DIGITAL BANKING AND SOCIAL DISPARITIES: AN EMPIRICAL STUDY FROM KOLHAPUR DISTRICT

This research paper explores the impact of online banking on social discrimination in Kolhapur district, Maharashtra, focusing on caste, gender, age, and rural-urban divides. As India pushes toward a cashless economy and digital financial inclusion, it is critical to examine whether digital banking narrows or widens existing social inequalities in semi-urban and rural regions. The study employs a mixed-methods approach, combining quantitative data from 400 respondents across various social groups with qualitative insights from focus group discussions. Findings reveal that while nearly all respondents possess bank accounts—largely due to government schemes like the Pradhan Mantri Jan Dhan Yojana (PMJDY)—there is a significant disparity in the usage of online banking services. Only 40% of Scheduled Caste and Scheduled Tribe (SC/ST) respondents and 36% of women reported using mobile or internet banking, compared to 80% among general caste respondents. Digital literacy, smartphone ownership, and educational background emerged as key factors influencing digital banking adoption. Elderly and female respondents reported higher dependence on Customer Service Points (CSPs) and Aadhaar-enabled Payment Systems (AePS), often facing issues such as biometric failures, lack of grievance redressal, and language barriers. Regression analysis confirmed that caste, gender, and age negatively influence online banking adoption, while digital literacy and education have a positive and significant effect. Although some respondents acknowledged that digital banking reduces face-to-face caste-based discrimination at bank counters, others highlighted new forms of exclusion linked to technology and access. The study concludes that while online banking holds promise as a tool for financial and social inclusion, its benefits are unevenly distributed. Targeted interventions—such as digital literacy programs, vernacular app development, and infrastructure improvements—are essential to ensure equitable access. Without addressing these gaps, the digital divide may inadvertently reinforce the very social inequalities it aims to eliminate.