Does financial inclusion really include?

It’s a grand plan on paper. But without meeting the aspirations and anxieties of the financially marginalised, it means nothing

The Pradhan Mantri Jan Dhan Yojana (PMJDY) has seen more than 218 million new bank accounts opened and over 180 million debit cards activated as of May 2016, making it a massive exercise in financial inclusion.

However, the potential of these accounts to drive regular and consistent banking habits, key to achieving universal financial inclusion, is yet to be exploited. Dormancy, despite significant reductions from about 67 per cent in January 2015, remains at about 26 per cent in May 2016. While average balance in active accounts has doubled from ₹836 to ₹1,700 in this period, it has the potential to go higher as people start using their accounts more frequently. If the PMJDY is to realise its vision, it is important that we understand the reasons for the current situation.

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