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Challenges to Pradhan Manti Jan Dhan Yojana

A Study of Challenges and Problems Faced While Implementing Pradhan Manti Jan Dhan Yojana

Shilpi Pal & Dr. M.S.Khan

Research Scholar & Head/Coordinator (MBA & M.Phil Programme), Babasaheb Bhimrao Ambedkar University (A Central University), Lucknow


The biggest development by the NDA government in the year 2014 is introducing first social welfare scheme that is “Pradhan Mantri Jan Dhan Yojana”. The purpose of introducing this scheme is financial inclusion launched by our Prime Minister Mr. Narendra Modi on 28th August, 2014. Mr. Modi has come up with this scheme on his first Independence Day speech on 15th August, 2014 which is a National mission for a financial inclusion. This scheme is based on “Sab ka sath sab ka vikas” that is inclusive growth. The basic aim of this scheme is that every family living in India must have bank accounts and must enroll in bank with Zero balance account. This is the first step to bring out economic quality in country. This paper highlights the problem and challenges faced while implementing the scheme. Also try to point out basic reason not to turn all people for adopting this scheme although it is Zero Balance account scheme which will be opened in all nationalized and private bank.

Keywords- Financial Inclusion, National Mission, Inclusive Growth, Economic Quality


Pradhan Mantri Jan Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, like Saving and Deposit Accounts,Remittance, Credit, Insurance, Pension in an affordable manner. Mr. Narendra Modi our prime minister has announced this scheme on his first independence speech on 15th Augst, 2014. The Objective of PMJDY is financial inclusion and intensive growth along with the improvement of economic status of our country. The aim behind PMJDY is that every family or household have their own account and can access banking facility easily so that everyone become evenly a part of country specially a lower section of society who may easily not able to get these facilities prior to PMJDY. The name Jan Dhan was chosen through an online competition on the MyGov Platform.Slogan of this scheme is “Mera Khata – Bhagya Vidhata.” PMJDY Account can be opened at Business Correspondent (Bank Mitr) outlet or at Bank branches.PMJDY gives the facility of Overdraft that is up to Rs.5000/- is available in only one account per household after 6 months of satisfactory carry out of accounts. On the first day itself 1.5 crore accounts were opened under this scheme. Then around 12.58 crore accounts were opened by 28th January, 2015. Joint account can also be opened under this scheme. The scheme has been started with a target to provide ‘universal access to banking facilities’ starting with “Basic Banking Accounts” with overdraft facility of Rs.5000 after six months andRuPayDebit card with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan Card.

Literature Review

Dr.Anupama Sharma and Ms. Susmita Kukreja has discussed in their paper that “The study focuses on the role of financial inclusion, in strengthening the India’s position in relation to other countries economy. For analyzing such facts data for the study has been gathered through secondary sources including report of RBI, NABARD, books on financial inclusion and other articles written by eminent authors.

Dr.G.H. Barhate and Ms. V.R.Jagtap has include includes study of various financial inclusion and to evaluate progress and current status of financial inclusion of the State in their research paper

C. Paramasivan and V. Ganeshkumar discussed in his ppaper that Financial inclusion is aimed at providing banking and financial services to all people in a fair, transparent and equitable manner at affordable cost. This paper is an attempt to discuss the overview of financial inclusion in India.

Objectives of the Study

The basic objectives of my study are:

  • To Know the reason behind introducing Pradhan Mantri Jan Dhan Yojana(PMJDY)
  • To recognize awareness among people for this financial inclusion.
  • To understand the problems and challenges faced in implementing PMJDY.
  • To find out effect on banking sector after adopting this financial inclusion.

Research Methodology

My study is purely based on secondary data which include, Existing Articles, Newspapers, websites, online articles and Research Paper published in different journals. Through these secondary data and information available I have done my research on green advertising so deeply to meet up with the objective of the study.

Result and Discussions

It is good initiation for the purpose of financial inclusion and economic growth. Many have found positive aspect behind the Pradhan Mantri Jan Dhan Yojana specially the lower segment of country who feels more comfortable now as they easily take step in banking sector and have their own accounts with special facilities like Overdraft facility, RuPay card, Kisan card facility etc.

Pradhan Mantri Jan - Dhan Yojana (Accounts Opened As on 12.01.2015).png

Source: – http://en.wikipedia.org/wiki/Pradhan_Mantri_Jan_Dhan_Yojana

Challenges and Problems faced by PMJDY Implementation-

  • The Connectivity Challenge – As we know around 68% of population lives in rural areas which need to be connected through complete banking system to avail this facility which is huge business potential for the banking sector .But it throws up connectivity-related challenges that need to be addressed in rural areas. Lack of physical and digital connectivity is posing a major hurdle in achieving financial inclusion for rural India.
  • Technological Issue- The technological issues affecting banks from poor connectivity, networking and bandwidth problems to managing costs of maintain infrastructure especially in rural areas. To meet the increasing demands for banking services, banks often depend on passive optical network connectivity, for which they end up paying high costs to internet service providers.
  • Infrastructure of banks in rural areas- It is about the connectivity in banking system. The connections in rural areas are not reliable and fall shorts on bandwidth. An alternative option must be adopted to connect in rural areas branches through satellite links. Banking through WAN or internet link of lower bandwidth at remote locations repeatedly suffers with video delays, slow browsing, slow file transfer, slow upload and download of files, failing to meet the demands of account holders at particular time.
  • Are really people who don’t have account will turn around – This is the one of the major problem as most of the people are aware of it but still they are not turning into bank account user may be because they are not still understand the proper channel of opening bank account under Pradhan Mantri Jan Dhan Yojna.
  • Gender Gap- There is major gender gap in banking sector; by 2012 for every 1,000 deposit accounts in the name of men, just 394 were opened in the name of women.

Chhattisgarh, West Bengal, Madhya Pradesh, Maharashtra and Gujarat were even worse than the national banking sex ratio, while Delhi and the four southern States were better.

  • ATM Network-People may face problem due to ATM in rural areas as there is low network of ATM so people are not well know how to use ATM.
  • New account opening– Creating new account is not challenge but transaction of this account is a challenge. As staff which is already there may find pressure if there is lot of people come with the problem at a time.
  • Procedure not clear– Most of the people are aware but still so many are not turned around as they are not understanding the proper procedure of opening account and required document at a time.
  • Coverage of Difficult areas– Many areas like parts of North East, Himachal Pradesh, Uttarakhand, Jammu & Kashmir etc. are facing challenges of infrastructure and telecom connectivity . In these areas all household may not be fully covered under campaign
  • Brand Awareness and sensitization- Customer must get proper awareness about the PMJDY and their benefit after opening account. All thing must clear to customer and made aware that overdraft of up to ` 5,000/- to be provided in their account is a credit facility which needs to be repaid in order to get fresh limits and is not a grant.


During research I found the major challenges and problem faced while Implementation of Pradhan Mantri Jan Dhan Yojana which is discussed above under the heading of challenges and problems. Still there are few points which need to be taken into consideration-

  • It is not clear that those customers who have existing saving accounts without RuPay card will get other benefit or not.
  • No clarity on that which has already accounts before announcement of accidental insurance coverage will get this benefit of 1 lakh accidental insurance coverage.
  • Customers are not able to follow proper channel of opening account as they are not much aware about the procedure and benefits to the account holder.
  • No awareness to the customers who will be going to wear bill of insurance premium and cost to keep account running.
  • Banking staff may feel pressure as so many accounts are opening under this scheme.


There are lots of activities are going around so that everyone get aware about it and must open account under this who don’t have account in the bank and for those who may face problem in opening bank account prior to PMJDY. Awareness program is going through proper channel like Print Media, T.V, Radio, Banner and poster almost outside every bank etc. The result has been seen positive and almost everyone has opened account. But bank in rural areas are facing few problem like low connectivity, Less ATM machines etc. For this reason there are few suggestions which need to implement for the better banking service in the remote locations and they are-

  • Bank must switch to WAN Optimization- Banks need to switch to WAN Optimization Controllers that support tunneling protocol/storage protocol capable of accelerating remote application delivery, thereby speeding up the delivery of banking services. WAN optimization controllers speed up data transfers and reduce application response time over wide area networks by reducing the amount of traffic transmitted between remote offices and between remote locations. This helps banks increase application response time significantly.
  • Facilitate more ATM in remote locations- As in rural areas we see few ATM due to which everyone may not access ATM so much and they don’t know how to use. So, if everyone has account under PMJDY means they carry RuPay card and debit card for that purpose they need to access ATM machines.
  • Awareness Campaign in Rural Areas- There should be proper awareness programs in remote locations about the PMJDY so that everyone must aware about the benefit and need of opening account and they must open account to run with economy.
  • Bankers must give proper information about documentation and other facilities- People must aware about the document needed while opening account and if document is not there then other alternative way for opening account and other benefits related to the account opening like overdraft facility, accidental insurance etc. must be told to the person. As many people think if they don’t have single document they are not able to open the account but under PMJDY there is alternative solution to this problem but people are not aware about this. So banker must take interest and tell detail about it.


For the financial inclusion and economic growth this turn to be one of the best initiatives under which everyone can enjoy the banking facility as well as economic parity among everyone. It has turned into positive response where public sector players has opened 11.5 crore accounts under PMJDY covering 99.74 households and paving the way for transfer of over Rs 65,000 crore of subsidies and other transfers directly into these accounts. Almost every Indian is now into banking system expects inaccessible households of remote location. After one of the survey it come out thet out of 21.05 crore households, 20.99 crore have access to bank facility. As new technology introduced by National Payments Corporation of India (NPCI), a person can transfer funds, check balance through a normal phone which was earlier limited only to smart phones so far. Mobile banking for the poor would be available through National Unified USSD Platform (NUUP) for which all banks and mobile companies have come together. For better acceleration in rural areas of banking sector these steps are taken by which an account holder feels comfortable in running account very well.



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