The 2011 Census had thrown startling results: of the 25 crore households that India reported, less than 59 per cent were serviced by banks of which around 54 per cent in the rural areas had access to banking service in sharp contrast to urban India with a coverage of 67.8 per cent. Evidentially, the unbanked numbers were large and an impediment to growth.

Launched in 2014, the Pradhan Mantri Jan Dhan Yojana (PMJDY) offered universal banking services by creating zero-balance bank accounts. The scheme provides accident coverage of up to ₹1 lakh. For PMJDY accounts opened after August 28, 2018, this coverage has risen from ₹1 lakh to ₹2 lakh.

Over time, these perks have expanded, with RuPay cardholders now enjoying increased complimentary accidental insurance coverage. Within the PMJDY system, around 34 crore RuPay cards have been distributed to Jan-Dhan accounts, all without any associated fees so far. These RuPay cards also offer a safety net of ₹2 lakh in accident insurance coverage.

The Jan Dhan Yojana worked well and currently over 50 crore beneficiaries are covered with the urban-rural gap narrowing. What is also significant is that the inoperative accounts are less than 20 per cent indicating that Indians have adopted banking very comfortably.

In this, the Reserve Bank of India played a key role in identifying six strategic objectives for financial inclusion including, universal access to financial services and providing basic bouquet of financial services and strengthening of digital financial services.

PSBs take the lead

The public sector banks took the lead in this effort duly supported by the other banking networks. An exponential growth in the access to low-cost internet services and mobile telephony also assisted the entire effort. As on date, the PSBs have covered over 24.55 crore beneficiaries in rural/semi urban areas with the RRBs supporting the effort by covering over 7 crore.

This was made possible by using the services of the Bank Mitras along with other modes. Adequate awareness was created in the rural areas and the DBT assisted the process with targeted beneficiaries being conscious that a bank account aids in fast tracking their government releases.

As on August 2023, of the 50.09 crore beneficiaries, the PSBs have covered 39.16 crore, the RRBs 9.31 crore, the private sector banks 1.43 crore. The overall number of female beneficiaries stands at 27.82 crore and overall deposits in the Jan Dhan accounts stands at ₹2,03,505 crore (as against deposits of ₹25,913.55 crore in August 2015).

Are we therefore looking at a banked India with more household savings? Is it possible that with more women having access to banking services, the savings are increasing especially with the newer investment friendly targeted options such as the Sukanya Samriddhi Yojana and Mahila Samman Savings Certificate 2023? Data will gradually emerge to bolster such conclusions with the possibility being bright of such a trend.

Yet, no amount of financial inclusion is complete without adequate access to insurance and pension services. Similarly, financial literacy plays an important role in the making of financial choices by an individual.

Much work requires to be done in this direction and there exists a case for developing special education modules for target audience (children, entrepreneurs, seniors etc.). Financial literacy needs to commence from childhood as this leads to ease of understanding, independence of decision making and comfort in financial matters.

In an age where cyber crimes are rising, this bears even greater relevance. With increased banking access, for higher consumer engagement and safer banking, we need to work from awareness to right-to-product-choice to safety to consumer-grievance-redressal-with-ease.

Das is Policy expert and former civil servant; Sridharan is author, Policy Researcher & Corporate advisor