Indian scheme brings 530 million adults into the banking system

NEW DELHI: Indian poverty reduction scheme, Pradhan Mantri Jan Dhan Yojana (PMJDY), has brought 530 million adults into the banking system over the past 10 years, as announced on its 10th anniversary. Recognised as the world’s largest financial inclusion initiative, the scheme has significantly expanded access to financial services.

A key aspect of the scheme is its focus on low-income women, who make up 295 million of the beneficiaries. By directly transferring benefits into Jan Dhan accounts, the scheme eliminates the need for intermediaries, ensuring that financial support reaches its intended destinations. The name “Jan Dhan” translates to “people’s wealth” in Hindi.

The scheme underscores the importance of universal and affordable access to formal banking services. Financial inclusion is highlighted as essential for integrating the economically marginalised into the mainstream and supporting the development of underserved communities.

Jan Dhan accounts are designed to be accessible, with no opening fees, maintenance charges, or minimum balance requirements. Over 67% of these accounts have been opened in rural areas, where financial services were previously limited. Additionally, account holders receive ₹200,000 (approximately US$2,450) in accident insurance cover.

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A study by the Bank for International Settlements in Switzerland commended the scheme, stating that without this initiative, it would have taken India 47 years to achieve 80% banking coverage among unbanked adults.