Has Pradhan Mantri Jan Dhan Yojana Been A Success? What’s Stopping It?

Pradhan Mantri Jan Dhan Yojana has amassed a large base in 9 years. Some challenges need addressing and new updates to spark more success.

 objective of PMJDY

Pradhan Mantri Jan Dhan Yojana (PMJDY) is a national mission for financial inclusion. The objective of PMJDY is to bring banking and financial services closer to the uncatered masses. With 56% women account holders and 67% from rural and semi-urban areas, the PMJDY has been able to stay focused on the target segments. 

  • Since its launch in 2014, the PM Jan Dhan Yojana has added 50.7 crore beneficiaries

  • PMJDY accounts have more than Rs 2 lakh crore in deposits

  • Around 18-20% of PMJDY bank accounts are dormant, as of August 2023

Let us look into the nine years of PMJDY in a little more detail.

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Key PMJDY Benefits 

The aforementioned statistics could be achieved due to the key benefits that PMJDY has managed to deliver.

  • A PMJDY savings bank account has no minimum balance requirement. A minimum balance requirement is a major deterrent for account holders from low-income groups.

  • These accounts provide RuPay debit cards which has made the fund accessible and easy to withdraw.

  • Depending on the eligibility and track record, account holders can also avail of an overdraft facility of up to Rs 10,000.

  • Regular PMJDY account holders are also eligible for life and accident insurance coverages of Rs 30,000 and Rs 2 lakh, respectively.

Challenges Faced by PMJDY

The key challenges faced by this government scheme include,

  1. Duplicity – With the banks keen on increasing their PMJDY coverage, many people end up opening multiple PMJDY accounts. As a result, one or more of such account inevitably becomes dormant.

  2. Digital banking – Although the mission has a financial literacy programme as a part, the understanding of digital banking services has not yet reached many PMJDY account holders. This has resulted in low digital banking utilisation. 

Also Read: How To Enable Internet Banking and Mobile Banking On Your Post Office Savings Account?

  1. Debit cards – The number of accounts does not match the number of RuPay debit cards issued (16.27 crore debit cards issued against 28.5 crore accounts – August 2022). In the absence of a RuPay debit card, people are unable to use UPI.

  2. The burden of dormancy – For the banks, the rising number of dormant accounts also means more carrying costs per account.

New Hopes

To make PMJDY more inclusive, the government has added various experience-based updates to the mission. It has simplified the KYC process by introducing e-KYC and increased the interoperability of debit cards. The focus of the mission has shifted from every household to every unbanked adult. It is also increasing acceptance infrastructure across the county to promote RuPay debit card digital payments. All of these steps should give a fresh boost to the mission. 

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