Mr Narendra Modi, the Prime Minister of India, reportedly announced the launch of a new financial inclusion program, entitled “Pradhan Mantri Jan Dhan Yojana,” which means “Prime Minister’s People’s Wealth Mission”[1] and is intended to extend “banking, credit, insurance and pension services”[1] to every household in the country.
The first phase with immediate effect, has set the goal of achieving “universal banking”[1] by August 2015. The second phase, which involves extending insurance and pension services to poor people, is to commence in August 2015, with a target completion date of August 2018.
Under the program, each new bank account holder will receive a “passbook”[2] and a “RuPay Debit Card”[2], issued under the state-owned National Payments Corporation. The account holders will also receive an overdraft facility of INR 5,000 (USD 83), accident cover of INR 100,000 (USD 1,651) and life insurance cover of INR 30,000 (USD 495).
The Swabhimaan campaign, a financial inclusion scheme launched in 2011, targeted villages with populations above 2,000 individuals. It reached approximately 74,000 settlements with installations of traditional and mobile banking facilities. According to estimates by India’s Ministry of Finance, 75 million households in the country are financially excluded and a further 600 million people are “under-banked”[1] as of 2014.
By Alíz Crowley, Research Associate
Sources and Additional Resources
[1] The New Indian Express, Modi Delivers on Promised Financial Inclusion Mission
[2] Gulfnews.com, Indian banks push ahead with financial inclusion drive
MicroCapital, April 1, 2014, Government Efforts to Achieve Financial Inclusion in India; Index-based Insurance in South, Southeast Asia; Microinsurance Claims Management
MicroCapital, February 26, 2014, Inclusix Index of Financial Inclusion in India; Obstacles to Access in Microinsurance; Microfinance in Kenya
MicroCapital, June 3, 2011, Union Bank of India (UBI) Launching Microfinance Schemes Under “unioninclusions”
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