Financial literacy serves as the cornerstone of economic, social, and psychological security, acting as a catalyst for financial inclusion. The Reserve Bank of India’s Financial Inclusion Index (FI Index) has shown notable improvement, reaching 60.1 in March 2023 compared with 56.4 in March 2022. A significant contributor to this progress is the Prime Minister’s Jan Dhan Yojana (PMJDY), a pioneering initiative aimed at universal banking access by providing zero-balance bank accounts to unbanked households. It has helped bring over 50 crore people into the formal banking system.

The number of bank accounts under PMJDY has grown substantially from 14.72 crore in March 2015 to 50.99 crore by November 2023 (as on November 30).

About 34.63 crore RuPay cards have been issued to these accounts with in-built accident insurance cover for ₹2 lakh.

With 55.5 per cent of accounts opened by women and 67 per cent in rural/semi-urban areas, PMJDY has facilitated income-generating activities and increased ownership of financial assets among women. The accounts have become pivotal in implementing people-centric initiatives like Direct Benefits Transfer (DBT).

Also, PMJDY offers life and accident coverage through schemes like Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY), contributing to the inclusive growth of rural and underprivileged sections. The success of UPI and digital transactions is closely linked to the widespread adoption of PMJDY accounts.

NABARD has been a pioneer in driving technology implementation in cooperative banks to bring them on a par with commercial banks. It has played a pivotal role in advancing both technical and financial support to cooperative banks for establishing robust Core Banking Solutions (CBS) systems since 2012.

This initiative ensures that these banks are equipped with IT security, fraud management, cyber security operations centres, and various other technological enhancements.

Financial literacy

NABARD promotes financial inclusion through initiatives like financial and digital literacy camps conducted in remote areas. The support extends to technologies like micro-ATMs, point of sale (POS) systems, kiosk banking outlets, BHIM app integration, Bharat Bill Payment System (BBPS), and Public Financial Management System (PFMS). The RBI’s National Strategy for Financial Inclusion (NSFI-2019-24) involves implementing the Centre for Financial Literacy (CFL) scheme across the country, aiming for one CFL per 2-3 blocks.

Currently, 1,600 CFLs operate nationwide. Rural connectivity challenges are being addressed through the BharatNet project, a mega project by the government of India. As many as 207,348 Gram Panchayats have been connected so far under this initiative, laying 668,144 km of optical fibre cable, and establishing 761,312 fibre-to-the-home connections and 104,675 Wi-Fi hotspots. Infrastructure support is being extended to banking touchpoints.

The FI Index has shown a positive trend. With ongoing efforts, the index is expected to continue its upward trajectory, reflecting increased financial inclusion in rural areas.

The writer is Chief General Manager, NABARD, Mumbai. Views are personal

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