‘Backwater towns’ part of India’s financial revolution now: FM

Finance Minister Nirmala Sitharaman, during the Global Fintech Fest 2023 in Mumbai today, says India is making sure that its financial ecosystem remains inclusive, and that total mutual fund assets of cities beyond the top 30 ones have grown from 15% to 26% in the past four years alone.

Not just the Tier-1 or the metropolitan cities, the fintech revolution has reached even the cities beyond the top-30 cities, the FM says during the event on 'Global Collaboration for a Responsible Financial Ecosystem: Inclusive, Resilient, and Sustainable'.

"The top 30 cities of India are usually expected to be ahead in formal savings. However, in the last four years, the share of cities (Tie-2 & Tier-3) beyond the top 30 cities in total mutual fund assets is estimated to have grown from 15% to 26%," Sitharaman says, adding that this revolution has now reached what one may otherwise call “backwater towns”.

"In a span of about four years, the number of demat accounts has increased by 2.5 times from 4.1 crore in 2019-20 to 10 crore in FY22-23. A record number of mutual funds accounts and SIPs were being registered, which helps in generating long-term wealth," the FM adds.

She says that the monthly flow in the MF industry through the route reached an all-time high of ₹15,245 crores in July 2023. Assets under management (AUMs) of the Indian mutual fund industry have grown tremendously in the last decade. It grew more than four-fold from Rs 10 lakh crore in May 2014 to a significant ₹46.37 lakh crore in July 2023, she stresses.

According to the FM, instruments like SIPs are only democratising this wealth-creation opportunity. She thinks the government's efforts in creating UPI democratised payments and an open network for digital commerce (ONDC) are now doing it for e-commerce. "Fintechs are driving more inclusion and creating their niche," the FM adds.

She says today fintech has become more robust and dynamic. “So interestingly, fintechs are driving more inclusion and are creating their niche. When we are talking about the financial ecosystem, there was a time when conventional financial activities were the backbone, but today, fintech has become a more robust financial inclusion tool," she says.

The FM also visited the stall at the Global Fintech Fest 2023 put up by the Sikkim government, which is presenting its green initiatives, including the flagship ‘Mero Rukh Mero Santati’ initiative (My Tree - My Progeny) and 'Sikkim Paryavaran Parva'.

The Union minister also took a look at the stalls put up by the Reserve Bank of India and the National Payments Corporation of India (NPCI). A conceptual model for blockchain-based community-led carbon credit framework finance titled 'Himalayan Eco-Chain Initiative' and a framework for evidence-based identification of DBT (Direct Benefit Transfer) beneficiaries using blockchain were presented at the exhibition.