India to utilise PMJDY a/c to extend pension,credit facilities

Country a step closer to becoming cashless economy, joins a UN initiative that enables transition to electronic payments

India aims to utilise bank accounts created under Pradhan Mantri Jan Dhan Yojana to extend insurance, pension and credit facilities to those excluded from these benefits, Finance Minister Arun Jaitley has said, as the country joined a UN initiative to enable nations transition to electronic payments.

Taking a step closer to becoming a cashless economy, India has joined the 'Better Than Cash Alliance', a United Nations Capital Development Fund (UNCDF) initiative that helps enable countries transition to electronic payments.

The announcement comes on the first anniversary of Prime Minister Narendra Modi's flagship financial inclusion programme Pradhan Mantri Jan-Dhan Yojana (PMJDY).

The new partnership with the Better Than Cash Alliance, made up of governments, companies, and international organisations, is an extension of Indian Government's commitment to reduce cash in its economy, according to a statement released here by the alliance.

"The scale of ambition of Pradhan Mantri Jan-Dhan Yojana has been much higher than for any other financial inclusion initiative in the past. The project has been instrumental in bringing almost all families of the country into the formal financial system and enabling citizens at grassroots level to perform financial transactions and keep their hard-earned money safe," Jaitley said in the statement.

"As a next step, the aim is to utilise these accounts for extending insurance, pension, and credit facilities to those who are currently excluded from these benefits," he said, adding that India has been recognised by the Guinness World Records for opening over 1.8 crore bank accounts in a week.

Under PMJDY, in one year, 175 million new accounts have been opened, with deposits totaling more than $3.4 billion.

India's announcement comes ahead of next month's United Nations special summit here when Modi and other world leaders will launch the adopted Sustainable Development Goals (SDGs).

Digital financial services are a key tool for the implementation of the goals, and advocates hope India's leadership inspires other governments to harness the power of digital payments as a strategy for achieving the SDGs, the statement added.

"India's leadership and progress are inspirational for countries around the world," said Dr Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance.

"By making the digitization of payments to achieve financial inclusion a top priority, the Indian Government is showing its commitment to improving the lives of its people and driving inclusive growth.