Introduction
Launched on 28th August 2014, the Pradhan Mantri Jan-Dhan Yojana (PMJDY) by the Ministry of Finance is one of the globe’s most ambitious financial inclusion schemes. The scheme was conceptualized as a national mission to provide access to financial services like banking, savings, deposit accounts, remittance, credit, insurance, and pension in an affordable way to all unbanked families.
Ten years since its inception, PMJDY has emerged as a transformational platform for financial empowerment, digital inclusion, and the gateway to various social welfare initiatives via Direct Benefit Transfers (DBT). This blog explores the achievements, features, challenges, and the way forward for PMJDY in its decade-long journey.
What is PMJDY?
The Pradhan Mantri Jan-Dhan Yojana (PMJDY) is a financial inclusion scheme launched by the Government of India that allows anyone without a bank account to open a Basic Savings Bank Deposit (BSBD) account at a bank branch or from a Business Correspondent (Bank Mitra) facility.
Key Features of PMJDY
| Feature | Description |
|---|---|
| Zero Minimum Balance | No minimum balance to be maintained. |
| Free Debit Card | RuPay Debit Card offered to all account holders. |
| Accident Insurance | ₹1 lakh (increased to ₹2 lakh for accounts opened after 2018). |
| Overdraft Facility | ₹10,000 as an overdraft facility to eligible account holders. |
| DBT Eligibility | Enables benefits under schemes such as PMJJBY, PMSBY, APY, MUDRA. |
| Cheque Book | Not obligatory, can be given by banks at their own will. |
Achievements of PMJDY in 10 Years
1. Massive Account Expansion
PMJDY began with 147 million accounts in March 2015 and grew to a staggering 520 million accounts by March 2024, reflecting India’s efforts to bring its citizens under the formal financial fold.
2. Boost in Deposit Mobilisation
- In March 2015, deposits were worth ₹15,600 crore.
- As of March 2024, deposits increased to ₹2.32 trillion.
- This is a Compound Annual Growth Rate (CAGR) of 30%, as it points towards the growing confidence and financial prudence among account holders.
3. Increase in Average Balance
The average balance per account has risen almost four times:
- ₹1,065 in March 2015 → ₹4,476 in March 2024.
4. Growth of Banking Infrastructure
In order to provide banking reach, the Jan Dhan Darshak App has geospatially mapped:
- 1.3 million+ banking touch points, such as branches, ATMs, BCs, and IPPBs.
- 601,000 villages (as of July 2023), with 99.7% villages covered within a 5 km radius of a banking outlet.
5. Gender and Rural Inclusivity
PMJDY has facilitated financial empowerment of women and rural citizens:
- 55.6% (29.56 crore) of PMJDY accounts are held by women.
- 66.6% (35.37 crore) are in rural and semi-urban areas.
6. Boost to Digital Transactions
PMJDY accounts have been a major contributor to increased digital payment uptake:
- UPI transactions grew from 920 million (FY 2018) to 131.2 billion (FY 2024).
- RuPay card transactions at PoS/e-commerce grew from 670 million (FY 2018) to 1.26 billion (FY 2023).
7. Effective DBT Mechanism
More than USD 361 billion has been directly transferred to beneficiaries under 312 schemes of 53 central ministries, reducing leakages and ensuring timely benefits.
8. Relief in COVID-19 through PMJDY
During the pandemic, PMJDY accounts enabled:
- A one-time ex gratia payment of ₹500 per month for 3 months under PMGKY.
- Benefited 206.4 million women account holders, reflecting the scheme’s outreach and efficiency.
9. Facilitating Access to Credit
As of March 2024:
- 1,17,701 Overdraft (OD) accounts sanctioned.
- ₹190 crore sanctioned with 80.5% utilisation rate, providing credit to the most vulnerable sections.
10. Decline in Zero Balance Accounts
Even though they are zero-balance accounts, there are only 8.4% PMJDY accounts with zero balance now, reflecting higher usage of finances and mobilization of deposits.
11. Global Recognition
Complimented by the World Bank, PMJDY’s success is considered comparable to packing five decades of financial inclusion into six years, primarily thanks to the JAM trinity (Jan Dhan–Aadhaar–Mobile) and Digital Public Infrastructure (DPI).
Challenges Associated with PMJDY
As great as PMJDY has been, it encounters several challenges requiring policy and administrative intervention:
1. Multiple Account Opening
People tend to open multiple accounts in different banks to avail themselves of insurance, OD facilities, and other government programmes, resulting in duplication of data and inefficiencies of accounts.
2. Economic Burden on Banks
As multiple accounts have low or dormant balances, the maintenance cost of such accounts is an economic burden on banks.
3. Money Laundering Risk
There are concerns about use of Jan Dhan accounts by black money operators for money laundering—specially noticed in the post-demonetisation phase.
4. Overdraft Facility Not Uniform
Because provision of OD facility is at banks’ discretion, most eligible account holders are denied the facility, defeating the purpose of financial empowerment.
5. Misuse by Business Correspondents (BCs)
Reports are coming in about BCs levying unauthorized charges or delaying services, hence harassing poor beneficiaries.
6. Risk of Bad Loans
Overdrafts stand the risk of becoming bad loans because of absence of repayment channels, and past waivers of loans convince people that they are non-repayable subsidies.
7. Financial and Technological Illiteracy
A survey by Visa found that 65% of Indians are not financially literate, which points towards a large mismatch in the country’s ability to manage and put to effective use their financial assets.
Way Forward: Building PMJDY Stronger
To future-proof PMJDY and make it more inclusive, the following are a must:
1. Centralised Verification System
- Implement a strong biometric and digital verification to avoid duplicate accounts.
- Provide incentives to hold a single account with higher benefits or lower service charges.
2. National Strategy for Financial Inclusion (NSFI) 2025-30
- Integrate PMJDY further into the new NSFI, with priority on increasing social security awareness and take-up.
3. Insurance for All
- Prioritize covering PMJDY account holders under micro-insurance, rather than simply increasing account numbers.
4. Promote Micro-Credit and Micro-Investments
- Enhance access to flexi-recurring deposit products, micro-loans, and investment channels for low-income groups.
5. Boost Overdraft Account Usage
- Enhance penetration of OD accounts, making PMJDY a genuine instrument of credit empowerment and inclusive growth.
6. Target New Adult Entrants
- With the majority of the adult population already included, attention has to be now given to new adults in order to have uninterrupted generational financial inclusion.
Conclusion
The Pradhan Mantri Jan-Dhan Yojana is not only a financial program—it is a revolution that has transformed financial inclusion in India. During its ten-year journey, PMJDY has not only provided millions of Indians with bank accounts but also set the foundation for digital payments, DBT, and social welfare access.
Though there are implementation gaps and structural challenges, the future of PMJDY is to deepen its penetration, cover more insurance and credit, and cover financial literacy gaps. An inclusive, conscious, and digitally empowered India can really rise from the building blocks provided by this historic initiative.
