Eastern and Southern States such as Manipur and Telangana lead the way in internet banking, although mobile banking now seems to be the preferred mode among digitally-active users.

In Telangana, 21.7 per cent of the total active savings banks accounts carried out at least one financial transaction through internet banking in the last six months of 2017-18, according to the annual FIBAC productivity report on Indian Banking Industry 2018 by the Boston Consulting Group, FICCI and Indian Banks’ Association.

Similarly, 21.4 per cent of the total active savings banks accounts in Manipur carried out at least one transaction through internet banking against the national average of 11.3 per cent. Mizoram (20.4 per cent), Andhra Pradesh (18.2 per cent) and Puducherry (16.4 per cent) make up the other top three States that are high on using internet banking services.

“The rising smartphone and internet penetration, combined with the rising ‘e-literacy’, has set the tone for India to move from branch banking to electronic banking channels, such as mobile banking and internet banking,” the report noted.

Transactions through these digital channels have grown by 48 per cent in 2016-17, while branch-based and ATM transactions have witnessed degrowth of 11 and 5 per cent, respectively.

The report also noted that there now seems to be a shift in preference from internet banking to mobile banking for digital customers across bank categories. In private banks, 21 per cent of all active savings bank accounts had mobile banking activation in 2017-18, while for PSBs, it was still minuscule at 3 per cent.

The report also noted that the MSME segment has a huge untapped potential for credit and digital lending to the sector, and could become a ₹15-lakh crore opportunity for lenders over the next five years.

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