C.PARAMASIVAN ,PERIYAR EVR COLLEGE , TIRUCHIRAPPALLI Commercial bank’s performance on pradhan mantri jan dhan yojana

International Journal Of Scientific Research And Education

||Volume||3||Issue||6||Pages-3595-3603||June-2015|| ISSN (e): 2321-7545

Website: http://ijsae.in

Dr. C. Paramasivan , R. Kamaraj IJSRE Volume 3 Issue 6 June 2015

Page 3595

Commercial Bank’s Performance On Pradhan Mantri Jan Dhan Yojana

Authors

Dr. C. Paramasivan1, R. Kamaraj

2

1Assistant Professor and Research Advisor

2Ph.D Full Time Research Scholar

Department of Commerce Periyar E.V.R College Tiruchirappalli, Tamil Nadu

Email id: [email protected]

ABSTRACT

Financial inclusion performing in our country in a different name and activities no frills account scheme has

been replaced as PMJDY scheme which was announced by the new NDA government. Pradhan Mantri Jan

Dhan Yojana scheme is a totally contributory scheme and very closely people are travelling to banking

sector day by day. In the last few years RBI launched many more schemes for banking sectors. Besides

financial inclusion is one of the core activities of banking performance and directly people are getting

government financial services in their living place. In 2005 RBI launched No Frills Accounts scheme for all

the income level and financially poor people should use banking sectors, but this scheme did not cover all

the people. Only 2000 people opened bank account in each village. That is why Indian Prime Minister Mr.

Narendra Modi announced on August 15, 2014 and simultaneously this PMJDY scheme was launched on 28

August, 2014. The scheme highlight was opening day 1.5 crores people opened this scheme joining baking

sectors. This study is focused on commercial banks performance on PMJDY.

Keywords: Pradhan Mantri Jan Dhan Yojana, Reserve Bank Of India, Financial Inclusion, No Frills

Account, Inclusive Banking.

INTRODUCTION

Financial inclusion is the recent concept, which helps achieve the sustainable development of the country,

through available financial services to the unreached people with the help of financial institutions. Financial

inclusion can be defined as easy access to formal financial services or systems and their usage by all

members of the economy. RBI announced and launched many more schemes for banking sector. This

scheme had many more restrictions and had not achieved for banking sectors. Five years ago no frills

account was launched by RBI but this scheme was not comfortable for all the income level people to

continue with the banking sector. This study helps us to understand the financial inclusion position,

Dr. C. Paramasivan , R. Kamaraj IJSRE Volume 3 Issue 6 June 2015 Page 3596

commercial bank’s performance of Pradhan Mantri Jan Dhan Yojana in India. With this view, the present

article discusses the PMJDY scheme by commercial banks during the period from September 2014 to March

2015.

REVIEW OF LITERATURE

Artta Bandhu Jena (2015) focused on financial inclusion is very vital towards economic development and

well structured financial system of a country. PMJDY is an ambitious financial scheme which will provide a

host of benefits including a bank account, insurance and a debit card to non-bank account holders in India.

PMJDYs target is to open 7.5 crore bank accounts by January, 2015.

Barhate and Jagtap (2014) discovered in their study financial inclusion, strategy of PMJDY and issues

related to the success of the scheme. They concluded that every new thing requires determination and

attitude towards success path. Besides that to withstand the heat of economic down surge and fight poverty,

the Jan Dhan Yojana is good mechanism.

Paramasivan and Ganeshkumar (2013) have revealed that branch density has significant impact on

financial inclusion. It is not possible to achieve financial inclusion only by creating investment awareness,

without significantly improving the investment opportunities in India.

Rajanikanta Khuntia (2014) delivered that in every household within the grasp of the banking system

there has been an ongoing process started a decade ago. In order to reduce the degree of “financial

untouchability” the new government has come up with a big bang action plan which is popularly known as

“Pradhan Mantri Jan-Dhan Yojana”. It’s a mega financial inclusion plan with the objective of covering all

households in the country with banking facilities along with inbuilt insurance coverage.

Shetty and Deokar (2014) discussed in their findings that “Pradhan Mantri Jan Dhan Yojana” is not a new

programme but there were various programmes initiated by RBI and Ministry of Finance, but due to lack of

co-ordination among people, government and RBI, the objectives of all those programme have not been

achieved till now. Formulation of programme is not sufficient for conversion of dreams into reality, but this

requires effective and transparent implementation of that programme at the ground level with the co-

ordination of government, bank and the general public.

STATEMENT OF THE PROBLEM

The Pradhan Mantri Jan Dhan Yojana (Prime Ministers Scheme for People’s Wealth) is an ambitious

scheme for comprehensive financial inclusion launched by Prime Minister of India, Narendra Modi on 28

August 2014. He had announced this scheme on his first Independence Day speech on 15 August 2014. He

declared that a bank account for each household was a "national priority.” 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 and RuPay Debit card with inbuilt accident insurance cover of


Rs. 1 lakh and RuPay Kisan Card. In next phase, micro insurance etc. will also be added. Without Financial

Inclusion, we cannot think of economic development because a large chunk of total population remains

outside the growth process. Though our country's economy is growing at one digit, still the growth is not

inclusive with the economic condition of the people in rural areas worsening further. One of the typical

reasons for poverty is being financially excluded. Though there are a few people who are enjoying all kinds

of services from savings to net banking, still in our country around 40% of people lack access to even basic

financial services like savings, credit and insurance facilities. India is second only to China in the number of

people excluded from financial facilities. Even after 68 years of independence, around ten crore households

are not connected with banking. This study highlights the valuable performance of commercial banks to

contribute to Pradhan Mantri Jan Dhan Yojana account scheme. It is more opportunity for all the income

level and financial untouchable people to travelling to banking sector. So we justify Pradhan Mantra Jan

Dhan Yojana is a boon in the present day’s population to enhance financial circulation. Hence, there is a

need to understand the performance of the commercial banks with regard to the opening of PMJDY.

OBJECTIVE

To study the commercial bank’s performance on Pradhan Mantri Jan Dhan Yojana scheme.

RESEARCH METHODOLOGY

The study is descriptive in nature. For the study secondary data were, only analyzed from websites, various

journals, reports, and newspapers.

PRADHAN MANTRI JAN DHAN YOJANA SIX PILLARS

Universal Access to Banking Facilities

Mapping of each district into Sub Service Area (SSA) catering to 1000-1500 households in a manner that

every habitation has access to banking services within a reasonable distance say 5 km by 14 August, 2015.

No Frill Account with RuPay Debit card

Account holder would be provided a RuPay Debit Card. Facility of an overdraft to every basic banking

account holder would be considered after satisfactory operation / credit history of six months.

Financial Literacy Programme

Financial literacy would be an integral part of the Mission in order to let the beneficiaries make best use of

the financial services being made available to them.

Creation of Credit Guarantee Fund

Creation of a Credit Guarantee Fund would be to cover the defaults in overdraft accounts.


Micro- Insurance

Micro- insurance provided to all willing and eligible persons by 14 August, 2018, and then on an ongoing

basis. Unorganized sector Pension schemes like Swavalamban: By 14 August, 2018 and then on an ongoing

basis. Under the mission, the first three pillars would be given thrust in the first year.

Table No: 1

No. of Account Opened Under PMJDY by Commercial Banks

S.No Month Rural % Urban % Total

1. SEP 2014 31265266 59 21713191 41 52978557

2. OCT 2014 40604949 59 28113748 41 68718697

3. NOV2014 49501384 59 33732820 41 83234204

4. DEC 2014 62348872 60 42133595 40 104482467

5. JAN 2015 75016094 60 50457195 40 125473289

6. FEB 2015 81649227 60 55154668 40 136803895

7. MAR 2015 87844803 60 59318676 40 147163479

(Source: www.pmjdy.gov.in 2014-2015)

Table no: 1 shows total no. of accounts opened under PMJDY by commercial bank. In the month of

September 2014, 52978557 accounts were opened under the PMJDY, of which 59 per cent of accounts

(31265266) were opened in rural areas, and 41 per cent of accounts (21713191) were opened in urban

places. In the month of October 2014, 68718697 accounts were opened under the PMJDY, of which 59 per

cent of accounts (40604949) were opened in rural areas, and 41 per cent of accounts (68718697) were

opened in urban places. In the month of November 2014, 83234204 accounts were opened under the

PMJDY, of which 59 per cent of accounts (49501384) were opened in rural areas, and 41 per cent of

accounts (33732820) were opened in urban places. In the month of December 2014, 104482467 accounts

were opened under the PMJDY, of which 60 per cent of accounts (62348872) were opened in rural areas,

and 40 per cent of accounts (68718697) were opened in urban places. In the month of January 2015,

125473289 accounts were opened under the PMJDY, of which 60 per cent of accounts (75016094) were

opened in rural areas, and 40 per cent of accounts (50457195) were opened in urban places. In the month of

February 2015, 136803895 accounts were opened under the PMJDY, of which 60 per cent of accounts

(81649227) were opened in rural areas, and 40 per cent of accounts (55154668) were opened in urban

places. In the month of March 2015, 147163479 accounts were opened under the PMJDY, of which 60 per

cent of accounts (87844803) were opened in rural areas, and 40 per cent of accounts (59318676) were

opened in urban places.

On the whole, a maximum of accounts (59% to 60%) were opened in rural places during the period from

September 2014 to March 2015.

RUPAY DEBIT CARD

RuPay debit card is an Indian domestic card scheme conceived and launched by the National Payments

Corporation of India (NPCI). It was created to fulfil the Reserve Bank of India’s desire to have a domestic,


open loop, and multilateral system of payments in India. RuPay debit Card facilitates electronic payment at

all Indian banks and financial institutions, and competes with MasterCard and Visa card in India. NPCI

maintains ties with discover financial to enable the card scheme to gain international acceptance.

Table No: 2

Commercial Banks Issued Rupay Debit Card

S.No Month Private

Bank

% Public Bank % Regional

Rural Bank

% Total

1. SEP 2014 144017 0.80 17316603 97 388329 2.17 17848949

2. OCT 2014 464529 1.31 33722980 95.5 1117745 3.16 35305254

3. NOV 2014 1264735 2.40 49216661 93.62 2088478 3.97 52569874

4. DEC 2014 2195593 3 73130361 86.41 9304777 11 84630371

5. JAN 2015 4593161 4 912320204 82.34 14967614 13.50 110792799

6. FEB 2015 5117247 4.19 100092148 82.11 16678823 13.68 121888218

7. MAR2015 5549767 4.22 108110088 82.23 17822870 13.55 131482725

(Source: www.pmjdy.gov.in2014-2015)

Table no: 2 reveals that in the month of September 2014, 17848949 accounts were issued rupay debit card

under the PMJDY, of which 97 per cent of accounts (17316603) were issued rupay debit cards in public

sector banks, and 0.80 per cent of accounts (144017) were issued rupay debits cards in private sector banks,

and 2.17, per cent of accounts (388329) were issued rupay debit cards in regional rural banks. In the month

of October 2014, 35305254 accounts were issued rupay debit cards under the PMJDY, of which 5.51 per

cent of accounts (337229809) were issued rupay debit cards in public sector banks, and 1.31 per cent of

accounts (464529) were issued rupay debit cards in private sector banks, and 3.16, per cent of accounts

(1117745) were issued rupay debit cards regional rural banks. In the month of November 2014, 52569874

accounts were issued rupay debit card under the PMJDY, of which 93.62 per cent of accounts (49216661)

were issued rupay debit cards in public sector banks, and 2.40 per cent of accounts (1264735) were issued

rupay debit cards in private sector banks, and 3.97 per cent, of accounts 2088478 were issued rupay debits

regional rural banks. In the month of December 2014, 84630371 accounts were issued rupay debit cards

under the PMJDY, of which 86.41 per cent of accounts (73130361) were issued rupay debit cards in public

sector banks, and 3 per cent of accounts (2195593) were issued rupay debit cards in private sector banks,

and 11 per cent of accounts (9304777) were issued rupay debit cards regional rural banks. In the month of

January 2015, 110792799 accounts were issued rupay debit cards under the PMJDY, of which 82.34 per

cent of accounts (912320204) were issued rupay debit cards in public sector banks, and 4 per cent of

accounts (4593161) were issued rupay debit cards in private sector banks, and 13.50 per cent of accounts

(14967614) were issued rupay debit cards regional rural banks. In the month of February 2015, 121888218

accounts were issued rupay debit cards under the PMJDY, of which 82.11 per cent of accounts (100092148)

were issued rupay debit cards in public sector banks, and 4.19 per cent of accounts (5117247) were issued

rupay debit cards in private sector banks, and 13.68 per cent of accounts (16678823) were issued rupay debit

cards Regional rural banks. The month of March 2015, 131482725 accounts were issued rupay debit card


under the PMJDY, of which 82.23 per cent of accounts (108110088) were issued rupay debit cards in public

sector banks, and 4.22 per cent of accounts (5549767) were issued rupay debit cards in private sector banks,

and 13.55 per cent, of accounts (17822870) were issued rupay debit cards regional rural banks.

On the whole, a maximum of rupay debit cards were issued (82.11% to 97%) in public sector banks during

the period from September 2014 to March 2015.

Table No: 3

Banking Sectors Wise Accounts Opened Under PMJDY

S. No Month Public Sector Bank Private Sector

Bank

Regional Rural

Bank

Total no. of

A/c holders

Total no of

account

holder

%

Total no of

account

holder

%

Total no

of account

holder

%

1. Sep 14 43321447 81.77 1187131 2.24 8469979 15.98 52978557

2. Oct 14 55447338 80.68 1905154 2.77 11366205 16.54 68718697

3. Nov 14 66831507 80.29 2249575 2.70 14153122 17.00 83234204

4. Dec 14 83091061 79.52 2881535 2.75 18509871 17.71 104482467

5. Jan 15 98447525 78.46 5238483 4.17 21787281 17.36 125473289

6. Feb 15 107297643 78.43 5702361 4.16 23803891 17.40 136803895

7. Mar 15 115444945 78.44 6106680 4.14 25611854 17.40 147163479

(Source: www.pmjdy.gov.in 2014-2015)

Table no: 3 indicates banking sectors wise accounts opened under PMJDY. In the month of September 2014,

52978557, accounts were opened under the PMJDY, of which 81.77 per cent of accounts (43321447) were

opened in public sector banks, and 2.24 per cent of accounts (1187131) were opened in private sector banks,

and 15.98 per cent of accounts (8469979) were opened in regional rural banks. In the month of October

2014, 68718697, accounts were opened under the PMJDY, of which 80.68 per cent of accounts (55447338)

were opened in public sector banks, and 2.77 per cent of accounts (1905154) were opened in private sector

banks, and 16.54 per cent of accounts (11366205) were opened in regional rural banks. In the month of

November 2014, 83234204, accounts were opened under the PMJDY. Off which 80.29 per cent of accounts

(66831507) were opened in public sector banks, and 2.70 per cent of accounts (2249575) were opened in

private sector banks, and 17 per cent of accounts (14153122) were opened in regional rural banks. In the

month of December 2014, 104482467, accounts were opened under the PMJDY, of which 79.52 per cent of

accounts (83091061) were opened in public sector banks, and 2.75 per cent of accounts (2881535) were

opened in private sector banks, and 17.71 per cent of accounts (18509871) were opened in regional rural

banks. The month of January 2015, 125473289 accounts were opened under the PMJDY, of which 78.46 per

cent of accounts (98447525) were opened in public sector banks, and 4.17 per cent of accounts (5238483)

were opened in private sector banks, and 17.36 per cent of accounts (21787281) were opened in regional

rural banks. In the month of February 2015, 136803895, accounts were opened under the PMJDY, of which

78.43 per cent of accounts (107297643) were opened in public sector banks, and 4.16 per cent of accounts

(5702361) were opened in private sector banks, and 17.40 per cent of accounts (23803891) were opened in


regional rural banks. In the month of March 2015, 147163479 accounts were opened under the PMJDY, of

which 78.44 per cent of accounts (115444945) were opened in public sector banks, and 4.14 per cent of

accounts (6106680) were opened in private sector banks, and 17.40 per cent of accounts 25611854 were

opened in regional rural banks.

On the whole, a maximum (78.43% to 81.77%) of accounts were opened in public sector banks during the

period from September 2014 to March 2015.

Table No: 4

Total Amount of Balance in the Accounts Opened Under PMJDY

S.No Month Balance in Account (Lakhs)

1. SEP 2014 397152.09

2. OCT 2014 518073.15

3. NOV2014 649410.6917

4. DEC 2014 835338.39

5. JAN 2015 1049962.62

6. FEB 2015 1269387.50

7. MAR 2015 1567029.41

(Source :( www.pmjdy.gov.in 2014-2015)

Table no:4 above total amount of balance in the accounts opened under PMJDY shows Rs. 397152.09 lakhs

as balance in the accounts in September 2014, and Rs. 518073.15 lakhs as balance in the accounts in

October 2014, and Rs. 649410.6917 lakhs as balance in the accounts in November2014, and Rs. 835338.39

lakhs as balance in the accounts in December2014, and Rs. 1049962.62 lakhs as balance in the accounts in

January2015, and Rs. 1269387.50 lakhs as balance in the accounts in February2015, and Rs. 1567029.41

lakhs as balance in the accounts in March 2015,

On the whole, a maximum amount of Rs. 1567029.41 recorded from September 2014 to March 2015.

Table No: 5

Total Number of Account Holders with Zero Balance Amount in PMJDY

S. No Month No. of accounts with zero balance

1. SEP 2014 40745912

2. OCT 2014 52173633

3. NOV2014 61822343

4. DEC 2014 76550950

5. JAN 2015 84473729

6. FEB 2015 85916974

7. MAR 2015 86213334

(Source: www.pmjdy.gov. in 2014-2015)

Table no: 5 explains that in the month of September 2014, 40745912 accounts were with zero balance, and

in the month of October 2014, 52173633 accounts were with zero balance, and in the month of November

2014, 61822343 accounts were with zero balance, and in the month of December 2014, 76550950 accounts

were with zero balance, and in the month of January 2015, 84473729 accounts were with zero balance, and


in the month of February 2015, 85916974 accounts were with zero balance, and in the month of March

2015, 86213334 accounts were with zero balance.

On the whole, a maximum of account holders with zero balance in amount was recorded as the period from

86213334 during the period from September 2014 to March 2015.

FINDINGS

1. A maximum of accounts (59% to 60%) were opened in rural places during the period from

September2014 to March 2015. Therefore, the scheme has given more focus on rural places.

2. A maximum of rupay debit cards were (82.11% to 97%) by public sector banks during the period

from September2014 to March 2015. Therefore, PSBs performed will in issue of rupay debit cards.

3. A maximum (78.43% to 81.77%) of accounts were opened by public sector banks during the period

from September 2014 to March 2015. Therefore PSBs concentrate more on PMJDY.

4. A maximum amount of Rs.1567029.41 was recorded as during the period from September 2014 to

March 2015.

5. A maximum amount of Rs.86213334 was recorded as during the period from balance in account is

during the period from September2014 to March 2015.

SUGGESTIONS

PMJDY scheme is a good and timing transaction for the people. Government must provide many more

schemes in banking sector to contribute to all the income level people to travel them to banking sector.

PMJDY scheme is a collaborative one for rural and urban areas. So government should give extra awareness

and banking facilities within 5 kilometres from one bank.

CONCLUSION

Reserve bank of India announced and launched many more schemes in banking sector. Banking sector is

one of the emerging ventures and blood of financial inclusion. Last five years ago RBI launched no frills

accounts but this scheme did not cover all the people and had not achieved for banking sector. Present day’s

Indian Prime Minister Narendra Modi launched Pradhan Mantri Jan Dhan Yojana scheme to totally

contribute to all the income level people willingly and to make them continuously travel to banking sector.

Pradhan Mantri Jan Dhan Yojana scheme is fully helpful to rural and urban area people in getting directly

government financial services. This study highlights commercial bank’s performance on Pradhan Mantri Jan

Dhan Yojana. Hence, it is concludes that, the PMJDY scheme has created an impressive result in the

banking sector with regard to eradication of financial untouchability in the country. Mere opening of

accounts may not fulfill the aim of the scheme, but there should be continuous operation of bank accounts to

give the real success of the scheme.


REFERENCE

1. Artta Bandhu Jena (2015). “The Pradhan Mantri Jan Dhan Yojana – A Forward Journey towards

Financial Inclusion”, TRANS Asian Research Journals. Vol.4, Issue.4.

2. Barhate G. H. and Jagtap V. R., (2014), Pradhan Mantri Jan-Dhan Yojana: National Mission on

Financial Inclusion, International Journal of Applied Research, Vol. 4, No. 12, pp.340-342.

3. Paramasivan.C and Ganeshkumar.V (2013),“Overview of Financial Inclusion in India”, International

Journal of Management & Development Studies, Vol.2, Issue.3, pp45-49.

4. Rajanikanta Khuntia (2014) “Pradhan Mantri Jan Dhan Yojana (PMJDY): A New Drive towards

Financial Inclusion in India”, Zenith International Journal of Business Economics & Management

Research, Vol.4, Issue.11, pp10-20.

5. Shetty. S., and Deokar, B. K. (2014). "Financial Inclusion Differences between the Government and

RBI?, Economic & Political Weekly, Vol.49(35), pp12-15.

Website

www.pmjdy.gov.in

www.rupay debit card Wikipedia.org

http://bcagour.blogspot.in/2015/02/6-pillars-of-pmjdy.html17.25pm27.07.2015

Economy & Finance

C.PARAMASIVAN ,PERIYAR EVR COLLEGE , TIRUCHIRAPPALLI Commercial bank’s performance on pradhan mantri jan dhan yojana