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Banking Penetration a Major Challenge in India
Dec 16, 2016


Private sector banks in India have been on a mission to expand their retail presence over past few years. And the surge in their number of automated teller machines (ATMs) tells the story of maximum reach at minimal cost. But despite the steady growth in the number of ATMs in the country, their penetration as measure by number of ATMs per 1,00,000 adults, is very low.

As today's chart shows, during 2015 the penetration of ATMs was quite poor in India when compared to its peers.

Clearly the number of ATMs in India are not enough for its huge population. The ratio of ATMs will fall further as more households come into the banking system via financial inclusion. Further, as per the survey done by the RBI during May 2016, almost one-third of the ATMs in India have been found non-functional. So apart from financial inclusion, it is critical that the RBI looks into the penetration of banking services as well.

Clearly the number of ATMs in India are not enough for its huge population. The ratio of ATMs will fall further as more households come into the banking system via financial inclusion. Further, as per the survey done by the RBI during May 2016, almost one-third of the ATMs in India have been found non-functional. So apart from financial inclusion, it is critical that the RBI looks into the penetration of banking services as well.

Data Source: Mint IMF

This Chart Of The Day was published in The 5 Minute WrapUp - Here's a Management 'Excited' About Demonetisation and GST

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