There was a time when having a bank account was considered a luxury by the poor and marginalized. Since independence, a large section of citizens of India was not able to avail the benefits of a bank account. When Prime Minister Narendra Modi took charge in 2014, one of the most significant initiatives he announced was Pradhan Mantri Jan Dhan Yojana.
The aim of the scheme was to bring the poor and marginalized sections of the society under the banking system. Since its launch, the government of India has taken numerous steps to improve the connectivity of the banking system to every corner of the country.
जब हमारी सरकार आई तो हमने देखा कि देश की करोड़ों बहनें ऐसी थीं जिनके पास बैंक खाता तक नहीं था, जो बैंकिंग सिस्टम से कोसों दूर थीं।— PMO India (@PMOIndia) August 12, 2021
इसलिए हमने सबसे पहले जनधन खाते खोलने का बहुत बड़ा अभियान शुरू किया: PM @narendramodi
The scheme was announced by PM Modi on August 15, 2014, during his Independence Day address. He had said, “I have come here with a pledge to launch a scheme on this festival of Freedom. It will be called Pradhan Mantri Jan-Dhan Yojana. I wish to connect the poorest citizens of the country with the facility of bank accounts through this scheme. There are millions of families who have mobile phones but no bank accounts. We have to change this scenario. Economic resources of the country should be utilized for the well-being of the poor. The change will commence from this point. This scheme will open the window. Therefore, an account holder under `Pradhanmantri Jan-Dhan Yojana` will be given a debit card. An insurance of One Lakh Rupees will be guaranteed with that debit card for each poor family, so that such families are covered with the insurance of One Lakh Rupees in case of any crisis in their lives.”
The scheme completes seven years of its successful run on August 28, 2021. As per the stats available on PMJDY’s website, 43.04 crore beneficiaries have been connected to the banking system under this scheme. A total of Rs. 146,230.71 crores are currently deposited in these accounts. To ensure everyone gets easy access to the banking system, the government-appointed Bank Mitras in sub-service areas. Stats suggest that around 1.26 such Bank Mitras are providing branchless banking services in the sub-service areas.
The stats suggest that 86.3% of the accounts opened under the scheme are active. During the period of August 2015 to August 2020, the number of accounts under the scheme saw a massive increase of 2.3 times in the number of accounts and a 5.7 times increase in the amount deposited in these accounts. Reports say that, on average, each account under the Jan Dhan scheme has an average balance of Rs.3,239/- which is 2.5 times higher compared to August 2015.
Notably, there is no minimum balance required under this scheme. That means the account holders are not bound to keep money in the bank, but they have decided to stay connected to the banking system, which is a big achievement for the central government. Also, to promote cashless banking under the scheme, the banks have issued over 31 crore RuPay cards. On the first anniversary of the scheme, PM Modi told the nation that the accounts under the scheme saw deposits worth Rs.22,000 crores.
Jan Dhan Yojana’s role in women empowerment
According to a recent report published by Women’s World Banking and Bank of Baroda titled “The Power of Jan Dhan: Making Finance Work for Women in India”, [PDF] 55% (23.76 crores out of 43.04) of PMJDY accounts are owned by women making them a majority in the PMJDY portfolio. As the account requires minimal paperwork and the banks are providing additional support to open these accounts, PMJDY has proactively provided women with bank accounts by bridging the gaps created by the issues such as illiteracy which was a common challenge among low-income segments of the society, while opening a bank account. Reports suggest that the average balance maintained by women in Jan Dhan accounts is 30% more compared to accounts owned by men.
On August 12, while addressing women beneficiaries under Atmanirbhar Nari Shakti Samvad, Prime Minister Narendra Modi said, when the BJP government came into power in 2014, they noticed that crores of women did not have bank accounts. “Today, there are more than 42 crores Jan Dhan accounts in the country, and about 55 per cent of these accounts belong to our mothers and sisters. Thousands of crores of rupees are deposited in these accounts. Instead of putting their savings in the kitchen boxes as was the norm earlier, the money is now being deposited in the bank accounts,” he said.
Under Pradhan Mantri Garib Kalyan Yojna, women account holders of Jan Dhan accounts received Rs.500 for three months. Around 20 crore women were benefitted from the scheme.
Role of Jan Dhan accounts in controlling corruption
The scheme has played a vital role in preventing corruption at the grassroots level. As the scheme has allowed the government to directly transfer benefits to the beneficiaries under different welfare schemes, it has eliminated the need for middlemen. Under schemes such as Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Atal Pension Yojana (APY), or Micro Units Development & Refinance Agency Bank (MUDRA) scheme, Pradhan Mantri Mudra Yojana (PMMY) and Stand-Up India (SUPI) and several others, the government transfers funds to the beneficiaries via Direct Benefit Transfer (DBT). Under the PMJDY, there has been a perpetual rise in the number of beneficiaries of different insurance schemes. In a tweet Union Minister Ravi Shankar Prasad said that Pradhan Mantri Suraksha Bima Yojna (PMSBY) has added 23.66 crores, Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY) 10.53 crore and Atal Pension Yojana (APY) added 3.13 crore beneficiaries.
PM @narendramodi‘s vision is to provide financial security to citizens. There has been a perpetual rise in the number of beneficiaries of the insurance schemes. PMSBY has added 23.66 cr, PMJJBY 10.53 cr & APY has added 3.13 cr beneficiaries. pic.twitter.com/7THTN4V8Et— Ravi Shankar Prasad (@rsprasad) August 23, 2021
The government has taken more steps to provide more benefits under the scheme, such as it has increased the accident insurance cover from Rs.1 lakh to Rs.2 lakh. The overdraft limit of such banks has been increased from Rs.5,000 to Rs.10,000. The age limit for the accounts has also been increased from 60 years to 65 years. To ensure more people are connected to the scheme, the government has shifted the focus from “one account per household” to “one account per adult”.