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Q. Two years of Pradhan Mantri Jan Dhan Yojana: Discuss the achievements of PMJDY and also provide suggestions to improvement.
Sep 21, 2016 Related to : GS Paper-3

Ans :

Introduction-

India’s ambitious financial inclusion scheme, ‘Pradhan Mantri Jan Dhan Yojana’ (PMJDY) has been completed two years recently. Though it was surrounded by various controversies, but it has achieved a lot in last two years of its journey.

Its achievements-

  • In a barely two years of time about 24 crore bank accounts has been opened under PMJDY scheme.
  • The PMJDY has unleashed the real economic benefits to those sections of society like women and the urban poor that hitherto excluded from the formal financial system.
  • Many poor people have realised credit and insurance facilities under the PMJDY.
  • Similarly PMJDY has functioned as a key cog in Aadhar-linked benefit transfers and opened up a new savings avenue for low-income earners, who have parked ₹42,500 crore in these accounts.

Need of Improvements-

  • Though huge accounts have been opened, but many of those are dormant. Hence the PMJDY must now strategise on how these accounts can be effectively used to deliver financial services to the poor, while ensuring that this is a paying proposition for banks.
  • PMJDY should expand its scope and must include other various banking services to the people.
  • Generally Indian banks have been quite wary of lending to small borrowers as their small ticket sizes and lack of credit history were seen as adding to costs and risks on the loan book, this aspects needs to be addressed particularly when large industrial borrowers increasingly becoming defaulters.
  • Small borrowers and SMEs offer immense scope for banks to expand their yields and net interest margins. Under PMJDY loans need to be provided needy small borrowers.

Conclusion-

PMJDY has brought about 24 crore people into formal financial service, who were excluded from financial services until recently. It has helped in direct cash transfers scheme along with Aadhar. Though it has achieved a lot in last two years, but still it must be improved as per current need.


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