Pradhan Mantri Jan Dhan Yojana (PMJDY) completes 10 years
Context
The Pradhan Mantri Jan Dhan Yojana (PMJDY), launched on 28th August 2014, has completed a decade of successful implementation.
- As the largest financial inclusion initiative globally, PMJDY has played a critical role in integrating marginalized and economically backward sections of society into the formal banking system.
- This mission-mode scheme has transformed the financial landscape in India, contributing significantly to the government’s efforts to ensure universal and affordable access to financial services.
Relevance:
GS-02 (Government policies and interventions)
Key Highlights
- Massive Coverage: Since its inception, PMJDY has brought over 53.14 crore beneficiaries into the formal banking system, with 55.6% of accounts held by women and 66.6% in rural and semi-urban areas.
- Substantial Deposits: The total deposit balance in PMJDY accounts has grown to ₹2.31 lakh crore, reflecting a 15-fold increase since 2015. The average deposit per account stands at ₹4,352, a fourfold increase, indicating a rising habit of saving among account holders.
- RuPay Card Issuance: A total of 36.14 crore RuPay debit cards have been issued to PMJDY account holders, offering a ₹2 lakh accident insurance cover. These cards have facilitated a significant increase in digital transactions across the country.
- Digital Financial Inclusion: The JAM trinity (Jan Dhan-Aadhaar-Mobile) has enabled swift, transparent, and diversion-proof subsidy transfers directly into beneficiaries’ accounts. The rise in digital transactions, including UPI and RuPay card transactions, highlights the scheme’s impact on promoting digital payments.
- Empowerment through Credit: PMJDY accounts have become a gateway for credit access, particularly through Mudra loans, which have seen a compounded annual growth rate of 9.8% over five years. This access to credit empowers account holders to enhance their incomes and improve their economic standing.
About Pradhan Mantri Jan Dhan Yojana (PMJDY):
- The Pradhan Mantri Jan Dhan Yojana (PMJDY) is designed to ensure universal access to banking services, offering every household at least one basic bank account.
- It also promotes financial literacy and provides access to credit, insurance, and pension schemes.
- Features of PMJDY:
- The initiative seeks to expand banking services through both traditional bank branches and Banking Correspondents (BCs), covering both urban and rural areas.
- Account holders receive a RuPay debit card, and there is no requirement to maintain a minimum balance in PMJDY accounts.
- An overdraft facility of up to ₹10,000 is available to eligible adults.
- PMJDY accounts are integrated with various government schemes, including Direct Benefit Transfer (DBT), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), and Atal Pension Yojana (APY).
Way Forward:
To sustain and build upon the success of PMJDY, the focus should now shift towards enhancing financial literacy and ensuring the effective utilization of bank accounts for savings, investments, and credit access. Expanding financial services, such as micro-insurance and micro-pension schemes, will further empower marginalized communities. Continuous technological innovation and public-private partnerships will be crucial in maintaining the momentum of financial inclusion, ensuring that the benefits of the digital financial ecosystem reach the last mile.
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