10 years of Jan Dhan Yojana: Empowering India's poor

This year marks the 10th anniversary of the Pradhan Mantri Jan Dhan Yojana (PMJDY), launched by Prime Minister Narendra Modi in 2014 to boost financial inclusion in India.

The PMJDY scheme offers basic bank accounts with no minimum balance requirements, free RuPay debit cards with Rs 2 lakh accident insurance, and an overdraft facility of up to Rs 10,000, with no account opening or maintenance charges.

In 2018, the scheme was revised to target all unbanked adults, increasing the overdraft limit and accident insurance cover to encourage account uptake. This adjustment increased the overdraft limit from Rs 5,000 to Rs 10,000, and the accident insurance cover on RuPay cards from Rs 1 lakh to Rs 2 lakh.

As of August 14, 2024, the PMJDY scheme has opened close to 53.13 crore accounts, contributing to a total deposit balance of Rs 2.3 lakh crore. In this financial year, it aims to open over three crore additional PMJDY accounts.

The PMJDY has been foundational to India’s financial landscape by supporting various government initiatives, including direct benefit transfers, PM-KISAN, and MGNREGA wage payments.

The JAM Trinity (Jan Dhan, Aadhar, Mobile) has revolutionised government service delivery, allowing payment transfers to be completed with a few clicks.

Financial activity through PMJDY accounts is robust, with only 8.4% of Indians holding a zero balance account. The average balance has risen from Rs 1,065 in March 2015 to Rs 4,352 in August 2024. About 80% of the PMJDY accounts are active.

The RuPay cards issued under PMJDY—totalling 36.14 crores as of August 16, 2024—offer free accident insurance coverage if used within 90 days of an accident.

The scheme has notably addressed gender and geographical disparities, with 55.6% of PMJDY accounts held by women and 66.6% of accounts are opened in rural or semi-urban areas. Furthermore, 99.95% of inhabited villages now have banking facilities within a 5 km radius.

Besides financial inclusion, the scheme supports social security through PM Jeevan Jyoti Bima Yojana, PM Suraksha Bima Yojana, and Atal Pension Yojana. Credit-linked schemes, such as PM Mudra Yojana and Stand-Up India, have facilitated significant loans to micro-businesses and entrepreneurs.

The PMJDY scheme has been integral to India’s digital transformation. The IMF and World Bank have praised the India Stack—a comprehensive digital identity, payment, and data-management system—for dramatically advancing financial inclusion.

The JAM trinity has accelerated the financial inclusion rate from 25% in 2008 to over 80% in recent years, demonstrating a leap that would have otherwise taken decades.

As PMJDY enters its second decade, it aims to reach the remaining unbanked adults and expand financial services, solidifying its role in shaping India’s inclusive financial future.