INTRODUCTION:
Even after 60 years of independence, a large section of Indian population still remains unbanked.
In the recent years the government and Reserve Bank of India has been pushing the concept and
idea of financial inclusion. The financial inclusion plan aims at providing easy access to financial
services to those sections of the society who are deprived of it so far at affordable cost thereby
bringing them into the mainstream of financial sector. RBI set up the Khan Commission in 2004
to look into financial inclusion and the recommendations of the commission were incorporated
into mid term review of the policy (2005-2006) and urged banks to review their existing
practices to align them with the objective of financial inclusion. Honorable Prime Minister
Narendra Modi announced Pradhan Mantri Jan Dhan Yojana scheme for comprehensive financial
inclusion on his first Independence Day speech on 15th August, 2014. The scheme was formally
launched on 28th August, 2014 with a target to provide universal access to banking facilities
starting with Basic banking accounts with overdraft facility of Rs. 5,000 after six months and
RuPay Debit Card with inbuilt accident insurance cover of Rs. 1 Lakh and RuPay Kisan card.
Pradhan Mantri Jan Dhan Yojana, is an ambitious scheme for comprehensive financial inclusion
launched by the Prime Minister of India, Narendra Modi on 28th August, 2014. He had
announced this scheme on his first Independence Day speech on 15th August, 2014. In a run up
to the formal launch of this scheme, the Prime Minister personally mailed to CEOs of all banks
to gear up for the gigantic task of enrolling over 6 crore (75 Million) households and to open
their accounts. In this email he categorically declared that a bank account for each household was
a “national priority”.
The scheme has been started with a target to provide universal access to banking facilities
starting with basic banking accounts with overdraft facility of Rs. 5,000 after six months and
RuPay Debit Card with inbuilt accident insurance cover of Rs. 1Lakh and RuPay Kisan card. In
the next phase, micro insurance and pension etc. will also be added. Reports said that, on 28th
August, more than 1.5 crore bank accounts were opened in a single day. The main objective of
this scheme is that easy financial services for the excluded section i.e. weaker sections and the
low income group. As per the scheme one could open an account in any bank branch or business
correspondent outlet with zero balance. The process of opening an account has been made easier.
It is an approach to bring about comprehensive financial inclusion of all households in the
country. The aim of the scheme is access to banking facilities, financial literacy and access to
credit, insurance and pension facility. Moreover, the beneficiaries would get RuPay Debit card
having inbuilt accident insurance covers of Rs. 1 Lakh. The plan also envisages channeling all
government benefits to the beneficiaries’ accounts and pushing the direct benefits transfer
scheme of the union government. Under this scheme the technological issues like poor
connectivity, on line transactions will be addressed. Mobile transactions through telecom
operators and their established centers as cash out points are also planned to be used for financial
inclusion.
Pradhan Mantri Jan Dhan Yojana (PMJDY) puts the financial inclusion efforts on the mission
mode. It is a comprehensive programme aiming at ensuring that the financially excluded people
can access to financial services, such as banking accounts, remittance, credit, insurance deposit
accounts and pension in an affordable manner. PMJDY accounts can be opened in any bank
branch or business correspondence (BC) (Bank Mitra), even with zero balance. However, if the
account holder requires a cheque book, she / he will have to meet the minimum balance criteria
laid down by the bank. PMJDY focuses on coverage of households as against the earlier plan
which focused on coverage of villages. It focuses on coverage of rural as well as urban areas.
Earlier plan targeted only villages above 2000 population while under PMJDY whole country is
to be covered by extending banking facilities in each sub services area consisting of 1000-1500
households such that facility is available to all within a reasonable distance say about 5 Km.
OBJECTIVES: MISSION MODE
PMJDY to be executed in the Mission Mode, envisages provision of affordable financial services
to all citizens within a reasonable distance. It comprises of the following six pillars:-
1. Universal access to banking facilities: Mapping of each district into Sub Service Area
(SSA) catering to 1000-1500 households in a manner that every habitation has access to
banking services within a th reasonable distance say 5 km by 14 August, 2015. Coverage
of parts of J&K, Himachal Pradesh, Uttarakhand, North East and the Left Wing
Extremism affected districts which have telecom connectivity and infrastructure
constraints would spill over to th the Phase II of the program (15 August, th 2015 to 15
August, 2018)
2. Providing Basic Banking Accounts with overdraft facility and RuPay Debit card to
all households: The effort would be to first cover all uncovered households with
banking facilities by August, 2015, by opening basic bank accounts. Account holder
would be provided a RuPay Debit Card. Facility of an overdraft to every basic banking
account holder would be considered after satisfactory operation / credit history of six
months.
3. Financial Literacy Programme: Financial literacy would be an integral part of the
Mission in order to let the beneficiaries make best use of the financial services being
made available to them.
4. Creation of Credit Guarantee Fund: Creation of a Credit Guarantee Fund would be to
cover the defaults in overdraft accounts.
5. Micro-Insurance: To provide micro- insurance to all willing and eligible th persons by
14 August, 2018, and then on an ongoing basis.
6. Unorganized sector Pension schemes like Swavalamban: By 14 August, 2018 and
then on an ongoing basis.
Under the mission, the first three pillars would be given thrust in the first year.
Financial Inclusion through PMJDY
Financial Inclusion efforts have seen the implementation of several schemes and policies. The
National Rural Financial Inclusion Plan (NRFIP) included identifying rural households who
don't have access to formal credit and then charting out a State Level Rural Financial Inclusion
Plan (SLRFIP) to allocate targets to different institutions like cooperative banks, NBFCs, MFIs,
etc. Another Financial inclusion plan of 2012 i.e. “Swabimaan” focused on opening „no-frills‟
accounts. However, only 20 percent of the bank accounts opened under this plan were
operational. Also, the plan only targeted villages having a population of more than 2000. Out of
nearly 6 lakh villages, only 74000 could be covered under this mission by March 2012. Also,
rural financing proved insufficient due to issues like high loan default incidence, high transaction
costs, absence of collateral, and lack of consumption-related financial products. (Singh, Gupta, &
Tandon, 2015) A study conducted in the Dharavi District of Mumbai concluded that the major
barriers to financial inclusion are lack of financial understanding or information, poor people’s
low income and erratic cash flow, lack of suitable products and processes from formal financial
service providers that cater to the needs of poor people. (Guntupalli, 2016)
As of September 2021, over 43 crore accounts have been opened under the scheme, with
deposits totaling around ₹1.55 lakh crore. PMJDY has brought millions of people into the formal
banking system, providing them access to credit, insurance, and government benefits.
The scheme has played a significant role in improving financial inclusion in India. It has created
millions of new bank accounts, particularly in rural areas, and has enabled account holders to
transact digitally. In addition, PMJDY has enabled the government to transfer subsidies and
benefits directly to beneficiaries' bank accounts. This has reduced leakages and delays and
contributed to government programs' overall efficiency. (mint 20 Oct 2023).
Since the launch of the scheme, around 28 crore bank accounts have been opened. Rural India
accounts for 16.75 crore and urban area for 11.09 crore bank accounts of the total bank accounts
opened under PMJDY, the largest number of bank accounts have been opened in Public sector
banks (around 22 crore), whereas number of accounts opened under private sector banks are less
than a crore. It is evidence of shallow penetration of private sector banks in rural areas. Out of
the total bank accounts opened, around 62% of the accounts are Aadhar-linked. The total balance
in PMJDY accounts is around Rs. 64,288 crore.
Since the inception of the scheme, the percentage of zero balance accounts has come down from
75 percent to 24 percent. The maximum percentage of nonoperative accounts stands with private
sector banks, whereas this percentage is lowest for public sector banks.
Impact of PMJDY
Economic empowerment is one of the most important parameters of overall empowerment. It
emphasizes breaking the vicious circle of poverty, reduction in vulnerability, enhancement in
resources available for utilization and diversification towards higher income activities (Bhaskar,
2017). An attempt has been made through this study to understand the impact of the PMJDY on
the economic empowerment of the beneficiaries. Maximum number of the account holders
‘strongly disagree’ with the view that their confidence has increased with the banking services
since the inception of PMJDY, while not even a single respondent ‘strongly agrees’ with this
view. The response of the majority of the account holders is not positive regarding proper
resolving of their credit needs. It is evident from the fact that not even a single PMJDY account
holder could manage to avail the overdraft facility. It is only in case of the view that banking
services provide more comfort for withdrawals, that majority of the respondents agree (11.8%
‘strongly agree’, while 54.4% ‘agree’). Micro insurance and pension are among the keyways to
achieve economic empowerment. However, as revealed by the findings of the survey, a dismally
low proportion of the respondents were aware of the major insurance and pension schemes like
PradhanMantriJeevanJyotiBimaYojana (PMJJBY) and Atal Pension Yojana (APY). (Dr.
Sukhvinder Singh, impact of pradhan mantri jan dhan yojana on financial inclusion).
Behaviour of the bank officials towards the customers has a great impact on the customers using
the formal banking services. There is a mixed opinion with regards to the question of help desk
spending time to provide manual assistance to the account holders in availing various
services.Only around 10 percent of the respondents were actually satisfied with the role played
by the Business Correspondents (BCs). The maximum dissatisfaction rate was in Sector 38-
West, where 81% of the respondents were not satisfied with the role played by the BCs.
Information asymmetry on part of BCs was cited as major reason for dissatisfaction.
WOMEN EMPOWERMENT BY PMJDY
Women's empowerment is the process of asserting their rights to equal opportunity in the
economic, cultural, social, and political domain and realising their full potential. This
improvement must be accompanied by their ability to affect the direction of social change
through their ability to make decisions both inside and beyond the home. Gender equality is a
value incorporated in the Indian Constitution. The Constitution not only guarantees women's
equality, but also authorises the government to take positive discrimination measures in their
favour to offset the cumulative socioeconomic and political disadvantages they suffer. Women
have the right to equal protection under the law and to not be discriminated against because of
their gender. Women's empowerment improves their ability to influence and contribute to a more
sustainable society. Empowerment opens up financial opportunities by allowing a woman to
work while also supporting her family. Women's empowerment may be ensured if there is no
discrimination in institutions, women receive equal quality education, there are no social
prohibition for women, and untraditional norms are reduced. It plays a crucial part in the
development of a sustainable society.
Women Empowerment is high on the agenda of the development framework. Even though,
women make significant contributions in the economy, yet they gain disproportionately low on
return as they do not have control over resources, savings and borrowings from the banks.
Financial Inclusion (FI) is a global phenomenon that is about connecting every individual with
access and usage of a wide range of financial products and services at affordable costs. The
government’s focus on providing banking to unbanked will positively boost the household at the
lower segment of the society. In this direction, “Pradhan Mantri Jan Dhan Yojana” is a large-
scale financial inclusion initiative introduced by India's Prime Minister, Narendra Modi, on
August 28, 2014, contributing to the achievement of Sustainable Development Goals (SDGs).
In this background, the thesis investigates the trajectory of women empowerment through
financial inclusion in urban slums of Ludhiana and Patna and own bank account under PJD. The
data was gathered from 1,140 women in slums through a structured schedule on a five-point
Likert scale. The schedule was pretested and validated using reliability and validity tests. The
exploratory and confirmatory factor analysis were performed to validate the questions. The first
objective of the thesis was to identify the extent of Financial Inclusion which was measured
through Financial Inclusion Index (FII). The FII is a two-dimensional index that categorised the
scores of women in slums into high, medium and low financial inclusion categories. The first
dimension of FII is the usage of banking services and the second dimension is the subscription of
financial products. This thesis showed that 61 per cent of total females in both cities lie in the
low financial inclusion category. By explaining further, after categorising the women into
different categories of Financial Inclusion, its impact on their Economic Empowerment was
examined using Linear Regression by using dummy variable for it. The results of regression
model indicated that the relationship was significant and fit well with FII. Finally, the dimensions
of women empowerment i.e. Economic, Social and Political were separately discussed. The
impact of women’s Economic Empowerment on their Social and Political Empowerment was
analysed using Linear Regression. The results showed that the effects of Economic
Empowerment on Social and Political Empowerment is significant.
The result indicated that PMJDY scheme has been quite successful especially in case of women
in slums and has a positive influence on social, political, and economic dimensions of women
empowerment. The study contributes to existing literature by advancing the debate on women in
urban slums and identifies the substantial need for the development of formal financial system to
enhance the scale of financial inclusion.
Scheme Details and Benefits Eligibility
• Accidental insurance cover of ₹ 0.2 million
• All citizen of India with valid
• Life cover of ₹ 30,000
PMJDY launched in proofs
• Overdraft facility up to ₹ 10,000 to preferably
2014 • Preference is given to female of
lady of the household
household
• RuPay ATM-cum-Debit Card
