Financial inclusion as defined by GoI is “the process of ensuring access to financial services and timely adequate credit when needed by vulnerable groups such as weaker sections and low income groups at an affordable cost”.
Dimensions of financial inclusion are bank penetration, credit penetration, deposit penetration for which PradhanMantri Jan-DhanYojana (PMJDY)is a major initiative.
PMJDY which is a National Mission on Financial Inclusion encompasses an integrated approach to bring about comprehensive financial inclusion of all the households in the country. It ensures financial inclusion by:
• Providing universal access to banking facilities: It envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension facility basically through zero balance accounts.
• Facilitates people to get used to banking services: RuPay Debit card having inbuilt accident insurance cover of र 1 lakh. Also, channeling all Government benefits via DBT for Kerosene, LPG, and fertilizer subsidy ; establishment of centres as Cash Out Points helps in furthering financial inclusion.
• Furthers credit penetration: By providing a zero balance account, it allows for greater credit penetration to hitherto unbanked individuals. Use of Use of Kisan Credit Card, rupee card through Jan Dhan account shall facilitate credit and loan facility at affordable cost. Also crediting pension to account will further help in inclusion of financial services for poor.
Though opening More than 1.5 crore bank accounts were opened on the first day itself speaks of its success, World Bank study points to the fact that more than 43% of bank account in Indian Banking system are dormant and the during the recent demonitisation initiative they have been used as hiding place for the black money. There is low deposit penetration as well.
Thus along with opening of accounts, there is need to ensure that such accounts don’t become dormant with the time. Ensuring DBT through Jhandhan account, promoting cashless payment system, increasing financial literacy, promoting awareness through civil society participation to inculcate bankinghabits, would help in achieving the desired outcome of PMJDY.
