Wednesday, 09 Oct, 2024
By: Yash Gupte
As of August 9, 2023, there are 500 million Jan-Dhan accounts, according to the most recent figures provided by the banks. Image Source: IANS
Out of the total PMJDY bank accounts, 56 percent belong to women and 67 percent of these accounts were opened in rural and semi-urban areas.
Prime Minister Narendra Modi said that it is a significant milestone as the number of bank accounts opened through the Pradhan Mantri Jan-Dhan Yojana (PMJDY)-Narendra Modi government’s flagship scheme for financial inclusion has crossed the mark of 500 million. Out of the total PMJDY bank accounts, 56 percent belong to women and 67 percent of these accounts were opened in rural and semi-urban areas. According to the Ministry of Finance, the national mission on financial inclusion has been running for over nine years. As of August 9, 2023, there are 500 million Jan-Dhan accounts, according to the most recent figures provided by the banks.
Jan Dhan Yojana was announced by Prime Minister Narendra Modi in his Independence Day address in 2014 with an aim of financial inclusion and it was launched on August 28, 2014. While launching the programme, the Prime Minister had described the occasion as a festival to celebrate the liberation of the poor from a vicious cycle. Also, the scheme completed eight years in 2022. On the occasion of the 8th Anniversary of PMJDY, Union Finance Minister Nirmala Sitharaman in her message said that, “Financial inclusion is a major step towards inclusive growth which ensures the overall economic development of the marginalized sections of the society. The success of the PMJDY since August 28, 2014 is reflected in terms of opening of over 50 crore bank accounts with deposit balance of Rs 2.03 lakh crore with its expanded coverage to 67 percent rural or semi-urban areas as well as 56 percent of women Jan Dhan account holders.
Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/Savings & Deposit Accounts, Remittance, Credit, Insurance, and Pension in an affordable manner. It ensures access of financial products & services at an affordable cost and use of technology to lower cost & widen reach. The basic features of the scheme include- opening of basic savings bank deposit (BSBD) account with minimum paperwork, relaxed Know your customer (KYC), e-KYC, account opening in camp mode, zero balance & zero charges. It also includes issuance of Indigenous Debit cards for cash withdrawals & payments at merchant locations, with free accident insurance coverage of Rs. 2 lakh and other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit.
The PMJDY was scheduled to end in August 2018 but taking in to consideration the progress made under the scheme and financial inclusion of the marginalized and upliftment of the vulnerable sections of the society like women living in rural areas, the government decided to extend the scheme further with some modifications. The goal of financial inclusion was shifted from ‘Every Household’ to ‘Every Unbanked Adult’ under the new version of the scheme. Regarding the RuPay card insurance, free accidental insurance cover was increased from Rs. 1 lakh to Rs. 2 lakh for PMJDY accounts opened after 28th August 2018. The overdraft limit was also doubled from Rs. 5000 to Rs. 10,000 and the upper age limit under the scheme was also increased from 60 to 65 years.
The chart below shows the number of PMJDY accounts opened from August 2015 to August 2023.
Source: Ministry of Finance
As of August 2023, around 50.14 crore Jan Dhan accounts have been opened. Out of the total account holders, 56 percent (27.78 crore) are women and 67 percent (33.40 crore) Jan Dhan accounts are in rural and semi-urban areas. PMJDY Accounts have grown more than three-fold from 17.9 crore in August 2015 to 50.14 crore as of August 2023. As per the guidelines of RBI, a PMJDY account is treated as inoperative if there are no customer induced transactions in the account for over a period of two years.
One of the other effective steps taken by the government for the successful implementation of the PMJDY was the launching of Jan Dhan Darshak mobile app to provide a citizen centric platform for locating banking touch points such as bank branches, ATMs, Bank Mitras, Post Offices, etc. in the country.
In order to promote financial inclusion and direct benefit transfers, JAM Yojana was introduced by the government. The Jan Dhan-Aadhaar-Mobile (or JAM) trinity is a Government of India initiative to integrate Indians' Jan Dhan accounts, mobile numbers, and Aadhaar cards to stop government subsidy leaks. The Jan Dhan Yojana's basic savings accounts, Aadhaar's unique biometric identification, and the nation's rapidly rising mobile penetration are the JAM Yojana's main building blocks. The Aadhaar number identifies people who are eligible for certain government programmes and uses biometrics to verify their identification. Direct transfers from the government are made to citizens' Jan Dhan Accounts, which are simple savings accounts with no balance. Following the successful distribution of the welfare payment, a high mobile ownership rate ensures outreach and communication to the populace.
The true potential of the system was first recognized on a national scale during the Covid-19 pandemic, when the government used JAM Trinity to transfer monetary relief straight to the accounts of the intended beneficiaries with almost any movement of people or goods. The widespread use of mobile phones in Indian society has made the JAM trinity more powerful and has provided a universal access. The biometric identification-based benefit transfer virtually eliminates corruption, thanks to the Aadhaar card. The JAM trinity has played a significant role in making a ‘digital India.’
According to the economic survey 2022-23, the JAM (Jan Dhan-Aadhaar-Mobile) trinity seeds, which were planted in FY15 and allowed India to create COVID-19 vaccination digital infrastructure Co-WIN in a time-bound way, ended up saving the country.
The initial Jan Dhan account offer included a RuPay debit card, as well as government-provided pension and insurance plans.
Source: Ministry of Finance
Around 33.95 crore RuPay debit cards were issued to the account holders under PMJDY. The total number of digital transactions increased from 978 crore in FY 2016–17 to 7,195 crore in FY 2021–22 as a result of the issuance of over 31.94 crore RuPay debit cards under PMJDY, the installation of 61.69 lakh point of sale/mobile point of sale (PoS)/ (mPoS) machines as of June'22, and the introduction of mobile-based payment systems like UPI. Total number of RuPay card transactions at PoS and E-commerce have increased from 28.28 crore in FY 2016-17 to 151.64 crore in FY 2021-22.
PMJDY has immensely contributed in financial inclusion of a huge chunk of the population in India and has also contributed in the digitalization of the economy. More such targeted schemes can bring major changes in enhancing the financial literacy and financial inclusion. An important aspect of the scheme is that the direct bank transfers (DBTs) via PM Jan Dhan accounts have ensured that every rupee reaches its intended beneficiary, preventing systemic leakage.
