Nine years after its launch, Jan Dhan still going strong; 31.5 million accounts added in FY24 so far

The no-frills Pradhan Mantri Jan Dhan Yojana (PMJDY) bank accounts with an accumulated Rs 2.21 trillion cash balance, continue to rise steadily even nine years after its launch.

As many as 31.5 million new PMJDY accounts were opened till February 14 in FY24, taking the cumulative PMJDY accounts 518 million, which officials said are near saturation level.

PMJDY was launched on August 28, 2014, to provide universal banking services by opening a zero-balance bank account for every unbanked household. The main features of the scheme include one basic savings bank deposit (BSBD) account for every unbanked adult, an overdraft (OD) limit of Rs 10,000 and a free RuPay debit card with inbuilt accident insurance cover of up to Rs 2,00,000.

Despite the number of accounts rising from 147.2 million in FY25 to 518 million so far, the deposit per account has continued its upward journey from Rs 1,065 in March 205 to Rs 4,264 now, a growth of four times.

Even though it was anticipated that the accounts were largely opened to get government benefits, the accounts have been a source of a large pool of low-cost funds for public sector banks. As per the latest data, PMJDY’s balance with the State Bank of India was at Rs 54,577 crore, followed by Bank of Baroda at Rs 30,123 crore and Punjab National Bank at Rs 21,320 crore. Public sector banks and regional rural banks sponsored by them account for 97% of the total PMJDY balance of Rs 2.21 trillion.

In terms of the incremental deposits, fresh accretion has been around Rs 22,000 crore so far in the current financial year. Incremental deposit accumulation was Rs 32,385 crore in FY23 and Rs 20,908 crore in FY22.

The JAM Trinity – Jan Dhan, Aadhaar, mobile – has stood the government in good stead in implementing large-scale, technology-enabled and real-time direct benefit transfers (DBTs) to improve the welfare of the low-income category people, especially during Covid.

Transfer of assorted subsidies and sops to the beneficiaries through DBT resulted in savings of Rs 2.73 trillion between FY15 and FY22.

Zero-balance bank accounts in PMJDY have declined to just 8% of the total now compared to 58% when the financial inclusion mission was rolled out nine years ago to provide basic banking facilities to the large unbanked population of the country.

There is no requirement to maintain any minimum balance in PMJDY accounts. Deposits in such accounts earn interest of 3-4%.