Only 27% Financially Literate in India Despite Digital Boom: VP Research Report

New Delhi, 11th August 2025: While digital transactions have surged in recent years, bringing banking and financial services to every corner of the country, India’s financial literacy rate remains worryingly low at just 27%, according to a report by VP Research Institute.

The study, titled “National Financial Literacy Strategy for India: 2025”, highlights that although 85% of Indians now hold bank accounts, many are either under-utilizing them or lack the knowledge to manage finances effectively. The report stresses the urgent need for a redesigned national financial literacy strategy.

Key findings from the report:
-Women often have bank accounts but lack decision-making authority over them.
-Certain states have high levels of indebtedness but low awareness of debt management.
-Digital transactions increased 40-fold between 2018 and 2023, yet public awareness of cyber fraud prevention remains minimal.

Financial literacy extends beyond knowing how to open an account- it includes secure UPI use, responsible borrowing, understanding insurance, and planning for retirement.

The research draws from four major national data sources: the National Financial Literacy and Inclusion Survey 2019, All India Debt and Investment Survey 2019, National Family Health Surveys 4 & 5, and the IMF’s Financial Access Survey 2018–2023. It also incorporates analysis of government scheme beneficiaries and international best practices.

Recommendations include:
Creating a new financial literacy policy.
Developing targeted literacy programs for women, farmers, gig workers, senior citizens, and students.
Integrating financial literacy into the National Education Policy.
Establishing financial literacy indices at the state and district levels.
Partnering with fintech companies, NGOs, and universities to expand financial awareness.

Currently, India has over 960 million bank accounts, 850 million debit cards, and conducts more than 80 billion digital transactions annually. Despite financial services becoming an integral part of daily life, a lack of financial knowledge increases the risk of loss.

“The time has come to shift to a new phase of financial literacy that empowers citizens to make informed decisions,” said Vaibhavi Pingale, Director of VP Research Institute.