The Pradhan Mantri Jan Dhan Yojana (PMJDY) has attracted considerable media attention. The political capital behind this scheme, the insurance coverage and the overdraft facility offered?all have propelled the scheme to a launch coverage of a whopping over-10 million accounts, with a goal of 100 million accounts by January, 2015.

In 2006, the government of India directed all the state governments to select one district each for piloting ?100% financial inclusion?. The Himachal Pradesh government, together with banks, decided that rather than starting with just one, the programme was to be implemented simultaneously in all districts.

The lead banks of each district were to coordinate with the district administration. All banks were made responsible for their respective ?service areas? in each district. The state finance secretary became the mission driver for overall implementation. A state-level committee was formed along with the lead banks of each district and the relevant regional rural banks/cooperative banks with sizeable presence in the remote areas.

The mission went through three phases. In the first phase, the banks were incredulous, not believing that they would be able to reach out to all the households in the 16,000+ villages in hilly Himachal as most of these had no nearby bank branch. Still, the mapping exercise was carried out with the help of district administrations to list all households without bank accounts.

The cooperative/regional rural banks were initially tapped to open accounts aggressively. With the monitoring system reflecting the initial gains and full administrative support at the state/district/tehsil levels, officials of public sector banks got convinced that 100% financial inclusion was achievable. Soon, the mission outcomes were soaring.

The third phase of the mission was more trying. The low-hanging fruits had all been plucked. The programme was now in the ?mop up? phase. While 90% coverage had been achieved, netting the remaining 10% households was an uphill and arduous task. The district magistrates were motivated to supervise the outreach campaigns in the so-called difficult areas. Local governments officials were pressed to coordinate with the local bank officials. Then, there were rumours that the government of the day had started this account-opening exercise so that it could ?buy? votes by transferring some cash into these no-frills accounts. These rumours helped in the mop-up process, though!

As the 100% coverage target seemed within reach for the entire state, the motivation levels soared again. By mid-2007, the state was able to declare 100% financial inclusion and invited RBI to have an independent evaluation conducted. The RBI study validated the state’s claim and the administration slipped seamlessly into working towards realising the next goal?of ensuring overdraft facilities through kisan credit cards for eligible farming households.

A few months after the 100% fiancial inclusion had been achieved in the state, the then deputy chairman of the Planning Commission, who was in Shimla, was informed by the then CM about the Himachal’s success. He was pleasantly surprised and wryly admitted of having no information of this made available to him by the Commission’s officials. Remarking how these officials always came to him with bad news, he said, tongue firmly in cheek, that this was a classic case of ?how bad news always travels much faster than good news.?

Now, when the nation and media is exulting over the financial inclusion steps, I do not see even one report mentioning that Himachal Pradesh was the first state in the country to have achieved financial inclusion, more than seven years ago?and what’s more, it also remains the only such state!

Many no-frills banking accounts go dormant, if there is no direct benefit transfers to these accounts. The implementation team of the PMJDY must ensure that these accounts remain active?through direct wage transfers under the rural employment guarantee scheme or old age/widow pensions and other benefits. Even the food and fertiliser subsidies could be remitted as direct benefit transfers to these bank accounts.

For this to happen, the beneficiary cannot be held hostage to distant bank branches increasing her transaction costs. Mobile banking/business correspondents have to facilitate inclusion for her. To bring banking to the reach of the ?financial untouchables?, in 5 lakh unbanked villages, efforts must be mounted to convert the post office network into partial banking institutions, backed by the ease of core banking solutions and RuPay debit cards. The ATMs of post offices vulnerable to power outages must have solar power systems with support from the National Solar Mission.

The author is an IAS officer and former finance secretary of Himachal Pradesh. Views expressed are personal