If bank account penetration is the indicator to go by, then the Pradhan Mantri Jan Dhan Yojana is quite the success—over 12.5 crore new accounts have been opened so far. How significant that is can be gauged from the fact that at the end of 2013, despite all earlier attempts to drive up financial inclusion, the total number of bank accounts in India was under 40 crore. The World Bank estimates that bank account penetration increased from 35% to 53% between 2011 and 2014. To put the India figure in perspective, between 2011 and 2014, globally, 70 crore adults had opened bank accounts.
However, what takes the sheen off India’s efforts to promote financial inclusion is that 43% of the country’s bank accounts are dormant with 72% showing zero balance. India alone made for 19.5 crore dormant accounts of the global 46 crore. While this dormancy could be because of a host of reasons—the lack of even basic financial literacy among the account-holders, for instance—the government moving to Aadhaar-based direct benefit transfers (DBT) to bank accounts for most subsidies targeted at the beneficiaries of the Jan Dhan Yojana would best take care of the problem. There would be an incentive for the account-holders to keep the account functional.