After the demonetisation of Rs 500 and Rs 1000 notes, the country's banking system is going through the ultimate stress test. With long queues and bankers working overtime, the efficiency of the system is under the scanner. But if one looked at the numbers, India's network and distribution of bank branches is quite commendable. Here are some figures that will put things in perspective.

1. India has the highest number of bank branches in the world. According to IMF data for 2015 there are over 1.2 lakh bank branches in India, followed by China and Colombia with over 95,680 and 94,074 bank branches respectively. RBI data for the June 2016 quarter shows India now has over 1.3 lakh bank branches.

(Data: IMF)

2. There’s an almost even distribution of bank branches in rural and urban areas. The overall spread between the rural, semi-urban and the urban (including metropolitan) areas is fairly even. While over 38 per cent of all bank branches are concentrated in urban areas, nearly 34 per cent are in the rural areas, with the remaining in the semi-urban areas.

(Data: RBI, June 2016)

3. Of the 47,443 bank branches in the rural areas over 73 per cent is constituted by regional rural banks and nationalised banks. Both the SBI group, and nationalised banks have just over 30 per cent of their bank branches in rural areas, and over 40 per cent in urban areas. Private sector banks largely cater to the urban and semi-urban population with over 80 per cent bank branches concentrated in these areas.

(NB: Nationalised Banks, RRB: Regional Rural Banks, SFB: Small Finance Banks, LAB: Local Area Banks | Data: RBI)

4. Despite this feat, India has far fewer banks compared to its population size. There only 13.54 bank branches per 1 lakh adults. Colombia, with 257.69 bank branches per 1 lakh adults, tops this list. Among our neighbouring countries, Sri Lanka has better reach with nearly 18.58 bank branches per 1 lakh people. China, Pakistan and Nepal have around 8 bank branches per 1 lakh people, and Myanmar has the least with just 3.3. India has 42.54 bank branches per 1,000 sq km. China, given its vast geographical size, has just over 9.5 bank branches per 1,000 sq km.

5. While the proliferation of bank branches in rural and urban areas is almost equal, the number of branches per lakh adults in rural and semi-urban areas is far less. This is obviously because a majority of the country, more than 80 per cent, resides in the rural and semi-urban areas. According to a December 2015 RBI report, while there are 18.7 bank branches per 1 lakh adults in urban areas, there’s just 7.8 branches per 1 lakh adults in rural and semi-urban areas.

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Published on November 24, 2016