India's Prime Minister Narendra Modi has received some flak in recent months for his failure to push through crucial reforms. Reducing the country's unbanked may be one of his biggest achievements yet.
More than 180 million people in India entered the financial mainstream last year after Modi's mega financial inclusion initiative Pradhan Mantri Jan-Dhan Yojana (PMJDY) - Prime Minister's People's Wealth Scheme - was launched last August.
The initiative helped reduce the country's unbanked population by more than half between 2011 and 2015, according to PricewaterhouseCoopers (PwC). To put things in perspective, that's more people than the entire population of the U.S.
The number of unbanked currently stands at 233 million – down from 557 million four years ago – marking a 58 percent drop, a PwC report on Tuesday showed.
The primary aim of the program is to replace the distribution of subsidized goods with direct cash transfers as a way of curbing leakages. Accounts also include free life and accident insurance coverage and an overdraft credit facility.
India's swift reduction in its unbanked population appears to be outpacing the global rate of reduction.
The world's unbanked population shrank by 20 percent to 2 billion adults between 2011 and 2014, according to the World Bank, which has an ambitious goal for universal financial access by 2020. During this period India's unbanked population had fallen 25 percent.
It's important to note, however, that while the country is making headway in financial inclusion, usage rates of the bank accounts have plenty of room for improvement
As of August, 46 percent of newly opened accounts carried a zero balance, according to data on the PMJDY website.