Influence of Digital Payments on Financial Inclusion in India: Evidence from Scheduled Commercial Banks

This study investigates the determinants of financial inclusion in India, focusing on the accessibility, availability, and affordability parameters associated with digital payment methods (NEFT, IMPS, Credit Cards, and Debit Cards) adopted by Scheduled Commercial Banks (SCBs) in India. Using secondary data from the Reserve Bank of India (RBI) for the period 2011 to 2021, the study employs Sarma’s (2008) Index of Financial Inclusion (IFI) to measure financial access. A linear regression analysis assesses the relationship between digital payment adoption and financial inclusion. The results reveal that NEFT transactions have a significant positive impact on the IFI, indicating that wider NEFT adoption enhances financial inclusion. These findings offer valuable insights for policymakers and banks, suggesting a focus on promoting NEFT usage to advance financial inclusion. This research contributes to the literature by providing empirical evidence on the role of digital payment systems in shaping financial inclusion within the Indian banking context.