The first decade of PMJDY

While there are challenges, no one can deny the scheme's success as a catalyst for financial inclusion in India

- TAMAL BANDYOPADHYAY

On August 6, at the post-monetary policy interaction with the media, Reserve Bank of India (RBI) Governor Sanjay Malhotra spoke about serving the interest and welfare of citizens, including those at the bottom of the pyramid.

He said: "Let me underline that for us, at RBI, the interest and welfare of the citizens of India is foremost. It is the people of India, including those at the bottom of the pyramid, who are raison d'être or the reason for our being."

He followed this up by directing banks to organise camps for the renewal of know your customer (re-KYC) for Jan Dhan accounts, and micro insurance and pension schemes.

Re-KYC is the process of updating customer information. It ensures that banks have current data of their customers. This is crucial for maintaining security and compliance with regulatory standards.

Banks had started organising such camps in July and will continue to do so till the end of September in an effort to provide services at customers' doorsteps. Apart from re-KYC and opening new bank accounts, these camps are focusing on micro insurance and pension schemes for financial inclusion and to redress customer grievances.

Since Jan Dhan accounts are perceived to be low-risk accounts, banks are required to re-KYC for such accounts once in 10 years. Many of these accounts were opened in the initial years, after the Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched on August 28, 2024. In the first week, 18 million bank accounts were opened. Many accounts have slipped into the dormant category; they need to be activated to ensure the account holders are not deprived of the benefits.

An account turns dormant when it is inactive for an extended period, often over a year. To revive it, one needs to deposit or withdraw money. Banks mark accounts as dormant to prevent unauthorised activity if the account owner forgets about them.