India’s financial inclusion journey has entered a new phase, driven not only by government policies but also by Artificial Intelligence (AI), digital identity systems, and real-time data technology. The combination of Digital Public Infrastructure (DPI) and AI is helping remove long-standing barriers to financial services and bringing millions of unbanked people, small businesses, and rural communities into the formal economy.
What started as an effort to provide basic banking services to underserved people has now become a large technology-based financial ecosystem. Today, intelligent and personalised financial services can be delivered quickly and at scale. For people who are “new-to-credit”, including Micro, Small and Medium Enterprises (MSMEs), informal workers, rural populations, and women-led businesses, this change is transformational and long-term.
The Digital Foundation: Building Blocks of a Financially Inclusive India
At the centre of India’s financial inclusion growth are three connected digital systems that together create a strong national infrastructure for identity verification, digital payments, and welfare distribution.
The JAM Trinity: Jan Dhan-Aadhaar-Mobile
The JAM Trinity combines universal bank accounts, biometric identity, and mobile connectivity to make financial services accessible to everyone, regardless of location. The impact has been significant:
- More than 144 crore Aadhaar numbers had been generated by March 2026, allowing secure digital identity verification across the country.
- Jan Dhan bank accounts increased from 14.72 crore in 2015 to 58.16 crore as of April 29, 2026. Total deposits in these accounts reached ₹3.02 lakh crore, helping millions of previously unbanked people join the formal banking system.
- Mobile connectivity has also expanded rapidly, with 125.87 crore wireless subscribers and 5G coverage across 99.9% of India’s districts, helping extend digital services to remote areas.
UPI: The World’s Most Ambitious Payment Rail
The Unified Payments Interface (UPI) has changed how digital payments work in India. It allows users to instantly transfer money between bank accounts using mobile phones.
In March 2026 alone, UPI processed around ₹29.53 lakh crore through 2,264 crore transactions. With 691 banks connected to the platform, UPI now handles nearly 81% of India’s total retail payment volume, supporting both personal and merchant payments. UPI is no longer just a payment platform; it has become the foundation of India’s growing digital financial economy.
Direct Benefit Transfer: Eliminating Leakage, Empowering Citizens
The Direct Benefit Transfer (DBT) system has improved the delivery of government subsidies and welfare payments by sending money directly into verified bank accounts. This has reduced the role of middlemen and removed duplicate beneficiaries.
As of January 2026, the DBT system had transferred ₹49.09 lakh crore directly to citizens and helped the government save around ₹4.31 lakh crore by removing fake and duplicate beneficiaries.
Together, these systems have created a strong digital ecosystem that not only supports financial inclusion but also provides the data and infrastructure needed for AI-driven financial innovation.
Also Read: India’s MSME Sector Gets Major Boost Through Credit, Digital Platforms and Rural Support
The Policy Ecosystem: Enabling Responsible AI in Finance
A strong digital foundation alone is not enough. India’s use of AI in finance is also supported by regulatory reforms, cooperation between institutions, and financial literacy initiatives to ensure technology remains safe, inclusive, and secure.
Banking BHASHINI: Breaking Language Barriers in Finance
India has 22 scheduled languages and hundreds of dialects, which have often made access to financial services difficult for many citizens.
In February 2026, the Digital India BHASHINI Division (DIBD) and the Reserve Bank of India (RBI) signed an important agreement to integrate BHASHINI’s multilingual AI technology into banking and financial services.
Under this partnership, a specialised language model called “Banking BHASHINI” will be developed using banking terms, regulatory guidelines, and finance-related applications. Data for these AI systems is collected through the BhashaDaan initiative, where citizens contribute speech, text, and translations to improve language accuracy.
BHASHINI currently supports more than 36 languages, 23 language services, and over 350 AI models. The platform has crossed 1.2 million mobile app downloads and completed more than 5 billion inferencing operations. Its goal is to ensure that every citizen can access financial services in their preferred language.
RBI Regulatory Sandbox: Incubating Innovation Responsibly
The RBI’s Regulatory Sandbox (RS) framework provides a controlled environment where banks and fintech companies can test new products and services under the supervision of regulators before launching them widely.
Based on recommendations from the FinTech Working Group, the sandbox helps regulators evaluate the risks and benefits of technologies such as API-based services, digital KYC, and cybersecurity tools, while protecting consumers and maintaining financial stability.
MuleHunter.AI: AI on the Frontlines of Cybercrime
Launched in December 2024 by the Reserve Bank Innovation Hub (RBIH), MuleHunter.AI is an AI and machine learning-based tool developed to fight financial cybercrime.
Unlike traditional rule-based systems, MuleHunter.AI studies transaction patterns in real time to identify suspicious activities linked to money laundering or illegal betting using “mule” accounts. Pilot projects with major public sector banks showed positive results, and the RBI is encouraging more banks to adopt the technology.
Mission Digital ShramSetu: Finance for the Informal Workforce
Launched in October 2025, Mission Digital ShramSetu focuses on India’s 490 million informal workers, one of the largest underserved workforce groups in the world.
The initiative uses AI, blockchain, and digital learning technologies to address challenges such as financial insecurity, lack of market access, and absence of formal skill recognition. Through digital platforms for social protection and skill verification, the mission aims to make informal workers an important part of India’s Viksit Bharat 2047 vision.
AI-Based Credit Scoring: Unlocking Formal Finance for the Underserved
One of the biggest areas where AI is creating change is credit assessment. Traditionally, many MSMEs, informal workers, and first-time borrowers struggled to access formal loans because they did not have credit histories.
AI-based credit scoring models are solving this problem by using alternative data such as digital payment history, GST filings, bank statements, and utility bill payments to assess borrower risk without relying only on traditional credit scores. This approach could help close a credit gap worth an estimated USD 130-170 billion and reduce the dependence of MSMEs on informal lenders.
The Unified Lending Interface (ULI)
A major part of this transformation is the Unified Lending Interface (ULI), a Digital Public Infrastructure initiative designed to make credit access easier and faster.
ULI works as an API-based framework that connects lenders with data providers. It allows financial institutions to access land records, satellite images, authentication systems, and both financial and non-financial data for better credit assessment.
By December 2025, 64 lenders, including 41 banks and 23 NBFCs, had joined the ULI platform, using more than 136 data services across 12 different loan journeys. The platform is also being expanded to Regional Rural Banks (RRBs) and District Central Co-operative Banks (DCCBs) to improve credit access in rural and semi-urban areas.
The Account Aggregator Framework: Consent-Based Data for Credit
The Account Aggregator (AA) framework, introduced by the RBI, is a secure system that allows individuals to share their financial data with service providers after giving consent. Account Aggregators are NBFCs that help users combine and share information related to bank accounts, investments, loans, and insurance for services such as loan applications or financial planning.
The framework has grown rapidly. As of December 31, 2025, more than 2.6 billion accounts were enabled for data sharing, while 252.9 million users had linked their accounts. Seventeen companies have received RBI approval to operate as Account Aggregators across banking, insurance, pension, and securities sectors. The AA framework is strengthening India’s digital credit infrastructure and improving the efficiency of AI-based lending systems.
Towards an Intelligent, Inclusive Financial Future
India’s financial inclusion journey is no longer only about increasing access to banking services; it is now about building an intelligent and AI-driven financial ecosystem at a massive scale. The combination of strong digital infrastructure, progressive regulations, and advanced AI technologies is helping create a financial system that is more transparent, efficient, and inclusive.
From the JAM Trinity’s identity infrastructure to BHASHINI’s multilingual AI systems, from ULI’s alternative credit models to the Account Aggregator framework’s consent-based data sharing, every part of this ecosystem is designed to support underserved communities.
As India moves closer to its Viksit Bharat 2047 vision, AI-led financial inclusion is becoming one of the country’s most important policy initiatives, with the potential to reshape financial access and improve the lives of billions of people.
Source: PIB
