Public Sector Banks Close 1.5 Million Inactive Jan Dhan Accounts in April

Public-sector banks (PSBs) carried out a one-time exercise in April to close nearly 1.5 million inactive zero-balance accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY). 

As per news reports, this action was taken to eliminate duplication and weed out accounts that were no longer functional. Introduced in August 2014 by Prime Minister Narendra Modi, the scheme was designed to extend banking access to India’s unbanked population and has now completed 11 years.

Rising Concerns Over Dormant Accounts

As of July-end, PMJDY accounts stood at 560.3 million, of which 130.4 million, that is roughly 23% were classified as inoperative, Minister of State for Finance Pankaj Chaudhary informed Parliament in a written reply. 

Uttar Pradesh leads the list with 27.5 million such accounts, followed by Bihar with 13.9 million and Madhya Pradesh with 10.7 million. Under Reserve Bank of India (RBI) norms, savings accounts are considered inoperative if they remain without transactions for more than two years. 

To tackle this, the finance ministry noted that banks are engaging with account holders and have conducted over 177,000 camps since July to promote financial literacy and link beneficiaries with government schemes.

Global Perspective and Underlying Causes

The World Bank’s “Global Findex 2025” report highlighted that more than one-third of India’s bank account holders are not actively using their accounts, with Jan Dhan accounts being cited as a major contributor to this trend. 

“One reason for India’s high share of account inactivity may be that many of these accounts were opened as part of the Indian government’s Jan Dhan  Yojana to increase account ownership,” the report said, as per news reports.

Read More: Top 5 Public Sector Banks with Highest Employee Count in FY25!

Conclusion

While PMJDY has been instrumental in widening financial access, the high share of inactive accounts reflects the challenges of sustaining engagement. The ongoing clean-up and literacy drives suggest that the government and banks are focusing not only on account creation but also on long-term usage and efficiency of the financial inclusion model.

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