A decade of Jan Dhan: How the scheme has revolutionized the financial and banking sectors
On Wednesday, August 28, as the Pradhan Mantri Jan Dhan Yojana (PMJDY) marked its 10th anniversary, Prime Minister Narendra Modi celebrated the scheme’s “momentous” success, highlighting its critical role in advancing financial inclusion and empowering millions of people, particularly women, youth, and marginalized communities.
The Pradhan Mantri Jan Dhan Yojana (PMJDY) was initiated on August 28, 2014, as a national mission aimed at promoting financial inclusion. Over the past ten years, 53.13 crore Jan Dhan accounts have been established, including 29.56 crore accounts held by women beneficiaries. These figures surpass the population of the European Union and are nearly equivalent to the population of the United States, according to the government’s statement.
The Pradhan Mantri Jan Dhan Yojana (PMJDY) was one of the early flagship initiatives of the Modi government. Prime Minister Narendra Modi unveiled the scheme during his first Independence Day address on August 15, 2014. Speaking from the historic Red Fort, he declared, “I have come here with a commitment to launch a scheme on this day of freedom.
It will be named the Pradhan Mantri Jan Dhan Yojana.” Modi expressed his intention to “connect the poorest citizens of the country with the facility of bank accounts through this yojana.” He further elaborated that this scheme would “open new opportunities,” with each account holder under the Pradhan Mantri Jan Dhan Yojana receiving a debit card. Additionally, he announced that “an insurance of one lakh rupees will be guaranteed with that debit card for each poor family.”
The Jan Dhan Yojana was officially launched on August 28, with banks across the country organizing 77,892 camps and opening approximately 1.8 crore accounts. This remarkable effort earned recognition from Guinness World Records, which acknowledged the accomplishment as “the most bank accounts opened in 1 week as part of a financial inclusion campaign,” with a total of 18,096,130 accounts opened by the Department of Financial Services, Government of India, from August 23 to 29, 2014.
The introduction of PMJDY marked an extraordinary leap forward in the government’s financial inclusion efforts, achieving a scale that had never been witnessed before. Although previous governments, including the UPA administration, had also initiated financial inclusion measures—such as launching a scheme for no-frills bank accounts aimed at individuals without existing accounts—these efforts struggled to gain significant traction. The launch of PMJDY, however, provided an unparalleled momentum to the cause.
- The primary goal of the Pradhan Mantri Jan Dhan Yojana (PMJDY) was to open a Basic Savings Bank Account for individuals who did not have access to banking services. These accounts did not require the maintenance of a minimum balance, and like regular accounts, they accrued interest on deposits.
- PMJDY account holders were issued RuPay debit cards.
- An accident insurance cover of Rs 1 lakh was provided with the RuPay cards given to PMJDY account holders, and for accounts opened after August 28, 2018, this cover was increased to Rs 2 lakh.
- Eligible PMJDY account holders were also granted access to an overdraft (OD) facility of up to Rs 10,000.
- Additionally, PMJDY accounts were eligible for various government benefits, including Direct Benefit Transfers (DBT), the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), the Pradhan Mantri Suraksha Bima Yojana (PMSBY), the Atal Pension Yojana (APY), and the Micro Units Development & Refinance Agency Bank (MUDRA) scheme.
As of August 14, 2024, the Pradhan Mantri Jan Dhan Yojana (PMJDY) has seen significant progress, with the total number of accounts reaching 53.13 crore. This includes 35.37 crore accounts in rural and semi-urban areas and 17.76 crore accounts in urban regions. The total deposits in these accounts amount to Rs 2,31,235.97 crore. Notably, more than half of the PMJDY accounts, or 29.56 crore, are held by women. Additionally, a total of 36.14 crore RuPay debit cards have been issued to account holders under this scheme.
Deposits in Jan Dhan accounts are predominantly held with public sector banks, which account for the largest share, comprising 41.42 crore accounts as of August 14. Following this, Regional Rural Banks hold 9.89 crore accounts, private sector banks have 1.64 crore accounts, and Rural Cooperative Banks maintain 0.19 crore accounts.
A statewise analysis of PMJDY accounts reveals that Uttar Pradesh, the most populous state in India, has the highest number of accounts, totaling 9.45 crore. In contrast, the Union Territory of Lakshadweep has the fewest, with only 9,256 accounts. Additionally, there are 15 other states, apart from Uttar Pradesh, where the number of PMJDY bank accounts exceeds 1 crore. These states include Bihar, West Bengal, Madhya Pradesh, Rajasthan, Maharashtra, Assam, Odisha, Karnataka, Jharkhand, Gujarat, Chhattisgarh, Tamil Nadu, Andhra Pradesh, Telangana, and Haryana.
The Pradhan Mantri Jan Dhan Yojana (PMJDY), a key element of the JAM trinity (Jan Dhan, Aadhaar, and mobile), has significantly impacted India’s financial and banking sectors. Since its launch, over half a billion bank accounts have been created, boosting the demand for banking services and leading to a 46% increase in bank branches and a 30% rise in ATMs from 2013 to 2024. Digital payment solutions like UPI have made banking more accessible, while PMJDY accounts now serve as the foundation for the government’s Direct Benefit Transfer (DBT) system, improving efficiency and saving Rs 3.48 lakh crore by March 2023.
