Is Modi’s Jan-Dhan Yojana really working? Here’s reality check by World Bank

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Updated: Apr 23, 2018 3:37 PM

80% adult Indians now have bank accounts -- and India could achieve this tremendous growth due to Prime Minister Narendra Modi's Jan-Dhan Yojana and Aadhaar. Is this success only on paper?

Is Modi's Jan-Dhan Yojana really working? Here's reality check by World BankAlmost half of the account owners in India have an account that remained inactive in the past year. (Image: PTI)

80% adult Indians now have bank accounts — and India could achieve this tremendous growth due to Prime Minister Narendra Modi’s Jan-Dhan Yojana and Aadhaar. But the question that has really popped up is if Jan-Dhan Yojana’s success is only on paper. In the same Global Findex Database report, in which the World Bank said that 80% of adult Indians have bank accounts, also said that almost half of the account owners have an account that remained inactive in the past year — highest in the world.

“100 million adults with an inactive account have a debit card, while nearly 2.5 times as many — 240 million — have an inactive account plus a mobile phone,” the World Bank said. In India the share of adults with an account
has more than doubled since 2011, to 80% due to Jan-Dhan Yojana, however, the World Bank said, many of whom (Jan-Dhan account holders) might not yet have had an opportunity to use their new account.

“In India, the share (of inactive account) is 48% —the highest in the world and about twice the average of 25%
for developing economies,” the World Bank added.

(Data: World Bank)

Among all inactive accounts, gender too had a role to play. The World Bank found that female account owners are on average 5 percentage points more likely than male account owners to have an inactive account. “In India, this gender gap is about twice as large: while 54 percent of women with an account reported having made no deposit or withdrawal in the past year, only 43 percent of men with an account did so,” the World Bank said. It also noted that despite Jan-Dhan Yojna 1.9 million adults are yet to have a bank account.

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