The average deposit per account under Pradhan Mantri Jan Dhan Yojana (PMJDY)—a financial inclusion programme launched by Prime Minister Narendra Modi in August 2014– increased 118 percent from Rs 795 in September 2014 to Rs 1,735 in May 2016, according to IndiaSpend analysis of government data.
PMJDY accounts quadrupled (increased by 308 percent), from 53 million in September 2014 to 219 million in May 2016, while the proportion of accounts with no money in them–zero-balance accounts, as they are called–declined from 76 percent in 2014 to 25.7 percent in 2016.
This indicates that more Indians are being included in the formal financial system, and they are willing to keep their earnings in Jan Dhan accounts, along with payments coming in directly to those accounts from the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and subsidy for liquefied petroleum gas (LPG).
PMJDY deposits increased nearly eight-fold (790 percent), from Rs 4,273 crore in September 2014 to Rs 38,048 crore in May 2016.
However, the average deposit in accounts apart from those with no money (zero-balance accounts) declined 32 percent– from Rs 3,427 to Rs 2,333 over the same period– showing that new account holders are putting in less money into their bank accounts than they did.
Dr Pande said people were proud to have an identity.
As subsidy payments through bank accounts rise, fewer accounts will be unused
Zero-balance accounts will decline as subsidy payments increase, said Ghosh.
In 2015-16, the government transferred Rs 61,824 crore ($10 billion) to 310 million beneficiaries of 59 central schemes, such as National Social Assistance Programme, Post Matric Scholarship For Scheduled Tribe, Fellowship Schemes of All India Council for Technical Education and Janani Suraksha Yojana.
India created financial history opening 18 million bank accounts in a week (between August 23 and 29 August, 2014), setting a Guinness World Record.
The island territory of Lakshadweep has the maximum average deposit per account, Rs 8,824, and the maximum average deposit per non-zero-balance account—Rs 12,540.
Mizoram has the least average deposit per account, Rs 646, and the least average deposit per non-zero-balance account—Rs 998.
Jammu and Kashmir had the largest proportion of zero-balance accounts, 41.5 percent, on May 25, 2016, followed by Chhattisgarh (38 percent), Nagaland (36.4 percent), Andaman and Nicobar Islands (35.3 percent) and Mizoram (35.2 percent).
Chandigarh has the least zero-balance accounts, 13.9 percent, followed by Himachal Pradesh (14.6 percent), Tripura (15 percent), Goa (16.3 percent) and Punjab (17.5 percent).
About 40 percent of India’s population is now outside the purview of formal banking.
Only 145 million households (58.7 percent) of 247 million in the country had access to banking services, according to Census 2011; 91 million rural households used the banking system, as did 53 million urban households.
As many as 219.3 million PMJDY accounts were opened as on May 25, 2016; 134.7 million are rural and 84.6 million are urban accounts.
(Published in an arrangement with IndiaSpend)
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