PMJDY: 12 Years Of Financial Inclusion

Source: PIB
GS III: Indian Economy, Inclusive Growth

Why in the News?

The Pradhan Mantri Jan Dhan Yojana (PMJDY) completed 12 years since its launch in 2014.

News in Brief

• The scheme provides access to banking, DBT, credit, insurance, pension and digital payments.
• As of 19 August 2026, PMJDY has 59.09 crore accounts, including 32.92 crore accounts of female beneficiaries.
• Deposits in PMJDY accounts have also increased substantially.
• 32.92 crore female beneficiaries have PMJDY accounts.

Pradhan Mantri Jan Dhan Yojana

• The PM Jan Dhan Yojana (PM-JDY), India’s national mission for financial inclusion, was launched in 2014.
• Evolution of PMJDY
  • 2014- PMJDY launched as India’s national mission for financial inclusion.
    • Initially focused on providing a bank account to “every household.”
  • 2018- Focus expanded to “every unbanked adult”, widening the scope of financial inclusion.
    • The scheme provides basic banking services along with access to credit, remittances, insurance and pensions.
• Eligibility and Account Opening
  • PMJDY accounts can be opened by Indian citizens, with no upper age limit.
  • The scheme provides a basic savings bank account for an unbanked person and does not require the account holder to maintain any minimum balance.
  • A PMJDY account can be opened at a bank branch or through a Business Correspondent (BC)/Bank Mitra outlet, which acts as an extended arm of the bank branch.
  • The applicant has to submit the account-opening form along with the required KYC documents.
  • After verification, the bank activates the account. Joint accounts are also permitted.
• Documents required
  • The documents generally required include Aadhaar, government-issued identity proof such as voter ID, PAN card or ration card, permanent address proof, passport-size photograph and a duly filled and signed PMJDY account-opening form.
  • Other documents notified by the Government may also be accepted.
• Interest on savings
  • PMJDY accounts earn interest at the rate applicable to savings bank accounts.
• RuPay debit card and accident insurance
  • PMJDY account holders are provided a RuPay debit card, which is a domestic debit card accepted at ATMs and most PoS machines.
  • The account also provides accident insurance cover of ₹1 lakh, enhanced to ₹2 lakh for new PMJDY accounts opened after August 2018.
  • The beneficiary is not charged any premium; the premium is paid by the National Payments Corporation of India (NPCI).
• Overdraft facility
  • An overdraft facility of up to ₹10,000 is available to one PMJDY account holder per household.
  • It can be availed after six months of satisfactory operation of the account, subject to fulfilling the prescribed eligibility conditions.
• Linkage with social security schemes
  • PMJDY accounts also serve as a gateway to several social-security and financial schemes.
  • They are eligible for Direct Benefit Transfer (DBT), Pradhan Mantri Jeevan Jyoti Bima Yojana (PM-JJBY), Pradhan Mantri Suraksha Bima Yojana (PM-SBY), Atal Pension Yojana (APY) and the MUDRA scheme.

Impact of PMJDY

Accounts on the Rise

• PMJDY has seen a substantial expansion in account coverage since its launch.
• The number of accounts has increased nearly four-fold over the period, with a large share located in rural and semi-urban areas.
• This shows that the scheme has been able to extend formal banking services to people who were previously outside the banking system.

Greater Participation of Women

• Women constitute a significant share of PMJDY beneficiaries, and their participation has increased steadily over the years.
• This highlights the scheme’s role in promoting gender equality in financial access.
• This has helped improve women’s access to formal financial services and supports greater financial independence and economic participation.

Rising Deposits

• Deposits in PMJDY accounts have grown sharply since the scheme’s launch.
• The increase reflects growing saving habit among low-income households, increasing trust in formal banking, and deeper participation in the financial system.

Wider Use of RuPay Cards

• The distribution of RuPay debit cards has also expanded considerably among PMJDY account holders.
• This has strengthened access to digital banking and electronic transactions, helping integrate previously underserved sections into the digital financial ecosystem.

Significance for Indian Economy

• Financial inclusion is essential for broad-based economic growth and poverty reduction.
• Access to formal financial services helps people manage risks, invest in their future and build livelihoods.
• It also supports greater economic participation and reduces income inequalities.
• Improved the delivery of government benefits by enabling direct and more efficient transfer of welfare payments through DBT.
• For women, access to finance strengthens financial independence and economic empowerment
• Builds greater financial confidence among vulnerable groups by connecting them with banking, credit, insurance and pension services.

Way Forward and Conclusion

PMJDY has helped move financial inclusion beyond simply opening bank accounts by connecting vulnerable sections with savings, digital payments, DBT, credit, insurance and pensions.

The next step should be to ensure that these accounts are actively used and translate into greater financial security and economic empowerment.

UPSC Prelims and Mains Practice Question

Consider the following statements regarding the Pradhan Mantri Jan Dhan Yojana (PMJDY):

1. PMJDY was launched in 2014 as India’s national mission for financial inclusion.
2. PMJDY accounts require beneficiaries to maintain a minimum balance.
3. PMJDY accounts are eligible for Direct Benefit Transfer, insurance and pension schemes.

Which of the statements given above are correct?

A. 1 and 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 1, 2 and 3

Answer: B. 1 and 3 only

Mains Practice Question

Q. The success of financial inclusion cannot be measured merely by the number of bank accounts opened. Discuss the achievements and challenges of financial inclusion in India and suggest measures to ensure meaningful and sustainable financial inclusion. (250 words)

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