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43 Crore beneficiaries under PMJDY

As India celebrates its 75th Independence Day, nearly 43 crore poor beneficiaries have a basic bank account, thanks to the Centre's flagship financial inclusion scheme - Pradhan Mantri Jan Dhan Yojana (PMJDY). The scheme, announced by Prime Minister Narendra Modi in August 2014, has dispelled initial apprehensions on its efficacy and proved to be a steady vehicle for financial inclusion.

As per the latest government data, PMJDY now has 42.89 crore beneficiaries (basic bank account holders) with Rs. 1,43,834 crore total balance.More than half of them are women (23.76 crore), while 28.57 crore is from rural and semi-urban areas.


On the impact of the scheme so far, D Janakiram, Director, Institute for Development and Research in Banking Technology (IDRBT), an arm of the RBI, said, "PMIDY has done extremely well so far... The massive financial inclusion achieved by the scheme is unparalleled.

A senior State Bank of India official said the average balance in the accounts, which is in the Rs. 3,000-3,500 range across banks, which is an indication that the scheme has now become a channel for savings for low-income families.

"The total deposit balance of Rs. 1.43-lakh crore is actually a huge amount. Our studies. have shown that a good number of these accounts are being regularly used," Prasanna Tantri, Executive Director, Center For Analytical Finance, Indian School of Business (ISB) said.


The Global Findex database of the World Bank has also shown a 'substantial' increase in financial inclusion in the country after 2014. As per the index, 80 per cent of people above 15 years of age in the lower-middle-income group have a bank account now compared to 53 per cent in 2014. While the contribution of PMJDY has been well recognised, there is also a need to scale up to the next level, say experts.

"Going forward, we should move from financial inclusion to financial empowerment by providing credit. The PMJDY should become PM Jan Dhan Vridhi with universal access to bank credit to the most underprivileged sections of our society," the IDRBT chief said.

It would also need a model of credit history, which will require a reduction in cash transactions and moving to digital transactions and building credit models using artificial intelligence/ machine learning techniques, he added. "We should think of building India's next-generation digital financial infrastructure focusing on these needs and to reduce per transaction cost as well as the cost of maintaining these accounts," Janakiram said.

According to Tantri, there is a need to build up a database to capture the income, transaction history of the Jan Dhan account holders on the basis of which credit delivery models can be worked out. "As of now, we have only aggregate data. Banks and fintechs can do further data analysis to create a new database," he added.


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