Walk into any shop in Jammu city or Srinagar’s Lal Chowk and QR codes are pinned to every counter. Street vendors, pharmacists or even auto drivers, nearly all of them will gladly accept an online payment in place of a note. The numbers also seem to back this up. J&K Bank alone processed over 4 crore UPI transactions worth more than a staggering Rs 3,125 crore in just four days around Eid-ul- Fitr this year, with UPI emerging as the dominant mode by volume across all alternate channels.
Nationally, the story is as impressive: India crossed an all-time high of Rs 29.52 trillion in UPI transaction value in March 2026 with over 2,264 crore transactions processed in just one month.
These are extraordinary figures. But they are also, in important ways, misleading because they tell you almost nothing about what is happening in the remote villages of Doda, Rajouri, Kupwara or Kishtwar.
The truth is that digital banking in J&K follows a sharply uneven geography. Towns like Jammu,
Udhampur and Baramulla show real traction with QR codes and e-banking. The deeper you go into the rural and border areas, the more the picture seems to change. As per data, Mobile connectivity is available in nearly 94% of villages in J&K, still only 11.9% of rural households in the union territory commit to online shopping, compared to 32.4% of urban households. This gap is not just about infrastructure, It is about whether connectivity translates into actual use.
Among people aged 15 and above, 83.9% in rural J&K reported the ability to use mobile phones, but the government itself has observed that the actual usage varies greatly, particularly among older populations. Having a phone in your pocket and knowing how to send money through UPI are two different things and the region’s data reflects that gap starkly. Nationally, only 27% of rural users are considered digitally literate, creating real barriers to effective internet use and J7K is no better in this measure.
The Jan Dhan account is the formal entry point into this system for lakhs in rural J&K and on paper the coverage looks very good. Districts such as Jammu, Pulwama and Baramulla have emerged as top performers in financial inclusion schemes during financial year 2025-26, with notable progress under Pradhan Mantri Jan Dhan Yojana (PMJDY). Nationally, total PMJDY accounts reached 56.16 crore as of August 2025, with 66.7% of those accounts located in rural and semi-urban areas.
The scheme has extended the banking perimeter but account ownership and active digital participation have not risen proportionally. A Jan Dhan account opened to receive a government subsidy is not the same as a household confidently using UPI for daily transactions. A large share of these accounts remain dormant, used primarily to receive Direct Benefit Transfers. The account is a door but for many rural residents in J&K, it has not yet become a gateway.
What keeps people deprived of massive progress is a combination of things that rarely feature in official progress reports published by the government. Intermittent mobile data, power cuts in remote tehsils and towns, the near total absence of digital literacy programmes in local languages and a deep distrust of cash-less, UPI systems among older farming communities and daily wage workers all play a critical role. Across rural India as of early 2025, nearly half of households remain disconnected not because of the lack of infrastructure but because they simply do not know what the internet is or how to use it. In remote parts of J&K, hill districts with seasonal connectivity disruptions and communities with low literacy rates make this problem considerably worse.
Research across rural districts of Jammu Division including Ramban, Rajouri, Kathua and Kishtwar has identified a very poor digital infrastructure, internet connectivity problems and socio-economic barriers as the primary reasons behind low ICT adoption. These are the same districts where cash remains the only practical currency for most of the transactions. For people like an elderly widow collecting a pension, a labourer sending money home, a farmer buying inputs from a local dealer, the UPI revolution is still largely theoretical. The RBI’s Payment Infrastructure Development Fund has targeted tier-3 to tier-6 cities along with J&K specifically, catalysing the deployment of roughly 4.77 crore digital touchpoints as of May 2025, but hardware alone will not solve the human side of the problem.
The question J&K’s policymakers need to sit with and think is not whether UPI is growing rather who exactly is being left behind as it grows and whether the current speed of financial literacy outreach matches the ambition of the infrastructure rollout. J&K Bank’s managing director has spoken of speed fasting a shift toward a “full-fledged omni-channel, tech-enabled model” and the institution has rolled out tools from voice-activated payment pods to app-based KYC updates.
These are meaningful steps for urban account holders but for the shepherd in Gurez or the daily worker in Surankote, they are mere abstractions. Bridging this gap will require more than just fibre cables and new product launches. It will require sustained on-the-ground financial literacy work in Gojri, Kashmiri and Dogri among other regional languages. It will require bank correspondents who actually show up, listen and solve the issue and it will require an honest reckoning with the fact that the map of digital banking adoption in J&K looks far less complete than the transaction data uggests.
The writer is a student at the University of Kashmir. beighsadat01@gmail.com