India has dealt with the problem of unbanked adults effectively as it has managed to get opened over 489.3 million new banking accounts in the past eight to nine years.

Interestingly, 56 per cent of these beneficiaries are women while 67 per cent are from rural and semi-urban areas. The scheme, named PM Jan Dhan Yojana (PMJDY), has helped the Government of India make inroads in rural areas and bring underprivileged sections of society under the banking net.

The PMJDY was launched in September 2014. The financial inclusion mission received a huge response from across the country, thanks to favourable terms and conditions and extensive benefits. Thousands of people thronged to different banks to open saving accounts under the scheme that transformed the banking sector in India. It made it to the Guinness World Records for facilitating the opening of over 18 million accounts in just a week.

The Jan Dhan accounts held over Rs 1.98 trillion (roughly $24 billion) in May 2023.

These accounts are linked to several social welfare schemes. The Government of India has succeeded in reaching out to the poorest of the poor, especially during disasters. The PMJDY bank accounts proved very helpful when Covid-19 pandemic induced lockdowns forced people to stay indoors, which caused loss of livelihoods. The government released funds worth Rs 6.8 billion (roughly $8.3 million) in the PMJDY accounts. This allowed the Covid-affected, poor and vulnerable people to buy essential commodities and services.

The scheme has been a landmark achievement as it led to the comprehensive financial inclusion of almost every household in India. Financial literacy, plugging in leakages, access to credit, women empowerment, and extending services of insurance and pension to vulnerable communities are among the major benefits of the PMJDY.

There is no fee for opening a bank account under the PMJDY while accident insurance cover is provided free of cost. There is no requirement to maintain a minimum balance either.

Washington-based Brookings Institution had said that the PMJDY has had a “considerable impact” in expanding financial access.

“The PMJDY programme has certainly helped drive access to formal financial services across India and amplified the discourse surrounding financial inclusion among public and private sector stakeholders,” it said in its 2016 report.

In 2014, India used to be one of the top most unbanked countries globally. However, the PMJDY changed the scenario. The percentage of bank account holders rose from 35 per cent in 2011 to 78 per cent in 2021, according to the World Bank.

“Much of that growth occurred between 2014 and 2017 as a result of a government programme that began in 2014 and provided unbanked adults with a financial account leveraging an official government identification document,” revealed a World Bank report of 2021.

Inclusion of women from poor backgrounds and rural areas in the banking services is a very important aspect of the PMJDY. Globally, the majority of unbanked adults are women. Non-profit Women’s World Banking stated that women cannot exercise their rights if they do not have access to financial services.

It also praised India for a “huge amount” of success in the last-mile delivery of banking services to underserved communities.

“While many of these women are actively using their PMJDY accounts, they are doing so only to access the benefit transfers they receive from government initiatives, which means that they are simply cashing out their benefits,” it said.

The global non-profit, which was formed after the first-ever UN Women’s Conference on human rights in 1975, has collaborated with Indian banks to encourage women to save money in their PMJDY accounts. This would help build financial resilience for women and economic resilience in India, it said in its report on The Power of Jan Dhan.’

Access to banking through PMJDY has allowed Indian women to save money they get from different sources. The report revealed that the average balance maintained by women was 30 per cent more than that by men. It reflected how the PMJDY is contributing to women’s empowerment.

Women’s World Banking Executive VP (Asia) Sriraman Jagannath said, “We are blessed to have a platform like the Jan Dhan Yojana, which can be the world’s largest women’s empowerment opportunity.”