Ten Years of Pradhan Mantri Jan Dhan Yojana

Ten Years of Pradhan Mantri Jan Dhan Yojana

Why in News Ten Years of Pradhan Mantri Jan Dhan Yojana? 

After completing ten years of (Pradhan Mantri Jan-Dhan Yojana) PMJDY, a special push has been launched by RBI to update KYC details of account holders. RBI asked banks to organise camps at the village level from July to September 2025. 

• Account holders who opened their Jan Dhan accounts in 2014-2015 now need to complete re-KYC in these camps to keep their accounts active.

What is PMJDY (Pradhan Mantri Jan Dhan Yojana)?

• About: The Pradhan Mantri Jan Dhan Yojana (PMJDY) stands among India’s most impactful initiatives for promoting financial inclusion at the national level.

• Prime Minister Narendra Modi introduced this scheme on 28 August 2014 to connect every household with the formal banking system.

•  The scheme aimed to bring every household in India under the formal banking network. 

• At the time of its launch, a large number of people, especially in rural areas, did not have access to basic banking services. The scheme was created to bridge the financial gap between urban and rural India. 

• Objectives: The main aim of PMJDY is to ensure the availability of essential financial services to people who are poor or outside the banking network.

• The scheme works on the idea that economic empowerment begins with financial access, especially for people at the lowest levels of society.

• • • The government aimed to ensure that every person could save money, receive government benefits directly, and have access to small credit and insurance through their bank account.
    • By linking bank accounts with Aadhaar and mobile numbers, the scheme pushed towards a cashless and transparent economy.

• Features: The PMJDY offers many features that make it a powerful and inclusive scheme for the financially weak sections of society:

• • Zero Balance Accounts: Under PMJDY, people can open savings bank accounts with zero minimum balance. This means individuals are not forced to deposit money to open or maintain their accounts. 
  • RuPay Debit Card: Every account holder receives a free RuPay debit card. This card can be used for ATM withdrawals, online shopping, and digital payments. 
  • Overdraft Facility: PMJDY account holders who use their account actively for at least six months may become eligible for an overdraft of up to ₹10,000. This helps in urgent financial needs.
  • Life Insurance Coverage: Account holders who opened their account between 15 August 2014 and 31 January 2015 received life insurance coverage of ₹30,000. The benefit is payable on the death of the insured person, subject to certain conditions.
    • It also provides accidental insurance coverage of up to ₹2 lakh (as revised in 2018 for accounts opened after August 2018).
  • Access to Government Schemes and DBT: PMJDY accounts are used as channels to receive subsidies and benefits under various central and state schemes. Direct Benefit Transfers (DBT) through PMJDY helped plug leakages.
  • Mobile and Aadhaar Linking: Each PMJDY account is encouraged to be linked with Aadhaar and mobile number. This enables two-factor authentication.
  • Support for Digital India: PMJDY supports the Digital India programme by providing the basic infrastructure needed for digital payments. It helps spread digital literacy among the poor and rural population.

Achievements of Pradhan Mantri Jan-Dhan Yojana (As of 2024)

• Increase in Bank Account: Since its launch in 2014, the Pradhan Mantri Jan Dhan Yojana (PMJDY) has transformed the financial landscape of India. Starting with 147 million bank accounts by March 2015, the total number of Jan Dhan accounts reached over 520 million by March 2024, showing the massive expansion of banking outreach. 

• Growth in Deposit Base: The deposits in PMJDY accounts saw extraordinary growth. In March 2015, the total deposits stood at around ₹15,600 crore. By March 2024, this figure rose dramatically to approximately ₹2.32 trillion. The average balance per account also grew from ₹1,065 in 2015 to nearly ₹4,476 in 2024, showing a fourfold increase.

• Expansion of Banking Access: PMJDY’s success also came from improved banking infrastructure. The Jan Dhan Darshak (JDD) App has played a key role in guiding citizens to the nearest banking outlet. By July 2023, over 1.3 million banking touchpoints were available across India. The app mapped 601,000 villages, and 99.7% of these were found to be within a 5-kilometre radius of a banking outlet. 

• Strong Presence in Rural Areas: The scheme has successfully bridged the rural-urban divide in banking. By 2024, out of over 53 crore PMJDY accounts, around 66.6% were located in rural and semi-urban regions. Moreover, 55.6% of total account holders were women, indicating that PMJDY has been instrumental in women’s financial empowerment. 

• Push to Digital Transactions: The digital payment ecosystem has expanded rapidly under PMJDY. In FY 2018, India recorded around 920 million UPI transactions. This number soared to over 131.2 billion by FY 2024. Similarly, RuPay card transactions on Point of Sale (PoS) and e-commerce platforms also grew from 670 million in FY 2018 to 1.26 billion in FY 2023. 

• Effective Platform for DBT: PMJDY became the backbone of India’s Direct Benefit Transfer (DBT) system. By 2024, more than USD 361 billion had been transferred directly to the beneficiaries through over 312 schemes managed by 53 central ministries. During the COVID-19 pandemic, PMJDY accounts were used to provide ₹500 per month for three months to around 20.64 crore women under the Pradhan Mantri Garib Kalyan Yojana (PMGKY). 

• Global Recognition: The World Bank acknowledged India’s achievement in financial inclusion under PMJDY. According to its analysis, India achieved in six years what might have taken five decades under normal progress. The combination of Jan Dhan, Aadhaar, and Mobile (JAM) trinity played a major role in this progress. The financial inclusion rate in India rose from 25% in 2008 to 80% by 2024. 

Challenges and Future Scope of Pradhan Mantri Jan Dhan Yojana (PMJDY)

• Challenges:

• • • Inactive Accounts: Many Jan Dhan accounts are not used regularly. This reduces the purpose of financial inclusion. People still depend on cash instead of banking services.
    • Limited Financial Literacy: A large number of account holders, especially in villages, do not fully understand how to use banking features. Lack of awareness about savings, overdraft, and digital payments affects long-term impact.
    • Re-KYC Process: As many accounts opened in 2014-15 complete ten years, the re-KYC requirement has become urgent. But people in remote areas face difficulty completing the process due to limited support and documentation.
    • Overdependence on Basic Services: Most users use Jan Dhan accounts only for receiving subsidies or cash withdrawals. They rarely use insurance, overdraft, or digital tools. This prevents complete financial empowerment.

• Future Scope:

• • Promotion of Digital Transactions: PMJDY can become a powerful tool to expand digital banking in rural India. With increasing mobile usage, the scheme can promote safer and faster digital payments.
  • Focus on Financial Education: The government should expand efforts to teach people how to save, invest, and use digital tools. Financial literacy camps can help account holders use the full benefits of Jan Dhan.
  • Improving Re-KYC Support: Special camps and simplified processes can help account holders complete re-KYC easily. Mobile vans and doorstep banking services can reach remote areas.
  • Expanding Credit and Microloans: PMJDY accounts can link with microloan schemes and self-help groups. This can increase access to small credit and help families start income-generating activities. Offering easy-to-understand small loans can truly empower the underserved population.