A change all of India is banking on

The Indian cabinet is offering its citizens zero-balance bank accounts. Will small change make a big impact?

Just a few years ago, a study by consulting firm PwC revealed that at least 233 million Indians had no access to basic banking services1 (meaning they had to stash their hard-earned savings in a biscuit tin). Recognising that financial inclusion could be the catalyst to improving livelihood and raising income, the Indian government launched a programme in 2014 that offered basic bank accounts with no minimum balance requirements. The response was astonishing: during the first week of the programme, a record-breaking 18,096,1302 formal bank accounts were set up.

Four years later, more than 300 million new customers — mostly in rural parts of India — have gained access to banking services such as loans and remittance. Meanwhile local Indian banks have also overseen the growth in quantity and value of mobile banking transactions, which include instant transactions made through text messages and online banking, by almost five times. As digitalised banking takes off, the massive influx of new customers offers banks a major growth opportunity.

Spurred by political will, creativity, innovation and desire for positive change, the changes in banking are empowering the underserved population of India on a massive scale and at a blistering pace. The resulting products and services not only better the lives of locals, they help break long-standing societal boundaries within the subcontinent, which can unlock the immense potential of the world’s seventh-largest economy (by GDP)3.

Selecting an investment manager with local insights and an expert understanding of the market is crucial. Eastspring Investments’ in-depth knowledge of India can help you uncover its wealth of investment opportunities.

Sources:
1 https://timesofindia.indiatimes.com/business/india-business/40-of-India-is-unbanked-hurting-the-most-Exchange-Of-Currency-Permitted-Only-Once-Till-RBI-Review/articleshow/55392031.cms
2 https://www.ibm.com/blogs/insights-on-business/banking/india-banking-digital-reinvention/
3 https://www.weforum.org/agenda/2017/03/worlds-biggest-economies-in-2017/

This document is produced by Eastspring Investments (Singapore) Limited and issued in:

Singapore and Australia (for wholesale clients only) by Eastspring Investments (Singapore) Limited (UEN: 199407631H), which is incorporated in Singapore, is exempt from the requirement to hold an Australian financial services licence and is licensed and regulated by the Monetary Authority of Singapore under Singapore laws which differ from Australian laws.

Hong Kong by Eastspring Investments (Hong Kong) Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong.


Indonesia by PT Eastspring Investments Indonesia, an investment manager that is licensed, registered and supervised by the Indonesia Financial Services Authority (OJK).


Malaysia by Eastspring Investments Berhad (531241-U).


This document is produced by Eastspring Investments (Singapore) Limited and issued in Thailand by TMB Asset Management Co., Ltd. Investment contains certain risks; investors are advised to carefully study the related information before investing. The past performance of any the fund is not indicative of future performance.


United States of America (for institutional clients only) by Eastspring Investments (Singapore) Limited (UEN: 199407631H), which is incorporated in Singapore and is registered with the U.S Securities and Exchange Commission as a registered investment adviser.


European Economic Area (for professional clients only) and Switzerland (for qualified investors only) by Eastspring Investments (Luxembourg) S.A., 26, Boulevard Royal, 2449 Luxembourg, Grand-Duchy of Luxembourg, registered with the Registre de Commerce et des Sociétés (Luxembourg), Register No B 173737.


United Kingdom (for professional clients only) by Eastspring Investments (Luxembourg) S.A. - UK Branch, 10 Lower Thames Street, London EC3R 6AF.


Chile (for institutional clients only) by Eastspring Investments (Singapore) Limited (UEN: 199407631H), which is incorporated in Singapore and is licensed and regulated by the Monetary Authority of Singapore under Singapore laws which differ from Chilean laws.


The afore-mentioned entities are hereinafter collectively referred to as Eastspring Investments.


The views and opinions contained herein are those of the author on this page, and may not necessarily represent views expressed or reflected in other Eastspring Investments’ communications. This document is solely for information purposes and does not have any regard to the specific investment objective, financial situation and/or particular needs of any specific persons who may receive this document. This document is not intended as an offer, a solicitation of offer or a recommendation, to deal in shares of securities or any financial instruments. It may not be published, circulated, reproduced or distributed without the prior written consent of Eastspring Investments. Reliance upon information in this posting is at the sole discretion of the reader. Please consult your own professional adviser before investing.


Investment involves risk. Past performance and the predictions, projections, or forecasts on the economy, securities markets or the economic trends of the markets are not necessarily indicative of the future or likely performance of Eastspring Investments or any of the funds managed by Eastspring Investments.


Information herein is believed to be reliable at time of publication. Data from third party sources may have been used in the preparation of this material and Eastspring Investments has not independently verified, validated or audited such data. Where lawfully permitted, Eastspring Investments does not warrant its completeness or accuracy and is not responsible for error of facts or opinion nor shall be liable for damages arising out of any person’s reliance upon this information. Any opinion or estimate contained in this document may subject to change without notice.


Eastspring Investments (excluding JV companies) companies are ultimately wholly-owned/indirect subsidiaries/associate of Prudential plc of the United Kingdom. Eastspring Investments companies (including JV’s) and Prudential plc are not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America or with the Prudential Assurance Company, a subsidiary of M&G plc (a company incorporated in the United Kingdom).