India's digital payments revolution and expanding access to banking services have transformed the country's financial landscape over the past decade, but a significant gap remains in meaningful financial inclusion, with nearly one in every six bank accounts lying inactive, according to Deloitte India's latest State of Financial Services in India 2026 report.

The report noted that while headline indicators point to considerable progress, a large section of the population remains outside the formal financial ecosystem in terms of active participation and access to credit. Around 16% of bank accounts in India are inactive, a figure that is four times the global norm for comparable economies.

Digital payments

The findings come at a time when India has emerged as a global leader in digital payments. The Unified Payments Interface (UPI) now processes more than 20 billion transactions every month and accounted for nearly half of global real-time payment transaction volumes in 2024, according to the report. The International Monetary Fund has recognised UPI as the world's largest retail fast payment system by transaction volume.

India has also made remarkable strides in expanding access to formal banking. About 89% of adults now have a financial account, and the Reserve Bank of India's Financial Inclusion Index has risen to 67 from 53.9 in 2021.

However, Deloitte cautioned that access alone does not translate into deeper financial participation.

Access to formal credit

Only 15% of adults in India currently have access to formal credit, well below the global average of 24%. The situation is more pronounced among micro, small and medium enterprises (MSMEs), with just 14% having access to institutional finance, leaving the majority dependent on informal sources of borrowing. Insurance penetration, at 3.7% of GDP, is also only half the global average.

According to the report, these shortcomings are not marginal but represent structural challenges that need urgent attention if India is to sustain high economic growth and achieve its long-term development ambitions.

Financial inclusion

India is targeting a $30-35 trillion economy by 2047, and Deloitte believes that meaningful financial inclusion will be critical to achieving that objective. Wider participation by households and MSMEs, higher insurance and investment penetration and stronger market-wide systems will be central to the next phase of growth, the report said.

The consulting firm argued that the financial services sector has expanded substantially over the last two decades, with the market capitalisation of listed banking, financial services and insurance companies rising from around ₹1.8 lakh crore in 2005 to ₹90.7 lakh crore in 2025. The sector's share in GDP has increased from about 6% to nearly 27% over the same period.

Despite these gains, Deloitte said the focus must now shift from expanding access to ensuring active usage, deeper credit penetration and stronger financial participation.

"India's financial services sector needs a bold leap out of legacy across technology, customer experience standards, market infrastructure and policy frameworks," said Vijay Mani, Partner and Banking and Capital Markets Leader at Deloitte India.

Published on: Jun 17, 2026 1:32 PM IST