The access and usage of a varied range of affordable and quality financial services in a simple yet controlled manner by the low income sections of society is what is called financial inclusion. India holds the second position on the list of world’s fastest growing economies; and has a major section of the population that falls in rural category. Even long after India’s independence, a large population of the country did not own a bank account. The PM of India, on August 15, announced the Pradhan Mantri Jan-Dhan Yojana, a national mission of financial inclusion in the country. The mission is said to play a key role in the economic development of the country. A bank account for every Indian is the key feature of the mission. “I wish to connect the poorest citizens of the country with the facility of bank accounts,” said Prime Minister, Modi. “There are millions of families who have mobile phones, but no bank accounts. We have to change this. The change will commence from this point,” he said.


P.M Modi


Earlier PMs had similar announcements—Indira Gandhi started a campaign against poverty, Manmohan Singh started a campaign against unemployment—but none of the campaigns survived for long. PM Modi’s program was very promising and enticed a large number of the country’s population.

The mission was officially launched on 28 August across India. “It is the end of financial untouchability,” Modi said. “It is the beginning of freedom from poverty.” It made all the country banks were work overtime to get all the necessary things in place. More than 15 million accounts were taken on this day. A huge number of camps were set up to help people fill in the details to get their accounts. It is not just owning an account feature of the scheme that coaxed a huge population to open a personal bank account but other features like each account holder would get a RuPay debit card launched by the RBI (Reserve Bank of India), an accident insurance of INR 100,000 and a life insurance of INR 30,000 for those opening their accounts before 26, January. “Never before in economic history have 15 million bank accounts been opened in a single day,” said Modi. “Never before have insurance companies issued 15 million accident policies in a single day. Never before has the government of India organized a program of such scale — over 77,000 locations — with the participation of so many chief ministers, union ministers, and government and bank officials.”

There have been three most important needs to launch the program as the policy makers shared.

  • Creating a way to instill the habit of saving money – The lower section of our society has been facing problems due to lack of savings that may be of use during the hard times. Having personal accounts will promote the rural people to save money in banks rather than using the traditional modes of money saving like putting their savings in lands or borrowing from moneylenders.
  • Providing credit channels – The unbanked population has always depended on friends, families and neighbours for credits to put into their work. The scheme offers a formal credit channel that allows each account holder to get money easily. This would further lead itself to the increase in outputs and growth in the economy.
  • Bridging gaps in public subsidy and welfare programs – There is a sum of money in the country that is meant for the poorest section of the society. It fails to reach the true receivers as there is somewhere a leakage in the line. Having a personal bank account will ensure that the money is transferred directly to each beneficiary that too on time and without any chances of leakage.
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