The Pradhan Mantri Jan Dhan Yojana (PMJDY) has transformed financial inclusion in India since its launch in 2014. It aimed to provide universal access to banking services, especially for marginalised groups. Over 11 years, the scheme has expanded banking access, digital transactions, and social security coverage.
Universal Banking Access
Before PMJDY, only 59% of households and 35% of adults had bank accounts. Today, nearly 100% of households and over 90% of adults possess bank accounts. Over 56.2 crore accounts were opened, with 37.5 crore in rural and semi-urban areas. Women hold 56% of these accounts, denoting gender inclusion. Banking outlets now exist within five kilometres of 99.9% of inhabited villages.
Financial Empowerment and Poverty Reduction
PMJDY replaced informal credit systems that trapped the poor in debt cycles. The scheme facilitated direct benefit transfers (DBT) to beneficiaries, reducing intermediaries and leakages. During demonetisation and the COVID-19 crisis, PMJDY accounts enabled swift financial aid to vulnerable populations.
Digital Transactions and RuPay Cards
The scheme promoted digital payments through over 38.7 crore RuPay cards issued. PMJDY accounts support savings, micro-insurance, and investment products. The growth of Unified Payments Interface (UPI) and digital transactions links closely to the expansion of PMJDY accounts.
Social Security Coverage
PMJDY helped extend life and accident insurance under the Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana. Millions in the unorganised sector now access financial protection. The total balance in PMJDY accounts grew 17-fold to Rs 2.68 lakh crore, reflecting increased financial security.
Banking Infrastructure and Innovation
Over 16.2 lakh bank mitras (business correspondents) deliver services in remote areas. Artificial intelligence and natural language processing are being explored for voice-based transactions to bridge digital divides. This supports e-commerce growth in Tier 4 and Tier 5 towns.
Future Focus and Sustainability
As PMJDY enters its 12th year, efforts focus on maintaining account activity, updating KYC details, and promoting micro-insurance and pension schemes. The government has launched a financial inclusion saturation drive to deepen impact and expand services.
Questions for UPSC:
- Discuss in the light of India’s socio-economic landscape how financial inclusion can reduce poverty and promote gender equality.
- Critically examine the role of digital payment systems like Unified Payments Interface (UPI) in transforming rural economies and financial inclusion.
- Explain the challenges and opportunities in extending social security schemes to the unorganised sector workforce in India.
- With suitable examples, discuss the impact of technology such as artificial intelligence and natural language processing on enhancing banking services in remote areas.
