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PRADHAN MANTRI JAN DHAN YOJANA (Achievements (Helped in financial…
PRADHAN MANTRI JAN DHAN YOJANA
Background
financial inclusion program of Government of India
focuses on coverage of households as against the earlier plan, which focused on coverage of villages. It focuses on coverage of rural as well as urban areas
plan also envisages channelling all Government benefits to the beneficiary’s accounts and pushing the Direct Benefits Transfer (DBT) scheme of the Union Government
Significance
Poor households in India, in the absence of access to formal credit, have to deal with moneylenders
less than 10 percent of all commercial bank credit goes to rural area
Achievements
Helped in financial inclusion
Financialisation of savings
Diversification of financial products
Transition to electronic payments
Helped banking sector
Falling percentage of zero balance accounts
Improved balance sheets of banks
Servicing Cost is not an issue for the banks now-
Helped in inclusive growth
Focus on rural India
Women empowerment
Direct benefit transfer
Plugging Leakages from Subsidy
Challenges
Dependency on unsecured debt
Internet connectivity issues
Funds for Overdraft Facility
Increasing Cost of Business Correspondents:
Tackling Unaccounted Money Deposited During Demonetisation
Way forward
Government must nudge the banks to offer much-needed loan products
Centre and the RBI also need to make sure that the first-time adopters are treated well
policy focus should shift from the quantity of inclusion to the quality of inclusion
massive campaign programmes among the poor households focusing on financial literacy and education
It is recommended that internet connectivity and speed should be increased in tribal and hilly areas