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The IUP Journal of Bank Management
Mobile Banking and the PMJDY: Evidence from an Indian State.
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Financial services should be made available at affordable costs to all segments of the society. Moreover, as banking services are in the nature of public good, it is essential that they are available to the entire population without any discrimination. Then only total financial inclusion can be achieved. According to Pradhan Mantri Jan-Dhan Yojana (PMJDY), the ‘National Mission on Financial Inclusion’ launched in August 2014, technology can play a major role in financial inclusion in the country. The main hurdle to financial inclusion in India is the large population and low volumes, thus leading to unnecessary costs. The only way to bring down costs to an affordable level and to improve the reach of financial services to the remotest corner of the country is by effectively leveraging technology, specifically mobile technology. The mobile phone revolution that is transforming our country could also turn into a banking revolution in terms of reach and transaction. Moreover, with the advent of smartphones, almost all banking transactions are now possible through mobile banking. In India, mobile banking has received a thrust from both RBI and Government of India. However, its overall penetration remains low. This paper makes an attempt to highlight the findings of research carried out by the author to analyze the usage of mobile banking at two separate time intervals—pre-PMJDY (before the yojana) and post-PMJDY—in a specific Indian state. The author also provides suggestions as to how to leverage this technology and improve its penetration to further financial inclusion in the country.

 
 
 

Though India is the second most important developing economy in the world, the benefits of its banking services are not enjoyed by a larger mass of people. For achieving long-term sustainable growth, there should be a balance between the rural and urban economic growth. Financial inclusion plays an important role in achieving this objective.

Leeladhar (2006) mentions that “financial inclusion is delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups”. According to Leeladhar, unrestrained access to public goods and services is the sine qua non of an open and efficient society. Sharma and Kukreja (2013) studied the role of financial inclusion in strengthening India’s position in relation to other developing nations. They concluded that financial inclusion plays an important role in the economic and social development of the society, and still more efforts are to be made to achieve this objective.

 
 
 
Bank Management Journal,Pradhan Mantri Jan-Dhan Yojana (PMJDY),National Mission on Financial Inclusion,Usage of Mobile Banking