Leveraging Pradhan Mantri Jan Dhan Yojana (PMJDY)



Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched by the Hon’ble Prime Minister of India on August 28, 2014. PMJDY is a National Mission on Financial Inclusion encompassing an integrated approach to bring about comprehensive financial inclusion of all the households in the country. Objective of PMJDY is to ensure access to various financial services like availability of basic savings bank account, access to need based credit, remittances facility, insurance and pension to the excluded sections i.e. weaker sections & low income groups.

PMJDY is being executed by Government of India in a mission mode. It comprises of following six pillars to provide its beneficiaries with:

  • Universal access to banking facilities;
  • Basic bank account with overdraft facility and RuPay Debit card with built in accidental insurance;
  • Financial literacy to enable use of financial products;
  • Creation of Credit Guarantee fund to cover defaults in overdraft accounts;
  • Microinsurance facility for all account holders and;
  • Unorganised sector pension schemes such as Swavalamban.
Additionally the scheme envisages
  • Channelling all Government benefits (from Centre, State and Local Body) to the beneficiaries’ accounts and pushing the Direct Benefits Transfer (DBT) scheme of the Union Government.
  • Addressing technological issues like poor connectivity, on-line transactions.
  • Utilising and encouraging mobile transactions through telecom operators and their established centres as cash out points.
  • To reach out to the youth of this country to participate in the Mission Mode Programme.

Assessment of PMJDY: Studies Conducted by MicroSave

In collaboration with Bill and Melinda Gates Foundation (BMGF) MicroSave conducted three waves of assessments of Bank Mitrs (BMs) and their customers for PMJDY over a span of 15 months (Oct-14 to Dec 15).

Key Objectives
  • Measure the extent of on ground presence of BMs (Availability);
  • Analyse the nature and quantity of transactions conducted by agents (BMs);
  • Assess the quality of services provided by BMs to their customers;
  • Analyse the customer preferences for a transaction point;
  • Track the training, monitoring and marketing support provided by banks;
  • Evaluate agents’ satisfaction levels vis-a-vis their remuneration and;
  • Analyse the data to create insights and advisories for operational and policy improvements.
Methodology/ Approach

A mixed-method approach entailing both quantitative and qualitative interviews was adopted for the three waves of assessments. The selection of districts involved purposive sampling basis latest CRISIL Inclusix scores of the districts.

The selection of BMs was random based on a criteria of ‘20 per cent of the total BMs or at least 30 BMs (whichever is higher) in each district. A proportionate bank-wise allocation of the sample was also considered for BM selection for quantitative research under study. Random selection of customers (3 t0 5) at each BM location

MicroSave’s in-house team of qualified researchers conducted qualitative research primarily using in-depth personal interviews to understand the nuances behind the numbers. 5% of the total sample was selected for qualitative assessments. Minimum of six BMs were covered per district for the purpose of qualitative assessments.

Quantitative data collection was done by survey agencies using CAPI technique.

Coverage and Sample

PMJDY Wave-I and Wave-II was conducted in similar geographies of 9 states and 41 districts to do a comparative analysis of key parameters of BM assessment. PMJDY Wave-III was nationally representative survey, with a coverage of 18 states and 42 districts.

The number of BMs sampled for three assessments were 2039, 1700 and 1627 for Wave-I, Wave-II and Wave-III respectively. The number of PMJDY account holders (customers) interviewed were 8,797, 4514 and 4859 for Wave-I, Wave-II and Wave-III respectively

PMJDY Findings: Key Comparisons of Wave-I, II & III

Over the period of 15 months, MicroSave conducted three waves of assessments of Bank Mitrs (BMs) and their customers for assessing Pradhan Mantri Jan Dhan Yojana (PMJDY). Researchers interviewed 5,366 BMs and 18,170 PMJDY customers during the period.

Key objective of assessment was to assess “BM network vibrancy” and provide a comparative analysis of BM and customer outreach indicators and, BM operational effectiveness and infrastructure readiness.

Researchers interviewed 2,039 and 1,700 Bank Mitrs from 9 states and 41 districts during Wave I and II. For Wave III 1,627 BMs were assessed from 17 states and 42 districts. The number of PMJDY account holders (customers) interviewed were 8,797, 4514 and 4,859 for Wave-I, Wave-II and Wave-III respectively. Findings have been impressive.


1. BM availability

8% increase in BM availability. A cleaner and up-to-date BM list on PMJDY website has led to high traceability of BMs, as compared to Wave I and II. Only 50 BMs (3%) could not be traced, out of 1,627 BM locations visited by research teams.


2. Transaction readiness

A BM is defined as “transaction ready” when a customer walking into a BM outlet can conduct transactions (a/c opening/withdrawal/deposit). It surged by 24% from the time of PMJDY’s launch. 81% is calculated as a percentage of BMs interviewed, and not the total sample.


3. BM Monthly revenues

Average monthly income of BMs has increased by 19% from wave-II owing to increased transaction numbers (38% in deposit and 44% in withdrawal) and transaction volume (16% in deposit and 14% in withdrawal).


4. BM monthly transactions

52% increase in average transactions/ month from wave-I. This increase can be attributed to shift in focus from customer acquisition to customer retention leading to uptake of customer transactions. Interestingly rural BMs are now handling more transactions (300 per month) than their peri-urban counterparts (275 per month).


5. Rupay card status

85% of PMJDY accounts were issued RuPay debit cards; however, only half the cards delivered. Of the 47% customers with Rupay card, only 79% received their PIN. Of these, only 89% are Rupay activated. 79% of the Rupay activated customers have transacted through Rupay card.


6. Aadhaar seeding status

62% Aadhaar enrolled customers find financial services to be more convenient and quicker. 40% of customers (who agreed that Aadhaar helps in making financial transaction) said that it facilitates quick and easy financial transactions. Only 20% said that Aadhaar has helped them receive government benefits such as LPG subsidy (DBTL) smoothly.


7. PMJDY as first account

Customer account duplication, i.e., customers who hold another bank account in addition to PMJDY account, stands at 33%. This is a significant increase from last two rounds of PMJDY survey and can be attributed to target based account opening approach taken by banks.


8. Insurance, pension, OD wave-III

7% of customers have received an overdraft - of an average value of INR 815. The uptake of PMSBY (60%) is higher than PMJJBY (49%) and Atal pension Yojana (APY) (6%) due to its low-cost.


The following recommendations have been made basis the key insights derived from the three waves

  • Convergence of G2P DBT and PMJDY to build transaction volumes
  • Minimum capitalization required for BC companies given the capital intensive business
  • Ensure service level commitment from banks by not letting BMs close outlets for >5 days, ever (force majeure events excluded)
  • Data analytics based credit scoring models need to be piloted for PMJDY accounts
  • Standard Operational guidelines for Banks, BCNMs and BMs to ensure GPS tagging, digital attendance and audit policies
  • Harness agency models potential to transform into a “White Label BM”- interoperable and independent business unit capable of facilitating transactions of multiple providers
  • Enhance commissions on transactions in place of A/c opening to promote more transactions by BMs
  • Employ one “financial inclusion” officer for every 2/3 rural branches to cater to BMs
  • Create a robust “toll free” enquiry system for BMs and customers for awareness and grievance redressal
  • Ensure delivery of insurance and pension policy documents to customers upon enrolment,
  • Apply behavioral economics to understand reasons for dormancy and product preference of the customers.
  • Ensure regular trainings of BMs on PMJDY scheme features , products and customer service delivery

If you have any queries please write to us at info@microsave.net