The Pradhan Mantri Jan Dhan Yojana (PMJDY), launched by the Government of India in August 2014, has become a landmark initiative in expanding financial inclusion. By mid-2025, it has opened over 520 million bank accounts, reducing the number of unbanked adults. This scheme has evolved from merely providing bank accounts to encouraging a digitally empowered and inclusive economy.
Vision Behind PMJDY
PMJDY was designed to tackle financial exclusion, especially among rural populations, women, and marginalised communities. The scheme offered zero-balance bank accounts, RuPay debit cards, insurance, and credit facilities. It aimed to reduce dependence on informal lenders and high-interest debt cycles. Linking bank accounts with Aadhaar and mobile numbers created the JAM Trinity, enabling direct benefit transfers and digital governance.
Expansion and Impact
By 2025, PMJDY accounts crossed 520 million with deposits over Rs 2.5 lakh crore. Women hold 56 per cent of these accounts, marking progress in gender inclusion. The scheme received global recognition, including from the World Bank and Guinness World Records. Integration with Aadhaar and UPI facilitated over 14 billion digital transactions in July 2025. This integration helped in efficient subsidy delivery and increased digital participation.
Challenges Faced
Despite impressive numbers, 15–20 per cent of accounts remain dormant. Many account holders still rely on cash and informal loans due to low financial literacy, irregular income, and limited banking access. Average balances are low, raising doubts about real savings growth. Usage varies widely, with urban and developed states showing better activity than rural and less developed regions. Updating KYC for accounts older than 10 years poses logistical challenges, especially in remote areas.
Future Directions
True financial inclusion requires active use of accounts for savings, credit, insurance, and investments. Formal credit access remains limited for small farmers and informal workers. Expanding financial literacy and digital awareness is critical. Rural areas face hurdles like poor connectivity, cyber risks, and low trust in digital platforms. Strengthening mobile banking and fintech solutions is vital. The government must ensure policy compliance does not exclude vulnerable populations.
Recent Initiatives
Recently, a nationwide saturation campaign was launched to boost PMJDY and related schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, and Atal Pension Yojana. Early results showed new account openings and enrolments. These efforts aim to deepen financial inclusion and build a resilient digital economy.
Questions for UPSC:
- Taking example of Pradhan Mantri Jan Dhan Yojana, discuss the role of financial inclusion in economic development and poverty alleviation.
- Examine the impact of digital financial services on rural India and how they can be improved to bridge the digital divide.
- Analyse the challenges faced in implementing large-scale social welfare schemes in India. How can administrative efficiency and beneficiary outreach be enhanced?
- Discuss in the light of India’s financial ecosystem, the importance of financial literacy and digital security for inclusive growth.
