Status of PMJDY in India: A Move for Financial Inclusion

The term financial inclusion may be defined as an invitation for access to financial services at very economic terms to a big part of India categorized as disadvantaged group due to their low earning/income. ―Even after 60 years of independence, a large section of Indian population remains unbanked. This malaise has led generation of financial instability and pauperism among the lower income group who do not have access to financial products and services. However, in the recent years the government and Reserve Bank of India has been pushing the concept and idea of financial inclusion.‖ PMJDY scheme was launched by our Honourable Prime Minister Shri Narender Modi on Aaugust 28, 2014 which can be termed as the biggest initiative of financial inclusion in the world history with its gigantic significance for the citizens of India. This scheme is an Indian government initiative towards financial inclusion for ensuring economic as well as convenient access to financial services. Such financial services encompass banking accounts (saving as well as deposit accounts), insurance, remittance, pension and credit facility. Such accounts

can be opened in any branch of bank or through Bank Mitra outlet (business correspondent selected for the scheme purpose). Even the facility for accounts with zero balance has been provided in this scheme. The aim behind the scheme imagines global entree to banking services with minimum one basic banking account for each household, pension facility, insurance facility, remittance facility, credit facility as well as financial literacy. All the accountholders will get Rupay debit card having facility for inbuilt insurance cover in case of accidents upto Rs.1,00,000. All the schemes offered by the government (whether it is state government, central government or local government authorities) will be linked through DBT (direct benefit transfer) with this scheme. It is planned to use the telecom operators as well as their authorized and established centres through their mobile transactions under this scheme for achieving financial inclusion.

• Interest on Deposited money

• There is no requirement of minimum balance in these accounts. • Life Insurance Coverage up to Rs. 30000 but will be provided in case of death of beneficiary as well as on fulfillment of eligibility conditions. • Facility of overdraft upto Rs. 5000 to only one accountholder in the household preferable to female candidate in case of successful operation of the account for 6 month as well as satisfactory credit history under this account. • Transfer of money across India is very easy under the scheme.

Raval (2015) studied about the financial inclusion as well as PMJDY scheme‘s objectives, prospects and achievement in India. According to Dr. Rawal, six pillars of PMJDY included : access to banking facilities universally, banking accounts with the facility of overdraft and Rupay debit card per household, program for financial literacy, credit guarantee fund creation, pension scheme specially for unorganized scheme as well as micro insurance. The researcher concluded throughout the study that the coverage of excluded segment is possible only with the participation of people as well as private sector involvement, not merely by policy making. Narayana et. al. (2016) throughout their combined study entitled as ―A study on financial inclusion initiatives and challenges in India with reference to PMJDY‖ focused on studying the implementation, performance and challenges as well. It was a exploratory cum descriptive study based on secondary data. The researchers found out that there was a continuous increasing trend among rural as well as urban people for participation in financial services through banking industry. They concluded that service delivery was still the real challenge and to meet this as well to fuel the PMJDY, the Postal department must be given an opportunity for a license of full banking as Postal department has largest coverage in India. Joshi (2016) aimed his study to analyze the moving trends in financial inclusion programme with reference to PMJDY. The researcher found out PMJDY a milestone for financial inclusion in India but also concluded that the whole scheme may be prove a wasteful work if it leads to accounts duplication, no Bhatia & Sharma (2015) attempted to know the impact of PMJDY, uniqueness of PMJDY scheme as well as steps taken by bank of bankers to improve the level of financial inclusion. The researchers stated that opening of no frill account, relaxation in KYC (know your customer) norms, engaging BC‘s (Business correspondent‘s), ICT (Information and communication technology), EBT (Electronic benefit transfer) adoption, credit cards facility, simplification of branch authorization, to overcome the language barriers, three year plan meant for financial inclusion as well as financial literacy were the moves adopted by RBI in the direction of financial inclusion. They concluded out that EBT as well as DBT (Direct benefit transfer) were the proposed pillars with attaching all the monetary or equivalent to monetary benefits provided by the government bodies for properly executing the scheme.

This research paper covers the following objectives: 1. To study present status of PMJDY in India. 2. To find out challenges in the roadmap of PMJDY in India. 3. To give some suggestions for the better functioning of the scheme.

As it is clear from the above table 1.1 that in India upto November 30, 2016 totally 24,98,38,787 accounts has been opened (including rural as well as urban accounts) and 74321.56 crore rupees has been deposited in these PMJDY accounts. Out of these accounts 13,95,45,415 accounts has been seeded with Aadhaar cards and in these accounts 5,89,14,748 accounts are Zero balance accounts. Out of total PMJDY accountholders, Rupay debit cards has been issued to 19,35,62,832 accountholders up to data realisation date (November30,2016)

Interpretation:- As it is clear from the above table that 100 percent coverage has been made in all states/union territories in terms of household coverage which were allotted for each state/UT respectively except Jammu and Kashmir, Rajasthan, Nagaland, Manipur, Assam, Odisha, Chhattisgarh and Karnataka (with more than 99 percent coverage). In terms of wards covered, almost each state has accomplished its target except only two states that are Maharashtra and Chhattisgarh. There are 59 wards in Chhattisgarh state and 4 wards in Maharashtra state which still remains pending (up to November 30, 2016) to be covered within near future.

Here are some challenges as written below which can be termed as obstacles in the roadmap of PMJDY scheme in India:- ► In PMJDY new account opened in India but transactions are not so much. ► Lack of awareness among people especially to the rural people who are illiterate. ► There is great variation among the number of branches in rural parts as compared to urban parts.

► Lack of saving habit among masses is still a big issue to be resolved. ► People are not so aware about the investment opportunities which also create hindrance in scheme fulfilment. ► Access to banking facilities in more than one bank misguides government authorities with wrong information. ► Inadequate proper infrastructure problems like electricity, internet facilities etc. in various regions of India is also a big hindrance in the way of scheme. ► Sometimes, bank staff‘s behavior is found to be not as energetic as required to welcome the potential accounts opener.

Based upon the challenges in the roadmap as well as findings of the PMJDY as well as the literature available on the issue, following considerable suggestions may be of immense importance:- ■ Efforts are demanded from the government officials to motivate the accountholders to make routine transactions as well as savings through their PMJDY account. ■ Illiterate people need to be aware through simplest as well as convenient means that seems trustworthy to them especially for the investment opportunities considerable nearby them. ■ More and more branches must be opened in the rural area having atleast one branch in one village and if population in very much then more than one branch will not be futile. ■ KVS norms need further some relaxation especially in undeveloped and least educated areas. ■ People must provide authentic as well realistic information about their accounts as well as other information regarding their bank accounts necessary to government official so as to guide government in proper policy formulation. ■ Basic infrastructure demands huge investment from government with participation of private entrepreneurs as well as people. ■ Connect more and more youth, private ‗Bank Mitra‘ as well as Postal department of India for the timely achievement of the scheme.

■ The whole study is based upon secondary data. ■ Authenticity of the results/findings depends on the authenticity of the retrieved data from the sites taken into account. ■ As the census 2011 data has been taken into consideration while the PMJDY data belongs to year 2016. So there may be time variation. ■ Lack of financial resources restricts the study up to secondary sources.

1. http://pmjdy.gov.in/files/E-Documents/PMJDY_BROCHURE_ENG.pdf retrieved as on December 1, 2016 at 9:29 am 2. http://pmjdy.gov.in/scheme retrieved as on December 2, 2016 at 10:00 am 3. Raval, Hiren R. (May 2016). ―Shaping new India through financial inclusion in the form of PMJDY‖. International Journal of Research in Humanities and Social Science. Volume - 3, Issue -5, ISSN: (P) 2347 – 5404, pp. 34 – 38. Doi: http://raijmr.com/wp-content/uploads/2015/08/9_34-38-Dr.-Hiren-R.-Raval.pdf (2016). ―A Study on Financial Inclusion Initiative and Challenges in India with reference to PMJDY‖. IRA – International Journal of Management and Social Science. Volume – 3, Issue – 3, ISSN 2455 – 2267, pp. 652 – 659. DOI: http://www.research-advances.org/index.php/RAJMSS/article/view/250/260 5. Joshi, M.K. (March 2016). ―Pradhan Mantri Jan Dhan Yojana (Pmjdy) : A Leap towards Financial Inclusion in India‖. Paripex – Indian Journal of Research. Volume – 5, Issue – 3, ISSN 2250 – 1991, pp 358 – 359. Doi: https://scholar.google.co.in/scholar?hl=en&q=paper+on+pmjdy&oq=pa

9. www.pmjdy.gov.in 10. Kothari, C.R. (1992). ―Research Methodology Methods & Techniques‖, New Delhi, Wiley Eastern Ltd.

Extension Lecturer, Govt. College, Narwana