World Bank

Over a third of bank account holders in India were no longer using the banking facilities and had inactive accounts, a World Bank report titled ‘Global Findex 2025’ said, as it cited Jan Dhan Yojana accounts as one of the likely reasons for the country’s high share of account inactivity.

Key Highlights:

India’s Bank Account Inactivity Among the Highest

• 35% of Indian bank account holders had inactive accounts in 2021.
• This is 7 times higher than the average 5% inactivity rate in other developing economies (excluding India).
• Inactive account = no customer-initiated transaction for 12 months or more.

Role of Jan Dhan Yojana

• The World Bank attributes a large part of India’s account inactivity to the Pradhan Mantri Jan Dhan Yojana (PMJDY).
• Launched in August 2014, PMJDY led to 450 million new bank accounts by April 2022.
• Many of these accounts were opened for inclusion, not necessarily for active financial use.

Why Are Accounts Inactive in India?

According to survey respondents:

• Distance to financial institutions
• Lack of trust in banks
• No need to use the account
• 40% said they had insufficient funds
• 30% felt uncomfortable using accounts independently

Comparative Trends

• India’s inactivity rate remained constant between 2017 and 2021, unlike global trends.
• In other developing economies:
  • Inactivity among adults dropped from 17% in 2017 to 9% in 2021.
• In high-income economies, virtually all accounts are active.
• In developing countries, women are 5 percentage points more likely than men to have inactive accounts.

BS