The power of PMJDY in fostering rural prosperity

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India’s rural transformation over the past decade has been shaped by a series of visionary interventions by the Government of India. Among these, the Pradhan Mantri Jan Dhan Yojana (PMJDY) stands out as a foundational reform that has redefined financial inclusion and laid the groundwork for rural prosperity. From the perspective of the National Bank for Agriculture and Rural Development (Nabard), PMJDY is not just a banking scheme but a catalyst for empowerment, resilience, and inclusive growth.

A Landmark in Financial Inclusion

Launched in August 2014 to bank the unbanked and serve underserved areas, PMJDY has covered over 56 crore beneficiaries as of July 2025. The aggregate deposit balance stands at ₹2.6 lakh crore, with 66.7 per cent of accounts located in rural and semi-urban areas. This scale and reach have made PMJDY one of the largest financial inclusion programs globally.

For NABARD, which has long worked to deepen rural credit and institutional development, PMJDY has become a strategic enabler. It has allowed NABARD to expand the reach of its programs, whether through Self Help Groups (SHGs), Farmer Producer Organizations (FPOs), or cooperative banks, by ensuring that every participant has a secure and accessible financial identity.

Direct Benefit Transfers: A Game-Changer

One of the most transformative outcomes of PMJDY has been its role in facilitating Direct Benefit Transfers (DBTs). The Government of India has institutionalized DBTs across a wide range of schemes like PM-KISAN, MGNREGA, PMAY, Ujjwala etc ensuring that subsidies, wages, and entitlements reach beneficiaries directly, transparently, and efficiently.

Fiscal transfers – both in cash and kind -now account for approximately 10% of average monthly household income in rural areas. This has reduced leakages, eliminated intermediaries, and built trust in formal financial systems. For example, under PM-KISAN, over ₹2.8 lakh crore has been transferred directly to farmers’ PMJDY accounts, strengthening their purchasing power and creditworthiness.

Empowering Women through Jan Dhan: A Silent Revolution

One of the most profound impacts of PMJDY has been its role in empowering rural women. With over 29 crore women beneficiaries, PMJDY has become a gateway to financial autonomy and social inclusion.

For NABARD, which has long championed the SHG movement and women-led development, the PMJDY has proved to be a true game-changer. By ensuring that every SHG member has an individual bank account, PMJDY has enabled direct benefit transfers (DBTs) into women’s accounts, a lifeline that became particularly critical during emergencies such as the Covid-19 pandemic. It has also strengthened the SHG-bank linkage by enhancing transparency and credit access, while Nabard’ss financial literacy campaigns have further empowered women to make informed

financial decisions. The scheme has facilitated entrepreneurship and income generation for women-led enterprises and expanded access to social security programmes like PMJJBY and PMSBY, thereby embedding resilience and dignity in women’s economic participation.

In essence, PMJDY has given rural women a seat at the financial table and transformed them into active participants in India’s development journey.

Bridging the Digital Divide

PMJDY is not just about financial access – it is a gateway to digital inclusion. The Government of India’s JAM trinity – Jan Dhan, Aadhaar, and Mobile – has created a robust platform for delivering services, verifying identities, and enabling digital payments.

As per CAMS 2025, 64.6 per cent of rural individuals aged 15 and above own mobile phones, 82.9 per cent can use them, and 83.3 per cent have internet access. Nabard has built on this foundation to structure a pilot of Central Bank Digital Currency (CBDC) for tenant farmers in Andhra Pradesh and Odisha.

Furthermore, Nabard is building on this foundation through new-generation initiatives, deploying multilingual AI voice agents in cooperative banks to serve non-literate and digitally excluded populations. These agents, powered by PMJDY-linked data, will allow rural customers to check balances, apply for loans, and receive alerts in their native languages. These pilots enable programmable credit, targeted subsidies, and traceable transactions, all anchored in PMJDY accounts and demonstrate how PMJDY can be a launchpad for next-generation financial technologies.

Savings Culture and Credit Formalization

PMJDY has promoted a savings culture in rural India. NABARD All India Financial Inclusion Survey 2021-22 (NAFIS) shows that 65.6 per cent of rural households saved in 2021–22, up from 50.6 per cent in 2016–17. The average PMJDY deposit balance rose to ₹4,655 in July 2025, up from ₹1,007 in March 2015.

On the credit side, India’s progress in formalizing rural credit has been impressive. Reliance on non-institutional sources has declined from 90 per cent in 1950 to about 25 per cent. As per NAFIS, 42 per cent of rural households borrowed during the year and 52% had outstanding debt. RBI’s Basic Statistical Returns (BSR) data for March 2025 shows 19.8 crore loan accounts in rural and semi-urban areas, with an outstanding loan size of ₹45.3 lakh crore.

Rural Prosperity Indicators

The impact of deepening financial inclusion is visible in rising prosperity. Nabard’s bi-monthly survey shows that 76.6 per cent of rural households reported increased consumption in the past year, and a majority expect improved income and employment conditions.

Strengthening Rural Financial Institutions

To take financial inclusion to the next level under PMJDY, the Government is driving end-to-end computerisation of Primary Agricultural Credit Societies (PACS) and has facilitated setting up of Sahakar Sarathi Private Limited (SSPL) to equip Rural Cooperative Banks with modern, centralized digital solutions. In parallel, the consolidation of Regional Rural Banks under the ‘One State, One RRB’ principle

promises to be a true game changer by strengthening reach, efficiency, and the financial inclusion architecture of India.

Challenges and the Road Ahead

Despite its success, PMJDY faces certain challenges. 16 per cent of accounts are inactive, and India still has one of the largest populations of unbanked adults due to its size. Further only a small share of rural India is cyber-aware with just 12.6 per cent of individuals aged 15 and above know how to report a cybercrime. This glaring gap underlines the urgent need for digital safety awareness and capacity building in villages.

Nabard, under the guidance of the Department of Financial Services, Government of India, is actively tackling these challenges through a mix of capacity-building initiatives, financial literacy campaigns, and innovative partnerships with fintechs and civil society organizations. Looking ahead, the future of financial inclusion lies in deepening and expanding the Jan Dhan ecosystem.

Nabard’s vision for the next phase includes Jan Dhan 2.0, which would integrate savings, credit, insurance, and pensions into a single, unified rural financial product. It also envisions Jan Dhan for Enterprises, extending the successful model to rural MSMEs and Farmer Producer Organizations (FPOs) to meet their working capital needs and enable digital payments. Further, Jan Dhan for Climate seeks to prepare rural India for a sustainable future by linking accounts to carbon credits, green bonds, and climate risk alerts, thereby embedding resilience into the financial architecture of the countryside.

Conclusion

PMJDY is a model of visionary policy executed in mission mode. For Nabard, it is more than a scheme, it is a strategic enabler of rural prosperity. By embedding PMJDY into its programs, Nabard is building a future where every farmer, every woman, and every rural household is financially empowered, digitally connected, and climate-resilient.

As we move forward, the synergy between PMJDY and NABARD’s mission will continue to unlock new pathways for inclusive and sustainable development. The power of PMJDY lies not just in numbers, but in the lives it touches and the futures it shapes.

The writer is Chairman, NABARD

Published on September 1, 2025