PSBs unveil roadmap to bring India's youth into formal banking

PSBs chart roadmap to bring India's youth into formal banking system

New Delhi, August 19

According to data presented at the event, nearly two-thirds of young Indians live in rural areas, while only one in four earning youth currently hold salaried jobs. The presentation highlighted that 18-25-year-olds accounted for 66 per cent of the 22.7 billion UPI transactions recorded in June 2026, reflecting the segment's growing digital-first financial behaviour.

The gig workforce in India is also projected to grow significantly, increasing from 7.7 million in FY21 to 23.5 million by FY30, according to the data shared during the event.

Officials highlighted key challenges affecting deeper banking penetration among youth, including product-centric approaches instead of customer journey-based services, limited use of structured data, fragmented ecosystem integration and lengthy onboarding processes.

The presentation also pointed out challenges among young customers, including low financial literacy, limited credit history and increasing demographic pressure in urban areas.

PSBs outlined five key objectives, including transforming casual labourers, who constitute around 32 per cent of the youth workforce, into entrepreneurs and job creators; increasing youth participation in agriculture from 6 per cent to 10 per cent to support the government's goal of doubling farmers' income; raising the share of salaried youth from 25 per cent to 35 per cent; promoting financial awareness and discipline; and creating a dedicated PSB group in partnership with the My Bharat initiative to develop a detailed roadmap.

As part of the strategy, banks proposed life-stage banking products, greater use of Account Aggregator, GST, UPI and other alternative data sources for a unified customer profile, along with digital-first onboarding through e-KYC and video KYC.

The strategy also includes a dedicated push for start-ups and small enterprises through customised underwriting models.

For younger customers, PSBs will adopt a "Catch Them Young" approach aimed at building early banking relationships, providing platforms for training and experiential learning, and supporting entrepreneurship and employment opportunities, especially in rural areas.

The progress of the initiative will be monitored through parameters such as Account Aggregator consent rates, recovery of servicing costs through deposit float income, number of products offered per customer, and the reach of financial literacy and financial discipline programmes.

— ANI