Pradhan Mantri Jan Dhan Yojana

Pradhan Mantri Jan Dhan Yojana | UPSC Compass

Why in News

Pradhan Mantri Jan Dhan Yojana completed 11 years on 28th August 2025.
It has become the world’s largest financial inclusion programme, with nearly 100 percent households and over 90 percent adults in India now having a bank account.

About Pradhan Mantri Jan Dhan Yojana

Launch

Launched in 2014 to provide universal access to banking services for people without bank accounts.

Key Objectives

Zero-balance savings bank accounts
RuPay debit cards
Insurance coverage
Pension schemes
Direct Benefit Transfer of subsidies and welfare schemes

Other Benefits

Reduced dependence on local moneylenders and informal credit channels.

Progress Over 11 Years

Account Growth

More than 56.2 crore accounts opened compared to only around 15 crore in 2015.
Became the largest financial inclusion programme in the world.

Gender Inclusion

56 percent of accounts are held by women.
Shows empowerment of women in financial decision-making.

Rural Outreach

37.5 crore accounts belong to rural and semi-urban areas.
16.2 lakh banking correspondents (Bank Mitras) providing banking access at the doorstep in villages.

Deposits Expansion

Total balance in accounts stands at ₹2.68 lakh crore, which is 17 times higher than in 2015.
Indicates increasing savings habit among beneficiaries.

Digital Ecosystem

More than 38.7 crore RuPay cards distributed.
Supported the growth of Unified Payments Interface (UPI) transactions.
Strengthened the digital economy.

Impact of Pradhan Mantri Jan Dhan Yojana

Direct Benefit Transfer

Subsidies for cooking gas, pensions, and Covid-19 relief payments reached beneficiaries directly.
Cut out intermediaries and reduced corruption.

Support in Crisis

Played a crucial role during demonetisation in 2016.
Helped during the Covid-19 pandemic by enabling quick transfer of funds to millions of poor households.

Financial Security

Linked with insurance schemes:
- Pradhan Mantri Jeevan Jyoti Bima Yojana
- Pradhan Mantri Suraksha Bima Yojana
Linked with pension scheme:
- Atal Pension Yojana
Offered social safety net to the unorganised sector.

Banking Access in Villages

99.9 percent villages now have access to banking facilities.
Banking access provided through a bank branch, a banking correspondent, or an India Post Payments Bank outlet within five kilometres.

Issues and Challenges

A significant number of accounts remain dormant, showing limited regular use.
Many account holders do not have access to formal credit facilities and still depend on microfinance groups or informal moneylenders.
Digital divide continues in smaller towns and villages due to:
- Low smartphone ownership
- Lack of digital literacy
Lack of awareness about insurance and pension schemes linked with the programme.
Accounts are mostly used for receiving government subsidies, but less for productive purposes such as investment or entrepreneurship.

Way Forward

Reactivate dormant accounts by:
- Organising awareness drives
- Giving incentives for regular transactions
Improve credit linkages by connecting accounts with small loans and microcredit to promote entrepreneurship.
Strengthen financial literacy campaigns in local languages and through community-level initiatives.
Develop voice-based and artificial intelligence-driven banking tools to reach low-literacy populations without smartphones.
Expand the reach of Jan Suraksha insurance schemes and pension coverage to more informal workers.
Encourage the use of Jan Dhan balances for:
- Savings
- Investments such as small savings schemes and mutual funds

Conclusion

Pradhan Mantri Jan Dhan Yojana is the largest financial inclusion programme in the world, transforming subsidy delivery and empowering poor and marginalised households.
The next decade should focus on:
- Increasing active use of accounts for savings, credit, and insurance
- Improving financial literacy
- Using technology to expand financial access
- Making Jan Dhan accounts a real driver of inclusive growth and social security

Why in News

Pradhan Mantri Jan Dhan Yojana completed 11 years on 28th August 2025.

It has become the world’s largest financial inclusion programme, with nearly 100 percent households and over 90 percent adults in India now having a bank account.

About Pradhan Mantri Jan Dhan Yojana

Launch

Launched in 2014 to provide universal access to banking services for people without bank accounts.

Key Objectives

Zero-balance savings bank accounts

RuPay debit cards

Insurance coverage

Pension schemes

Direct Benefit Transfer of subsidies and welfare schemes

Other Benefits

Reduced dependence on local moneylenders and informal credit channels.

Progress Over 11 Years

Account Growth

More than 56.2 crore accounts opened compared to only around 15 crore in 2015.

Became the largest financial inclusion programme in the world.

Gender Inclusion

56 percent of accounts are held by women.

Shows empowerment of women in financial decision-making.

Rural Outreach

37.5 crore accounts belong to rural and semi-urban areas.

16.2 lakh banking correspondents (Bank Mitras) providing banking access at the doorstep in villages.

Deposits Expansion

Total balance in accounts stands at ₹2.68 lakh crore, which is 17 times higher than in 2015.

Indicates increasing savings habit among beneficiaries.

Digital Ecosystem

More than 38.7 crore RuPay cards distributed.

Supported the growth of Unified Payments Interface (UPI) transactions.

Strengthened the digital economy.

Impact of Pradhan Mantri Jan Dhan Yojana

Direct Benefit Transfer

Subsidies for cooking gas, pensions, and Covid-19 relief payments reached beneficiaries directly.

Cut out intermediaries and reduced corruption.

Support in Crisis

Played a crucial role during demonetisation in 2016.

Helped during the Covid-19 pandemic by enabling quick transfer of funds to millions of poor households.

Financial Security

Linked with insurance schemes:

Pradhan Mantri Jeevan Jyoti Bima Yojana

Pradhan Mantri Suraksha Bima Yojana

Linked with pension scheme:

Atal Pension Yojana

Offered social safety net to the unorganised sector.

Banking Access in Villages

99.9 percent villages now have access to banking facilities.

Banking access provided through a bank branch, a banking correspondent, or an India Post Payments Bank outlet within five kilometres.

Issues and Challenges

A significant number of accounts remain dormant, showing limited regular use.

Many account holders do not have access to formal credit facilities and still depend on microfinance groups or informal moneylenders.

Digital divide continues in smaller towns and villages due to:

Low smartphone ownership

Lack of digital literacy

Lack of awareness about insurance and pension schemes linked with the programme.

Accounts are mostly used for receiving government subsidies, but less for productive purposes such as investment or entrepreneurship.

Way Forward

Reactivate dormant accounts by:

Organising awareness drives

Giving incentives for regular transactions

Improve credit linkages by connecting accounts with small loans and microcredit to promote entrepreneurship.

Strengthen financial literacy campaigns in local languages and through community-level initiatives.

Develop voice-based and artificial intelligence-driven banking tools to reach low-literacy populations without smartphones.

Expand the reach of Jan Suraksha insurance schemes and pension coverage to more informal workers.

Encourage the use of Jan Dhan balances for:

Savings

Investments such as small savings schemes and mutual funds

Conclusion

Pradhan Mantri Jan Dhan Yojana is the largest financial inclusion programme in the world, transforming subsidy delivery and empowering poor and marginalised households.

The next decade should focus on:

Increasing active use of accounts for savings, credit, and insurance

Improving financial literacy

Using technology to expand financial access

Making Jan Dhan accounts a real driver of inclusive growth and social security