Challenges in implementing Digital Banking Services in Rural Areas: A study in Indian Context

Abstract

Due to the rapid digitalisation of banking services, India has witnessed a financial inclusion revolution. Nevertheless, a myriad of intricate issues still plague the implementation of digital banking in rural areas. Finding out what stops rural areas of India from using digital banking services efficiently and widely is the main goal of this study. Despite legal reforms and physical advances brought about by initiatives like Jan Dhan Yojana and Digital India, a large portion of the rural population remains still neglected. Problems highlighted by the study include customers' unwillingness to shift, language barriers, restricted internet access, low levels of digital literacy, and distrust of digital platforms. The widespread use of digital banking methods is hindered by a number of problems, including socioeconomic inequality, limited mobile availability, and concerns about cyber security. Using qualitative and quantitative data gathered from rural communities, banking officials, and government publications, this study highlights the crucial necessity of a community-driven, all-encompassing strategy to close the digital gap between rural and urban regions. Among the suggestions is to broaden the reach by utilising local middlemen. The expansion of digital and financial education, the promotion of user-friendly banking interfaces in regional languages, the construction of digital infrastructure, and the expansion of digital education are further suggestions. Financial institutions and authorities in rural India may use the data to better understand how to create a digital banking environment that is accessible to everybody.