Context:
More than one in every five accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY) had turned inoperative by December 2024, despite the finance ministry’s push to make them operational by fast-tracking the verification process, according to a government official. This translates into about 110 million inoperative accounts.
What is Pradhan Mantri Jan Dhan Yojana (PMJDY)?
Inoperative Accounts under Pradhan Mantri Jan Dhan Yojana PMJDY
- Current Figures
- As of December 2024 around 21 percentage of PMJDY accounts or over 110 million accounts were reported to be inoperative.
- What is Inoperative Account?
- The definition of an inoperative account is when there are no transactions from customers for 24 months on a consecutive basis.
- Top Banks with Inoperative Accounts
- Bank of Baroda has the highest number of inoperative accounts that is 29 million accounts.
- Punjab National Bank accounts hit 20 million inoperative accounts.
- State Bank of India and Bank of India hold a total of 18 million, and 126 million accounts that are inoperative.
Reasons for the inoperative account
- Largescale opening of accounts made many of them regular saving accounts.
- Lack of awareness
- The account holders do not know about the benefits of PMJDY due to which accounts are underutilized.
- Withdrawing
- Withdrawing the amount just after receiving the DBT. Just after the recipients get the DBT, the money is withdrawn, and the account becomes dormant.
Government and Bank Efforts
- The ministry of finance had sought the action from the PSBs to activate the dormant account in a move to improve financial inclusion.
- In August 2024, total deposits in PMJDY accounts stood at 231 trillion with an average balance of 4352 per account .
- Banks have also done well in opening new accounts under PMJDY with UCO Bank exceeding its FY25 target by 110.
- ReKYC Initiative
- In November 2024, M Nagaraju Secretary of the Department of Financial Services initiated a reKYC process for PMJDY account holders.
- ReKYC will use fingerprints facial recognition, and declarations to make the accounts valid forever.
- Banks were asked to repeat the success story of PMJDY launch and to make the reKYC process hassle free.
