Financial Inclusion Growth in India: A Study with Reference to

Pradhan Mantri Jan-Dhan Yojana (PMJDY)

Mr. Muhammed Shafi.M.K

Research Scholar, School of Management,

National Institute of Technology (NIT), Warangal.
Email: shafimk@student.nitw.ac.in

Abstract
Financial Inclusion (FI) is the delivery of banking services at an affordable cost to vast
section of unbanked group. In India various measures have been taken by banks, GOI
(Government of India) and RBI for financial inclusion plan like Product Based Approach, Bank
Led approach, Business Correspondents (BCs), Simplified KYC Norms etc. Pradhan Mantri Jan-
Dhan Yojana (People’s Wealth Scheme) is the biggest financial inclusion initiative in the world
announced by India’s prime minister with the aim of launching India’s most intensive financial
inclusion as a national mission. The ultimate aim of PMJDY is to reach out economic activity
around poor to bring them into formal banking channel. As the part of it, 20.63 crore bank
accounts have been opened and Rs. 31399.67crore have been deposited (As on 3rd Feb, 2016).
This study aims to investigate various measures and initiatives of banks and governments as the
part of financial inclusion in general and PMJDY in particular. This is an exploratory research
based secondary data. This study also aims to reviewing the status of financial inclusion of
banks through PMJDY and comparing the financial performances of Banks with respect to pre
and post periods of PMJDY. Quantitative analysis has been done by using Paired Sample t-test
with the help of SPSS.

Key Words: Financial Inclusion, PMJDY, Business Correspondents (BCs), FI initiatives of RBI
and GOI

1. Introduction

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 Financial Inclusion is major concern to every nation for economic development of the
country. The ultimate aim of financial inclusion is to include all people in financial activities and
help them in income generation thereby it leads to increase in savings and investment. It also
paves a platform for thrift among the lower income and vulnerable sections of society to enhance
them from financial distress, so as it will promote inclusive growth, social development and
business opportunity in the country.

According to Chakraborty (2011) financial inclusion is the process of ensuring access to

appropriate financial products and services needed by all sections of society including vulnerable
groups such as weaker sections and low income groups at an affordable cost in a fair and
transparent manner by mainstream institutional players. In contrast to financial exclusion, FI is to
ensure banking services in the nature of public product, making the availability of banking and
payment services to the entire population without discrimination is the prime objective of
financial inclusion in public policy.

PMJDY has been considered as biggest comprehensive national mission on financial

inclusion with the objective of covering all households in the country with banking facilities and
having a bank account for each household. The mission of the PMJDY consists of two stages.
The first phase was scheduled in between 15th August, 2014 to 14th August, 2015 with many
schemes namely Universal access to banking facilities, Financial Literacy Programme and
Providing Basic Banking Accounts with overdraft facility of Rs.5000 after six months, RuPay
Kisan card and RuPay Debit card with accident insurance cover of Rs 1 lakh. In second stage
(from 15th August 2015 upto15th August, 2018) this will be facilitated to avail Creation of
Credit Guarantee Fund, Micro Insurance and unorganized sector Pension schemes like
Swavlamban. Moreover, this phase will be focused on coverage of all adults, students and
households living in hilly, tribal and difficult areas.

This study aims to investigate various programs, measures and initiatives of Governments
and Banks as the part of financial inclusion and to study the present status of financial inclusion
in India with reference to PMJDY. A snap review on financial performance of banks selectively
ICICI and SBI also furnished in this study to draw the conclusion on impact of this mission. The
objectivity of this study has been administrated through hypothesis testing, proper data collection
and analysis by using appropriate statistical tools.

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2. Need and Significance of the study

Poverty and exclusion are the drastic socio-economic problems in India. Even India has vast
human resource sufficient financial mechanism is not prevailing to include all people in formalized
banking channels. In this context, the extensive inclusive mission of PMJDY can addresses these
issues in removal of poverty and educating unbanked people regarding wider options of income
generation and personal financial security. However, as per Census, 2011, out of 24.67 crore
households in the country, 14.48 crore (58.7%) households are accessing banking services. Of
the 16.78 crore rural households, 9.14 crore (54.46%) are availing banking services. In 2011,
GOI launched Swabhimaan to cover 74,351 villages where population is more than 2,000. But
that was executed in limited extend compare to number of villages in India.
Even 1.5 crore bank accounts were opened in a day under PMJDY, 67. 32% accounts
(844.73 lakhs) were opened with Zero Balance. So it is needed to study the impact of this
program on banking performance. Moreover most of the rural people don’t have adequate
financial literacy. The appointment of Business correspondents with lower remuneration is
another major concern pertaining to this program. Above all, PMJDY is a new program with
many schemes and customer beneficiary policies to end the financial untouchablility. Hence, its
feasibility and wider performance are to be investigated in terms of usefulness to unbaked
people, penetration of branches, credit facilities, technological advancement etc.

3. Problem Identification and Research Question

This program would be affected to banking activities as well as subscribers particularly

unbaked and unprivileged low income people. In this regard, no more study has done with
special reference to financial inclusive approaches of PMJDY or initiatives taken to accomplish
this mission. Therefore, its applicability, beneficiary schemes, its current status, Business
Correspondent models are to be assessed and reviewed. This is a national mission for financial
inclusion. So that, it is also to be studied all financial inclusive approaches and initiatives taken
by proceeding governments and local authorities before launching this program. This research
tries to address some issues pertaining to what are the different financial inclusive approaches
and initiatives taken as the part of PMJDY, what are the overall financial inclusive

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measurements and major financial policies executed in India and their current status and how is
financial performance of banks after executing this program on over all bank account
penetration, Business correspondent penetration, saving and deposits increment with respect to
of public, private and rural banking sector.

4. Objectives of the Study

 To study the various schemes and approaches towards financial inclusion in India
 To analyse the financial performance of ICICI and SBI during pre and post periods of
PMJDY
 To study the status of PMJDY initiatives with respect to Public, Private and Rural
banking sectors in India

5. Hypotheses
 H01- There is no significant difference in SBI banking performance during pre and post
periods of PMJDY mission.
 H02- There is no significant difference in ICICI banking performance during pre and
post periods of PMJDY mission.

6. Research Methodology

This is a quantitative assessment and qualitative impact study based on exploratory

research method. The objectivity of the study has been ascertained with the help of secondary
data collected from GOI publications, RBI reports, PMJDY press releases, SBI and other annual
reports. A detailed review on impact of PMJDY on Business correspondents and Number of
Bank accounts penetration has been encompassed in this study. To test hypotheses, paired
sample t-test has been used and analyzed pre and post quarter financial performance of ICICI
and SBI in terms of return on investment, Non performing assets, Net profit for current term etc.
To draw the conclusions, overall inclusive measures of various institutions in general and
prospect and challenges of PMJDY in particular have been illustrated.

7. Financial Inclusion in India

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 India has large population which consists of 68 percentage rural people. To encourage
savings and thrift among these people government of India, RBI and other banks have been
taking intensive financial inclusive programs. This is aimed to impart providing banking and
financial services to all people in a fair, equitable and transparent manner at affordable cost. In
this regard, GOI did two reforms (1969, 1980) in banking sector to nationalize twenty banks,
establishment of Regional Rural Banks (RRBs) in the year of 1975 and 1976 and launching of
Self-help group-bank linkage program in 1992 by NABARD. Through the second version model
of SHGs, NABARD has revised the guidelines to address some of the shortcoming of earlier
version through which Joint Liability Groups (JLGs), voluntary savings, cash credit system,
creation of and improving risk mitigation systems by bringing third party audit have been
brought to action.

For achieving financial inclusion in India, GOI and RBI have taken various measures
such as Product Based Approach, Bank Led approach (Self Help Group-Bank Led Program
(SLBP), product led approach, Government initiatives, Technology based approach and
Knowledge based approach. Its summarized discussion is given below
1. Product–Led approaches:-This includes Basic Saving Bank Deposit (BSBD), NFA-No
frills account, Kisan Credit Cards (KCC), General Purpose Credit Cards (GCC).
2. Government Initiatives: - GOI and State Government have taken various programs national
and state levels like SGSY (Swarnajayanthi Swaroz Gar Yojana), MGNREGS (Mahathma
Gandhi National Rural Employee Guarantee Scheme), Swavalamban, PMJDY, Swabhiman,
APY (Atal Pension Yojana), UIDAI (Unique Identification Authority of India) etc.
3. Bank Led Approaches:-This approach comprises Self Help Groups Bank Linkage Programs
(SBLP), Business Facilitator (BF) or Business Correspondents etc.
4. Regulatory approaches: - This is implemented by Governing bodies like RBI, IRDA and
GOI which includes Simplified Know Your Consumer (KYC), Simplified Bank Saving
Opening Bank Account and Bank Branch Authentication etc.
5. Knowledge Based Approaches: - This includes opening Financial Literacy Centers (FLCs)
by various Banks, Financial Literacy Guide, initiatives of National Institute of Security
Market (NISM) to increase financial familiarity among school students and RBI Young
School Awards.

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6. Technology Based Approaches: - Financial inclusion activities on technology applications
in banking sector comprise Mobile Banking, ATM Based banking, Branchless Banks, Aadaar
Enabled Banking services etc.
For the universal access to banking facilities, banks have been mapped each districts to
cover Sub Service Area (SSA) catering to 1000-1500 households to enabling banking services
within a reasonable distance says 5 km. Furthermore, overdraft facility to all households,
Financial Literacy Program, Creation of Credit Guarantee Fund, Micro Insurance, unorganized
sector Pension schemes like Swavalamban and initiation of RuPay Debit card (it is a domestic
debit card introduced by National Payment Corporation of India-NPCI) also been launched.
CRISIL Inclusix Index started as comprehensive indices to financial inclusion based on three
elements which are Branch penetration, Credit penetration and Deposit penetration together into
one single metric. Presently it covers 652 districts in all states including Union Territories. The
summary of major initiations taken by various authorities is given below.

Table-1: Major Financial Inclusion Initiatives in India and correspondent authorities

Year of
Important initiatives Initiated by
launching
1 Lead banking scheme (LBS)- for
promoting banking services and RBI 1969
financial literacy
2 No frills account (NFA) RBI 2005
3 Business Correspondence RBI 2006
4 Swabhiman (To bridge economic gap Finance Ministry and
2011
between rural and urban India) Indian Banks’ Association
5 SHG Bank Linkage Programs NABARD 1992
6 Simplifications of Know your customer
RBI 2002
(KYC) norms
7 PMJDY Ministry of Finance, GOI 2014
8 Kisan Credit Card NABARD 1998
9 National Rural Livelihood Misson
Ministry of Rural
(NRLM) by restructuring the
development, Government 2010
Swarnajayanti Gram Swarozgar Yojna
of India
(SGSY)
10 Pension Fund Regulatory and
Ministry of Law and
Development Authority (PFRDA) Bill 2013
Justice & PFRDA
(for old age income security)

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11 Basic Savings Bank Deposit Account
RBI 2012
(BSBDA)
12 Project Financial Literacy RBI 2007
Source: Consolidated from different reports

The present banking network of the country (as on 30.09.2014) involves bank branch
network of 1,19,959 and as of October 2015, there are 96,130 on site and 94,729 off site ATM
networks across the country. Of these, 43,962 branches (38.2%) and 23,334 ATMs (14.58%) are
in rural areas. Moreover, there are more than 1.4 lakh Business Correspondents (BCs) of Public
Sector and Regional Rural Banks in the rural areas. As on October 2015, altogether 22,880,984
Credit Cards and 6,15,367,242 Debit Cards have been distributed by different banks (RBI, 2015).
The total Bank Branches opened under different banks are given below.
Table-2: Bank Group and Population Group-wise Number of Functioning Branches as on
September 30, 2014.

Semi
Bank Groups Rural Urban Metropolitan Total
Urban
SBI & its Associates 7723 6448 4103 3482 21756
Nationalized Banks 20264 15665 12066 10991 58986
Other Public Sector Banks 274 424 436 354 1488
Old Private Sector Banks 1409 2549 1589 1193 6740
New Private Sector Banks 2559 3527 2673 3140 11899
Foreign Banks 6 13 57 242 318
Regional Rural Banks 13989 3567 1012 204 18772
Grand Total 46224 32193 21936 19606 119959
Source: Annual Report, 2014-15, Ministry of Finance (Budget Division)

8. PMJDY Mission: Current Status

The ultimate strategy of this plan is to maximum utilization of existing banking

infrastructure to bring 7.5 crore un-banked families into formal banking system by opening more
than 15 Crore bank accounts (two bank accounts per household). In this regard, banking network
would be fully geared up to cover all households in both rural and urban areas and banking

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 sector would also be expanding itself to set up an additional 7000 branches, 20000 new ATMs,
50,000 Business correspondents (BCs) and launching of 60,000 financial literacy camps aimed to
establishing in first phase. Though, for full fledged operations of this mission, comprehensive
plans are necessary with the consideration past experience where a large number of opened
accounts remained dormant. Therefore, this plan is executed with different schemes such as
Accidental insurance cover of one lakh, No minimum balance required, DBT facilities to all
beneficiaries of Government Schemes, overdraft facility after 6 months satisfactory, access to
insurance, pension, basic mobile banking services and Life insurance cover of Rs.30,000/-. In
accordance with this mission, possibly 24 accounts are being opened in one rural branch during
one eight-hour working day. It also seeks to provide financial incentives to business
correspondence.

In this regard, 77,852 camps initiated in the launcing day to open bank accounts and in
its first phase itself record has been created by providing 1.5 crore accidental insurance covers
of Rs 1 lakh and ICICI opened 100,000 bank accounts in its first day. Furthermore, 131012
Mega Financial Literacy camps were conducted by different banks in coordination with
various agencies and opened 89876 Financial Literacy counters to spread awareness on
PMJDY. 147418 students of 2567 schools/collage were imparted training on financial literacy
up to April 2015.The current status of (as on 30.12.2015) opened bank accounts under PMDJY
as follows
Table-3: Number of Bank accounts opened under PMJDY
(Figures in Crores)

No of Balance % of Zero-
Aadhaar
Bank Name Rural Urban Total Rupay In Balance-
Seeded
Cards Accounts Accounts
Public Sector
9.04 7.18 16.22 13.93 7.57 24729.62 31.53
Bank
Regional Rural
3.14 0.52 3.66 2.64 1.06 5484.07 25.51
Bank
Private Banks 0.45 0.30 0.75 0.70 0.24 1185.98 39.49
Total 12.63 8.00 20.63 17.26 8.88 31399.67 30.75

Source: http://www.pmjdy.gov.in/account, as on 03.02.2016

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 9. Business Correspondent

The business correspondent or Bank Mitra are the agent of banks they thrive savings and
thrift among local areas and unbanked remote villages. It was created in January 2006 in
response to guidelines issued by the RBI. At present it has been deployed across 499 districts in
28 states through more than 28,000 customer service points. Banks have been permitted to be
representative of banks to villagers for assisting in opening bank accounts and in banking
transactions. They carry mobile devices and villager gives his thumb impression or electronic
signature for their money remittance.

Business Correspondents will get commission from bank for every account opening as
well as all loan-application processed. Since 24.06.2014, RBI also permitted Non Deposit taking
NBFCs as BCs. Now days all NGOs, SHGs, Micro Finance Institutions (MFIs), Post Offices,
Insurance agents, Panchayats, Civil Society Organizations, farmers’ clubs, Community based
organizations, Cooperatives societies, Village Knowledge Centers, Agri Business Centers, Krishi
Vigyan Kendras, Khadi and Village Industries units can be the Business correspondent for
Banks. The financial inclusion programs like Bank-led approaches especially PMJDY have been
brought significant impact on increasing number of Business correspondents. Its current status
has been given below.

Table-4: Status Report on Bank Mitra and Infrastructure as on 29.01.2016

Summary Report
No. of Bank Mitra Having
No. of
No of Sub Total No. of On Line
Active Bank
Name of Bank Service Area Bank Mitra E-KYC Inter Operable
Mitra.
Allotted Required Account Withdrawal Txn.
Opening Rupay Card
Public Sector Bank 106778 88069 80447 80594 32246

Regional Rural
Bank 48719 35258 28867 18060 10357
Private Sector Bank 4375 3435 2277 1905 2066
Grand Total 159872 126762 111591 100559 44669

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Source: PMJDY, Progress Report-www.pmjdy.gov.in

10. Financial Performance of Banks with effect of PMJDY

To understand financial performance of banks with respect to PMJDY, the standalone

financial statements of State Bank of India and ICICI bank have been selected. To analyze the
pre and post financial performance of the banks ratio-based model used to evaluate the
performance of banks with the help of different criteria such as Gross NPA (Non Performing
Assets), Net NPA, Income on Investment, Net Profit/ (Loss) and percentage Return on Assets.
Later these variables have been statistically tested with comparison of pre and post quarter
periods of PMJDY. To testing the hypotheses, Paired sample test has been used.

RBI defines Net NPA as Gross NPA minus Balance in Interest Suspense account plus
DICGC/ECGC claims received and held pending adjustment + Part payment received and kept
in suspense account + Total provisions held. The zero NPA closing of all banks is the ideal and
health scenario of Net NPA. Usually it is calculated on the total lending done in a year. Another
financial ratio is Return on Assets (ROA), which is the profitability ratio in relationship between
net profit and total assets. It shows the ability of management to procure deposits at a reasonable
cost and generating income through profitable investments. The higher rate ROA is the more
profitable to banks. Return on Equity (ROE) shows the mathematical relationship between net
profit and total equity, that is most important indicator of a bank’s profitability and growth
potential. Interest Expended includes Interest on Deposits, Interest on RBI or other borrowings
and other interest. Income on Investment is the income generated from interest payments,
dividends, capital gains collected upon the sale of a security or other assets or any other profit
that is made through an investment. Gross NPA is all added NPAs Banks would continuously
assess this by evaluating their loan payments.

The below tables show the pre and post periods of financial performance of ICICI and
SBI banks based on standalone statement. Stand-alone financial statements treat each entity
separately instead of consolidated financial statement, which covers the activities of parent
company and its subsidiaries in a single report, as a single company.

Table-5: ICICI Standalone financial Performance

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 Post periods of PMJDY (Rs. Cr) Pre periods of PMJDY (Rs. Cr)
Particulars
Sep '15 Jun '15 Mar '15 Jun '14 Mar '14 Dec '13
Income on Investment 2,661.40 2,659.12 2,983.20 2,977.19 2,911.17 2,922.17
Gross NPA (Non
15,857.82 15,137.61 15,094.69 10,843.30 10,505.84 10,399.13
Performing- Asset)
Net NPA 6,759.29 6,333.31 6,255.53 3,428.52 3,297.96 3,118.44
Interest Expended 7,847.39 7,697.47 7,659.05 7,275.01 7,132.73 7,199.89
Net Profit/(Loss) For
3,030.11 2,976.16 2,922.00 2,655.30 2,652.01 2,532.21
the Period
Return on Assets % 1.89 1.91 1.92 1.83 1.86 1.76
Source: Standalone financial statement of ICICI, money control.com

Hypothesis test-1

H01- There is no significant difference in ICICI banking performance during pre and post
periods of PMJDY program.

Here there are six variable to test financial performance of ICICI bank with respect to pre and
post periods of PMJDY as shown below. To test this hypothesis, paired sample t-test has been
used. The SPSS output table is given below.

Paired Samples Test

ICICI Paired Differences
Mean 95% Confidence Interval of Sig. (2-
t Df
the Difference tailed)
Lower Upper
Pre & Post Income on
Pair 1 -168.936 -669.964 332.091 -1.451 2 .284
Investment
Pair 2 Pre & Post Gross NPA 4780.616 4271.214 5290.018 40.379 2 .001
Pair 3 Pre & Post Net NPA 3167.736 2794.928 3540.544 36.559 2 .001
Pre & Post Interest
Pair 4 532.093 374.903 689.283 14.565 2 .005
Expended
Pre & Post Net
Pair 5 362.916 277.466 448.366 18.274 2 .003
Profit/(Loss)

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 Pre & Post Return on
Pair 6 .090 -.061 .241 2.563 2 .124
Assets

From the above SPSS output table it has been observed that out of six hypotheses testing four
hypotheses are statistically significant i.e. its 2 tailed value is less than .05 (ɑ) which are Gross
NPA (.001), Net NPA (.001), Interest expanded (.005) and Net profit (.003) of ICICI. Whereas
income on investment (.284) and Return on Assets (.124) are accepting the null hypotheses, its
significant value is more than P. Value. In another meaning there is a significant difference
among all variables of ICICI financial performance during pre and post periods of PMJDY
except return on assets and income on investment. The overall result shows that

The second table based on SBI financial statement is as shown below.

Table-6: SBI Standalone financial Performance

Post-Qtrs of PMJDY (Rs. Cr) Pre-Qtrs of PMJDY (Rs. Cr)
Particulars
Sep '15 Jun '15 Mar '15 Jun '14 Mar '14 Dec '13
Income on Investment 10,564.66 10,019.41 9,982.75 8,559.32 8,228.20 8,227.60
Gross NPA (Non
56,834.28 56,420.77 56,725.34 60,434.24 61,605.35 67,799.33
Performing- Asset)
Net NPA 28,591.96 28,669.14 27,590.58 31,883.80 31,096.07 37,167.35
Interest Expended 26,405.01 25,910.86 25,389.40 23,234.88 22,954.81 22,229.94
Net Profit/(Loss) For
3,879.07 3,692.43 3,742.02 3,349.08 3,040.74 2,234.34
the Period
Return on Assets % 2.14 2.24 2.12 0.74 0.69 0.52
Capital Adequacy
13.19 12.98 12.79 12.85 12.96 11.88
Ratio
Source: Standalone financial statement of SBI, money control.com

Hypothesis testing-2

H02- There is no significant difference in SBI banking performance during pre and post periods
of PMJDY program.

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 To rest this hypothesis, seven financial variables of SBI are selected on quarter
performance basis. Same paired sample test has been used to test this hypothesis also. The SPSS
output table is as shown below.

Paired Samples Test

Paired Differences
Mean 95% Confidence Interval of Sig. (2-
SBI- T Df
the Difference tailed)
Lower Upper
Pre & Post Income on
Pair 1 1850.566 1514.599 2186.533 23.700 2 .002
Investment
Pair 2 Pre & Post Gross NPA -6619.510 -16402.582 3163.562 -2.911 2 .101
Pair 3 Pre & Post Net NPA -5098.513 -14792.414 4595.387 -2.263 2 .152
Pre & Post Interest
Pair 4 3095.213 2795.534 3394.892 44.440 2 .001
Expended
Pre & Post Net
Pair 5 896.453 -427.154 2220.061 2.914 2 .100
Profit/(Loss)
Pre & Post Return on
Pair 6 1.51667 1.258 1.775 25.239 2 .002
Assets
Pre & Post Capital
Pair 7 .423 -.696 1.543 1.626 2 .245
Adequacy Ratio

The above SPSS output table shows that out of seven sub hypotheses three hypotheses are
accepting null hypothesis i.e. their significant values are less than P. Value (.05) which are
income on investment (.002), interest expanded (0.001) and return on asset (0.002). Whereas
Gross NPA (.101), Net NPA (.152), Net Profit/Loss (0.100) and Capital adequacy ratio (0.245)
are rejecting the alternative hypothesis i.e. its significant values are more than P. value. In
another meaning there is a significant difference among all variables of ICICI financial
performance during pre and post periods of PMJDY except return on assets and income on
investment.

11. Prospects and Challenges of PMJDY

PMJDY mission created tremendous changes in the field of opening bank account and
disseminating the financial literacy even in unprivileged areas. The survey designed by India’s

13
Ministry of Finance in February 2015, the foundation Bill & Melinda Gates found about 86
percent of PMJDY account holders were their first bank account. Another favorable movement
concerned to this is, the largest private sector bank ICICI opened 100,000 accounts on inaugural
day itself. This program will strengthen financial literacy of customers by increasing awareness
of available financial services.

The positive impact of this mission can be seen in reduction of zero balance account.
Out of 180 million accounts as of September 2015, 44 percent accounts are zero balance
account which is less 76 percent in September 2014. Though, there are some imbalances exist
in some of the implementations part of this mission. Even Business Correspondence are
providing doorstep banking services through the use of smart card handling devices as
representative of banks, the poor remuneration (Rs 2000-3000 per month) paid to them causes
to unsatisfactory performance of the BCs despite PMJDY is highly relying on the BCs for
channelizing the banking network in both the rural and urban areas. The government promises
to pay them Rs 5000 per month. Even though this promised remuneration is not sufficient to
drive active or motivated BCs. The trend of Zero Balance Accounts has been reduced from
76.81% (As on 30 Sept, 2014) to 31.81% (As of 30, Dec, 2015).
The another constrain pertaining to this program is excessive opening of zero balance
account. Even there is a diminishing trend in opening zero balance account, heavy lenders of
zero balance in private sector exist such as YES bank (89%), Kotak Mahindra Bank (77%) and
Axis Bank (75%). Among PSBs, 95% of Jan Dhan accounts are zero balanced and Indian
Overseas bank also carries big challenge in this regard with the opening of 84 percent zero
balance accounts (Business-Standard.com). The duplicity of accounts is another issues pertaining
to this program. The Government of India’s launched many subsidy bills such as MNREGA,
scholarships for the poor, NSAP social safety net, the PDS food security program and
the fertilizer subsidy. In future, all these could be operated through the PMJDY accounts. But
opening of more dormancy accounts and instable planning of keeping subsidies will be affected
the bottom line of banks so it must be self-sustainable.

For the fuller utilization JDY schemes, financial literacy is inevitable things but a large
population still to be alphabetically educated. Even all banks and regulatory authorities are
carrying out financial awareness programs, still many people are not well known regarding

14
formal financial services. The capital Market, Insurance, mutual fund participations
understanding variations in financial portfolios are required depth and breadth knowledge of
financial scenarios and markets.

12. Conclusion

To conclude, the overall study on PMJDY program explicates gradual penetration of

bank branches, opening bank accounts and incrimination of business correspondents. As every
mission, this program also has prospects and challenges especially large dormancy accounts,
concerns regarding rural financial illiteracy, inadequate executors etc. Though, the gradual effort
to being all people into formal banking and extension of different financial advantages of this
program will be resulted in augmentation of beneficiaries of this program. Subsequently, this
mission can plays significant role in elimination of financial untouchably and proper thrift and
savings of income. It enables the DBT (Direct Benefit Transfer) facility, thereby drastically
reducing leakages and pilferages in social welfare schemes. The overall hypotheses testing show
that there is high impact of this program in ICICI banking performance compare to SBI in which
the number of no frills accounts is larger than ICICI. In brief, along with wider operation of this
mission the stable performance of banks also to be ensured. However, the detailed review of this
program will be possible only after the second phase implementation in which this mission will
cover all adults, students and households to bring formal financial channels.

13. References

1. Pooja Sharma, Hemlata. (2014). Financial Performance of ICICI Bank and SBI bank: A
Comparative Analysis. International Journal of Research Aspects of Engineering and
Management, ISSN: 2348-6627, Vol. 1, Issue 1, FEB 2014, pp. 20-24
2. Chakrabarty, K.C. (2013). Financial Inclusion in India: Journey So far and the Way
Forward. Key note address at Finance Inclusion Conclave Organised by CNBC TV 18:
New Delhi.
3. Kumar, Sadhan. (2011). The Reserve Bank of India study on “Financial Inclusion in
India: A case-study of West Bengal” published by RBI
4. APEC. (2011). Inclusive Growth, published by Asia-Pacific Economic Cooperation,
http://www.apec.org/About-Us/About-APEC/Fact-Sheets/Inclusive-Growth.aspx
5. Lok Sabha Secretariat, Parliament Library and Reference, Research, Documentation and
Information Service. No. 7 /Rn/Ref./November /2014

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6. Press note. (2015). Press Briefing of Finance Minister, Shri Arun Jaitley on PRADHAN
MANTRI JAN-DHAN YOJANA dated 20 January, 2015.
7. Rangarajan, C. (2008). Committee Report on the Financial Inclusion, Government of
India
8. PMJDY. (2014). A National Mission on Financial Inclusion Department of Financial
Services, Ministry of Finance Government of India. www.financialservices.gov.in
9. Chhabra, Neeru. (2015). Financial Inclusion in India Department Of Economics
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