Financial Inclusion and Household Savings Behaviour in Semi-Urban India (International Journal of Advanced Research)

Summary

• Semi-urban centres held 46,475 of India's 1,64,310 bank branches (28.3%) in March 2025.p.1
• NABARD's NAFIS found the share of households that saved rose from 50.6% in 2016–17 to 66% in 2021–22.p.1
• Average annual financial savings rose from ₹9,104 to ₹13,209 per household.p.1
• Insurance coverage jumped from 25.5% to 80.3% of households.p.1
• Household wealth remains dominated by physical assets: 77% real estate and 11% gold, against 5% financial assets.p.1
• The RBI Financial Inclusion Index rose to 70.0 in March 2026 from 67.0 a year earlier, mainly because of higher usage.p.4
• About 16% of Indian account owners have no active account, compared with an average of 4% in other low- and middle-income economies.p.4

Key insights

1. Most of the 59.09 crore Jan Dhan accounts are in rural and semi-urban areas (77.8% in the two combined).p.1
2. The share of households in debt also rose, from 47.4% to 52.0% in NAFIS.p.4
3. Average savings grew about 45% in nominal terms while income grew 57.6% and spending 69.5%.p.4
4. Households with at least one member receiving a pension rose from 18.9% to 23.5%.p.4
5. PMJDY deposits rose to ₹3.17 lakh crore by August 2026, with an average balance of ₹5,356, showing accounts used as stores of value.p.5
6. Financial literacy rose from 33.9% to 51.3% of NAFIS respondents, and is seen as the weakest link for moving households into higher-return products.p.6
7. The paper finds inclusion raises the incidence and level of saving, but its effect on the composition of savings depends on literacy, trust and product design.p.7