The Pradhan Mantri Jan Dhan Yojana (PMJDY), a national mission for financial inclusion, marks eight years of successful implementation. The initiative has banked over 46.25 crore beneficiaries since inception, amounting to Rs. 1,73,954 crores.
Understanding Pradhan Mantri Jan Dhan Yojana (PMJDY)
PMJDY is more than just a financial inclusion scheme. It serves as the groundwork for people-centric economic initiatives, offering access to necessary financial services like banking, savings and deposit accounts, remittance, credit, insurance, and pension at an affordable cost. With comprehensive coverage almost completed, PMJDY’s role is significant in various initiatives like Direct Benefit Transfer (DBT), Covid-19 financial assistance, and PM-KISAN, among others.
Under PMJDY, secure banking with minimal paperwork, e-KYC, and zero balance and charges have been introduced. It also provides indigenous debit cards for cash withdrawals and payments at merchant locations, alongside free accident insurance coverage of Rs. 2 lakhs.
Concept of Financial Inclusion
Financial inclusion is about ensuring vulnerable groups have access to timely, affordable financial services and credit. In India’s diverse society, financial inclusion forms an essential part of the development process. A transaction account serves as the first step towards broader financial inclusion, allowing people to store money and make and receive payments.
National Initiatives Boosting Financial Inclusion
India is working towards increasing financial inclusion with other initiatives such as the Digital Identity (Aadhaar), National Centre for Financial Education (NCFE), Centre for Financial Literacy (CFL) Project, and Promotion of Digital Payments.
Key Pillars of PMJDY
PMJDY’s six pillars include universal access to banking services, overdraft facilities, financial literacy programs, creation of credit guarantee funds, insurance, and a pension scheme for the unorganized sector. An emphasis on digital banking ensures that the accounts opened are online and integrated into the core banking system.
Achievements of the Scheme
The shift from ‘Every Household’ to ‘Every Unbanked Adult’ highlights the scheme’s inclusiveness. The extension of PMJDY has introduced new features like RuPay card insurance, enabling interoperability and enhancement in overdraft facilities. Mobile application ‘Jan Dhan Darshak App’ provides platform for locating banking touch points across the country.
The PMJDY has improved financial inclusion, as evidenced during the Covid-19 lockdown when more than 20 crore women PMJDY accounts were credited with ex-gratia. As on 10th August 2022, PMJDY accounts have surged three-fold from 14.72 crore in March 2015 to 46.25 crore. In August 2022, 81.2% of the total 46.25 crore PMJDY accounts were operative.
Deposits have grown about 7.60 times with an increase in accounts 2.58 times from August 2015 to August 2022. The system formalizes the financial system, prevents leakage, ensures smooth DBT transactions, and promotes digital transactions.
Way Forward
Moving forward, PMJDY account holders need to be covered under microinsurance schemes. Promotion of digital payments and enhancing access to micro-credit and micro-investment such as flexi-recurring deposits are essential. The scheme is designed to promote financial inclusion by providing a basic bank account to every household, thus ensuring a comprehensive financial inclusion of all households in India.
Last Modified: February 18, 2024