6 years of Narendra Modi’s ‘Jan Dhan Yojana’: A successful game-changer and how 400 million Indians finally got bank accounts

The Pradhan Mantri Jan Dhan Yojana (PMJDY), the country’s financial inclusion initiative that was launched six years ago, has more than 403.5 million accounts with total deposits in excess of Rs 1.30 lakh crore, the Union finance ministry said.

The scheme, which has become the basis of direct transfer of cash subsidy to the poor, was announced by Prime Minister Narendra Modi in his Independence Day speech on August 15, 2014, and was launched on August 28 that year.

“Today, six years ago, the PMJDY was launched with an ambitious aim of banking the unbanked. This initiative has been a game-changer, serving as the foundation for several poverty alleviation initiatives, benefitting crores of people,” PM Modi tweeted on Friday.

The graphics shared by him showed that more than 40 crore bank accounts have been opened so far with more than 63 per cent of the beneficiaries belonging to rural areas. Over 55 per cent of them are women.  The government has said that it has been able to directly transfer welfare benefits to the needy due to the scheme.

The government is planning to expand the scheme to provide insurance coverage to PMJDY account holders. “Eligible PMJDY account holders will be sought to be covered under PMJJBY [Pradhan Mantri Jeevan Jyoti Bima Yojana] and PMSBY [Pradhan Mantri Suraksha Bima Yojana]. Banks have already been communicated about the same,” it said in a statement.

India is looking at providing free life and accident insurance cover to Jan Dhan account holders, as part of a push to bring such individuals under a social security net.

The government’s flagship Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana would be extended to eligible Jan Dhan account holders, and soon expanded to cover all operational 34.81 crore accounts, accounts, a government official told BloombergQuint on the condition of anonymity. The measure is being proposed to coincide with the sixth anniversary of the Pradhan Mantri Jan Dhan Yojana.

That could cost the government up to Rs 12,000 crore annually—if it provides accident and insurance cover to all 34.81 crore operational accounts.

At present, these accounts have a deposit balance of Rs 1.31 lakh crore, with an average deposit of Rs 3,239 per account. The average deposit per account has increased 2.5 times, which indicates increased usage of accounts and inculcation of saving habit among the account holders, it said.

The PMJDY account holders can also take help of ‘Jan Dhan Darshak App’, a mobile application, for locating banking touchpoints such as bank branches, automated teller machines (ATMs), Bank Mitras and post offices, it said.