The ‘Jan Dhan’ Journey

On August 28, 2014, the Government of India launched one of the most ambitious financial inclusion schemes globally, the Pradhan Mantri Jan Dhan Yojana (PMJDY). Nearly eleven years later, the scheme has become a milestone in transforming citizens’ relationships with the financial system.

What began as an initiative to bring every Indian household into the banking network has evolved into a foundation for a digitally empowered and inclusive economy. Reflecting on achievements, identifying persisting gaps, and determining the future roadmap is crucial.

Vision behind Jan Dhan

Financial exclusion has long been a significant barrier to poverty alleviation in India. Millions of citizens, particularly from rural areas, women, and marginalised communities, were excluded from formal banking systems. This led to heavy reliance on informal moneylenders, exorbitant interest rates, and debt cycles.

The Jan Dhan Yojana aimed to break this barrier by providing every household with access to a basic bank account, RuPay debit card, insurance, and banking services beyond branch and ATM locations in rural areas through Bank Mitras, as well as credit facilities. The scheme allowed accounts to be opened with zero balance, enabling the poorest individuals to join the banking system. By linking these accounts to Aadhaar and mobile numbers, the government created the JAM Trinity — Jan Dhan, Aadhaar, and Mobile — which became the backbone of direct benefit transfers and digital governance in India.

Expanding the Financial Net

PMJDY has undeniably expanded the reach of India’s financial system. As of mid-2025, over 520 million bank accounts have been opened under the scheme, with total deposits crossing Rs 2.2 lakh crore. The scale itself is unprecedented: the World Bank has recognised PMJDY as the world’s largest financial inclusion initiative. Notably, the scheme has significantly reduced the percentage of unbanked adults, lowering it from over 40 per cent in 2011 to under 20 per cent today.

Over 56 crore bank accounts have been opened, covering almost every household. Notably, 56 per cent are held by women, highlighting progress in gender inclusion. Deposits have crossed Rs 2.5 lakh crore, reflecting rising trust in formal banking. Even Guinness World Records has recognised the achievements made under the Pradhan Mantri Jan Dhan Yojana, which opened the largest number of bank accounts in one week as part of the financial inclusion campaign.

The PMJDY’s integration with Aadhaar and UPI has enabled direct benefit transfers, reducing leakages and ensuring timely cash support, particularly during the COVID-19 pandemic. With UPI crossing 14 billion transactions in July 2025, Jan Dhan accounts have become vital entry points for first-time digital users.

Challenges along the Way

Despite the impressive numbers, not all Jan Dhan accounts are actively used. The Finance Ministry reported that around 15–20 per cent of accounts remain dormant, with no meaningful transactions as of December 6, 2023. This reflects a deeper problem: mere access to bank accounts does not guarantee financial inclusion. Many households continue to rely on cash and informal lending channels because of a lack of financial literacy, irregular incomes, or distance from functional banking infrastructure.

Another challenge is the low balance levels in these accounts. While the aggregate deposit numbers look encouraging, the average balance per PMJDY account is still modest, raising questions about whether these accounts are genuinely improving household savings behaviour or merely serving as conduits for government transfers.

A closer look reveals that PMJDY’s success has not been evenly distributed. Urban areas and states with stronger banking penetration, such as Maharashtra and Tamil Nadu, show better account usage compared to rural and less developed states like Bihar or Odisha. In 2025, updating KYC has become a significant challenge, with accounts older than 10 years requiring compliance by September 30 or facing closure. The rush is especially intense in rural areas with limited documentation and digital access. Managing millions of updates without disruption is now an urgent priority.

Looking Ahead

The critical question after eleven years is whether PMJDY has led to financial empowerment or simply financial access. Opening a bank account is only the first step; the real test is ensuring that every account remains active and is used meaningfully for savings, credit, insurance, and investments are the next frontier. On this front, progress has been mixed. Formal credit access remains limited for small farmers, informal workers, and micro-entrepreneurs. Many still turn to moneylenders for urgent needs, often at exorbitant interest rates.

Expanding financial literacy is central to this effort. Many first-time account holders still struggle with digital banking, cyber safety, and investment options. Simplifying processes, offering vernacular support, and enhancing digital awareness are essential for its long-term success. Furthermore, while digital transactions have surged in urban India, rural adoption lags due to poor connectivity, cyber fraud risks, and limited trust in digital platforms.

Another priority is reaching remote and tribal areas where banking infrastructure remains weak. Strengthening mobile banking, expanding the network of banking correspondents, and adopting innovative fintech solutions will be key. The government must also ensure that policy changes, such as mandatory KYC updates, do not inadvertently exclude the very people the scheme set out to empower.

Conclusion

The government has recognised some of these gaps. In July 2025, the Department of Finance launched a three-month nationwide saturation campaign to expand coverage of PMJDY and related schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), and Atal Pension Yojana (APY). Within the first month, nearly 6.6 lakh new PMJDY accounts were opened, and over 22.65 lakh new enrolments were recorded under Jan Suraksha schemes.

The Pradhan Mantri Jan Dhan Yojana is more than just a banking scheme — it has become a social revolution. In eleven years, it has brought millions from the margins into the mainstream of India’s economy, including women. It represents a remarkable achievement but at the same time, a reminder of how far India still has to go in creating an inclusive financial ecosystem.

For PMJDY to truly fulfil its promise, India must focus on deepening account usage, bridging the digital divide, and embedding financial literacy into the very fabric of its inclusion strategy. Only then can the scheme evolve from being a numbers-driven program into a genuine instrument of economic and social transformation.

Views expressed are personal. John Felix Raj is the Vice Chancellor, and Sovik Mukherjee is an Assistant Professor of Economics in the Faculty of Commerce and Management, both at St. Xavier’s University, Kolkata