Pradhan Mantri Jan-Dhan Yojna (PMJDY)

The Pradhan Mantri Jan-Dhan Yojana (PMJDY) is a flagship financial inclusion programme launched by the Government of India to ensure access to financial services such as banking, savings and deposit accounts, remittance, credit, insurance, and pension for all households, especially those excluded from the formal banking system. Introduced on 28 August 2014, PMJDY represents one of the world’s largest financial inclusion initiatives, designed to provide universal banking access to every Indian citizen.

Background and Rationale

Before the implementation of PMJDY, a significant section of India’s population remained outside the formal banking network, relying on informal and often exploitative credit systems. Despite previous initiatives such as the Swabhimaan Scheme (2011) and No-Frills Accounts, financial inclusion remained limited due to procedural hurdles, low awareness, and inadequate infrastructure.
Recognising that economic empowerment begins with financial access, the Government of India launched PMJDY as part of its broader mission of inclusive growth under the “Sabka Saath, Sabka Vikas” vision. The scheme aimed to eliminate financial exclusion by enabling every household to have at least one basic bank account, thereby promoting savings habits and facilitating direct benefit transfers (DBTs) of government subsidies.

Objectives of PMJDY

The primary objectives of the Pradhan Mantri Jan-Dhan Yojana are:

1. Universal Access to Banking Facilities: Ensuring that every household has at least one bank account.
2. Financial Literacy: Promoting awareness about financial management and formal banking systems.
3. Access to Credit, Insurance, and Pension: Providing a platform for citizens to avail themselves of credit, insurance, and pension facilities.
4. Direct Benefit Transfer (DBT): Channelising government subsidies and welfare benefits directly into beneficiaries’ accounts to eliminate leakages.
5. Encouraging Savings and Digital Transactions: Promoting a cashless economy through the use of debit cards and digital platforms.

Key Features of PMJDY

The PMJDY offers several integrated financial benefits aimed at empowering individuals from economically weaker sections.

• Zero-Balance Savings Account: Beneficiaries can open savings accounts in banks without the requirement of a minimum balance.
• RuPay Debit Card: Each account holder receives a RuPay debit card, enabling cash withdrawals and digital transactions.
• Accidental Insurance Cover: Account holders are eligible for accidental insurance coverage of up to ₹2 lakh linked to their RuPay card.
• Life Insurance Cover: Accounts opened within the initial phase (up to 26 January 2015) were eligible for a life insurance cover of ₹30,000.
• Overdraft Facility: After six months of satisfactory operation, account holders can access an overdraft facility of up to ₹10,000.
• Direct Benefit Transfer (DBT): Subsidies for schemes like LPG (PAHAL), MNREGA payments, and pensions are directly credited to beneficiaries’ accounts.
• Micro-Insurance and Pension Schemes: Integration with schemes like Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), and Atal Pension Yojana (APY) to enhance social security.

Implementation Phases

The PMJDY has been implemented in multiple phases, each focusing on specific deliverables.
Phase I (15 August 2014 – 14 August 2015):

• Targeted opening of basic bank accounts for every household.
• Issuance of RuPay debit cards.
• Introduction of insurance and overdraft facilities.

Phase II (15 August 2015 – 14 August 2018):

• Expansion of coverage to include accident insurance, pension schemes, and micro-credit facilities.
• Introduction of financial literacy programmes.

Phase III (from 15 August 2018 onwards):

• Continuation of PMJDY with enhanced insurance cover (₹2 lakh).
• Extension of overdraft limit to ₹10,000.
• Focus on every adult having a bank account rather than only households.

Institutional Framework and Operation

The PMJDY is coordinated by the Department of Financial Services (DFS) under the Ministry of Finance. The operational framework involves:

• Public Sector Banks (PSBs): Leading the initiative with extensive outreach in rural and semi-urban areas.
• Regional Rural Banks (RRBs) and Cooperative Banks: Facilitating account openings in remote regions.
• Business Correspondents (BCs): Acting as intermediaries to provide doorstep banking services through micro-ATMs.
• Financial Literacy Centres (FLCs): Conducting awareness drives to educate beneficiaries on financial management.

To promote transparency, the government established a PMJDY Mission Office and introduced a real-time monitoring system through the official website (pmjdy.gov.in).

Achievements and Progress

PMJDY has achieved remarkable success in expanding financial inclusion across India. As of 2025, the scheme has recorded:

• Over 51 crore accounts opened across the country.
• More than ₹2.15 lakh crore deposited in these accounts.
• Over 67% of accounts held in rural and semi-urban areas.
• Around 56% of account holders being women.

The scheme has also played a vital role in enabling Direct Benefit Transfers (DBT), reducing subsidy leakages, and strengthening the delivery of welfare schemes. The linkage of Aadhaar with PMJDY accounts has facilitated accurate beneficiary identification and improved financial transparency.

Impact on Financial Inclusion

The PMJDY has significantly contributed to deepening India’s financial inclusion landscape through:

• Formalising Savings: Encouraging low-income households to save through the formal banking system.
• Improving Access to Credit: Facilitating micro-loans and self-employment through linked credit products.
• Empowering Women: Enhancing women’s financial independence through direct account ownership.
• Reducing Informal Borrowing: Decreasing reliance on informal moneylenders.
• Boosting Digital Transactions: Expanding digital financial inclusion through RuPay cards and mobile banking.
• Strengthening Welfare Delivery: Streamlining DBT transfers under schemes like PM-KISAN and PMUY.

Challenges and Limitations

Despite its impressive outreach, PMJDY faces several operational and structural challenges:

• Dormant Accounts: A significant portion of accounts remain inactive with negligible transactions.
• Limited Financial Literacy: Many beneficiaries lack awareness about account features and digital usage.
• Operational Issues: Business correspondents often face connectivity problems and inadequate remuneration.
• Overdraft Non-Repayment: Defaults in overdraft facilities pose risks to sustainability.
• Infrastructure Gaps: Remote regions still face inadequate banking infrastructure and limited financial access.

Addressing these challenges requires continued investment in financial education, technological infrastructure, and improved service delivery mechanisms.

Role During Crises and Welfare Delivery

The PMJDY network has proved particularly effective during national crises. During the COVID-19 pandemic (2020–21), the government utilised Jan-Dhan accounts to disburse direct cash transfers to women beneficiaries under the Pradhan Mantri Garib Kalyan Yojana (PMGKY). Over ₹30,000 crore was transferred to women account holders, demonstrating the robustness of the financial inclusion infrastructure.
Additionally, PMJDY accounts have facilitated disaster relief payments, pension disbursements, and welfare transfers efficiently across diverse demographic segments.

Significance and Global Recognition

The PMJDY is widely regarded as one of the most successful financial inclusion programmes globally. It has been acknowledged by international organisations such as the World Bank and the United Nations for its scale, innovation, and impact. The World Bank’s Global Findex Report (2021) highlighted India’s remarkable increase in bank account ownership, attributing much of the progress to the Jan-Dhan initiative.
PMJDY also aligns with the United Nations’ Sustainable Development Goals (SDGs), particularly Goal 1 (No Poverty), Goal 5 (Gender Equality), and Goal 8 (Decent Work and Economic Growth), by fostering equitable access to financial resources.

Future Prospects

The future of PMJDY lies in deepening financial inclusion beyond mere account opening to active usage. The government aims to promote digital financial services, expand access to micro-insurance and credit, and integrate PMJDY with upcoming fintech innovations.
Key focus areas include:

• Strengthening the Digital Payment Infrastructure through the Unified Payments Interface (UPI) and mobile banking.
• Expanding micro-credit facilities for self-employment and small enterprises.
• Enhancing financial literacy to encourage informed financial behaviour.
• Promoting women-centric financial products to ensure gender-balanced inclusion.