Roadmap to Financial Inclusion: Pradhan Mantri Jan Dhan Yojana Pravakar Sahoo

The state of financial inclusion in India, measured by any standard, leaves much to be desired. As in 2012, only 35 per cent of Indians older than 15 years had a bank account in a formal financial institution; in developing countries worldwide, the average is 41 per cent (World Bank 2012). Because of the Reserve Bank of India’s drive for financial inclusion, the number of bank accounts increased by about 100 million during 2011–13. today, there are 229 million basic bank accounts. Access to formal financial institutions has improved gradually, but thousands of villages still lack a bank branch; less than 10 per cent of all commercial bank credit goes to rural areas, where around 70 per cent of the total population lives. Thus, the need for financial inclusion programmes is beyond question. Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched on 28th August, 2014. Initially, the PMJDY targets the opening of bank accounts for 7.5 crore families in a year, by August 15th, 2015. Around 2 crore bank accounts were opened on the first day of the scheme’s launch. Eventually, the target is to include every eligible Indian in the banking system. In Phase 1, all households will be provided a basic account, financial literacy will be taken to the micro level and the modus operandi for direct cash benefits will be put in place. Phase 2 intends to extend financial services to these basic account holders and provide them micro-insurance and pension. As it is difficult to spread bank branches across all unbanked areas, Bank Correspondents (BCs) will be deployed on a large scale to help execute the plan.