35% of Bank Account Holders in India Had Inactive Accounts in 2021: World Bank Report

Inactive Bank Account in India: A new report from the World Bank shows that many people in India had bank accounts they didn’t use at all in 2021. The report, called Global Findex 2025, says 35% of Indians who owned bank accounts didn’t do anything with them for a whole year. This number is much higher than the average for other developing countries, which stood at just 5%.

One of the reasons why so many people in India have inactive accounts might be the Jan Dhan Yojana scheme. The Indian government started this scheme in 2014 to help more people open bank accounts and join the banking system.

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By April 2022, about 450 million Indians had opened new accounts because of this program. While this helped bring many into the formal banking system, not everyone ended up using their accounts. Inbetween 2017 and 2021, the number of inactive accounts in India stayed almost the same.

Inactive Accounts More Common Among Indian Women

The report also highlights that Indian women are more likely than men to have inactive accounts. In 2021, 42% of women who owned bank accounts did not use them compared to 30% of men. That’s a 12 percentage point difference, and it’s bigger than what is seen in other developing countries. In those places, on average, women were only 5 percentage points more likely than men to have unused accounts.

When asked why they didn’t use their accounts, nearly half of the people in India gave reasons like their bank or ATM being too farnot trusting banks, or simply not needing the account at all. Another major reason was money. Around 40% said they didn’t have enough money to even use a bank account. About 30% said they weren’t comfortable using their accounts alone.

Surprisingly, more men than women said they felt uncomfortable handling their accounts on their own. Around 34% of men with inactive accounts gave this reason, while only 26% of women said the same. This shows that confidence in using banking services is still low among many, regardless of gender.

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The findings are based on a large survey of around 128,000 people from 123 different countries. The survey took place during the COVID-19 pandemic and looked at how people use both formal and informal financial services, including digital tools like mobile phones and the internet for payments.

Bank Account Ownership is Rising Globally

In 2021, about 76% of adults worldwide had an account at a bank or other regulated financial service like a credit union, mobile money app, or microfinance company. That number has grown a lot in the past ten years. In 2011, only 51% of adults had an account, which means account ownership has jumped by 50% between 2011 and 2021.

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