Digital Banking and Its Impact on Financial Accessibility in India

Abstract

Digital banking—mobile and internet banking, UPI-based payments, Aadhaar-enabled services, and fintech-led onboarding—has reshaped financial accessibility in India by lowering transaction costs, expanding reach beyond physical branches, and enabling real-time, low-value payments at scale. This paper assesses how digital banking contributes to financial access across three dimensions: availability (reach and touchpoints), affordability (cost and convenience), and usage (regular adoption for payments, savings, and credit). Using official scheme and system indicators, we show that India has built a large base for access via financial inclusion (PMJDY) and rapid expansion of digital payments (UPI). Evidence indicates UPI transaction volumes rose from 92 crore (FY2017–18) to 13,116 crore (FY2023–24), while total digital payment transaction volume increased from 2,071 crore (FY2017–18) to 18,737 crore (FY2023–24). (Department of Financial Services) We also document enabling infrastructure: 57.52 crore PMJDY beneficiaries as of 28/01/2026, a large national internet subscriber base, and expanded payment touchpoints supported by policy initiatives like PIDF. (pmjdy.gov.in) The paper concludes that digital banking has materially improved day-to-day financial access, but persistent barriers—digital divide, capability gaps, fraud risks, and uneven rural infrastructure—still constrain equitable outcomes.