NEW DELHI, May 8 -- The usage gap in India's flagship financial inclusion programme has widened further, with inactive zero-balance accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY) surging to 26% at 143.83 million at state-run banks, while falling to 36% at 6.3 million at private banks as of March 2026. The total PMJDY accounts across state-run and private banks stood at 581.8 million, with deposits reaching Rs.3.02 trillion by early April 2026. State-run banks had 449.8 million accounts, while private banks held 20.8 million. This spike in inactive accounts has been broad-based across public sector banks, which had 112.4 million dormant PMJDY accounts, or 21% of the total, at the end of March 2025. Only Indian Bank and Central Bank of India bucked the trend, showed government data reviewed by Mint. State Bank of India (SBI) reported the sharpest deterioration, with inoperative accounts more than doubling to 4.2 million, pushing its dormancy ratio up to 23% from 11%. Punjab National Bank and Bank of Baroda also saw 27% of their PMJDY accounts become inactive, while Bank of India and Union Bank of India reported dormancy rates of 36% each. Other public sector banks, including Bank of Maharashtra (20%), UCO Bank (15%) and Canara Bank (29%), also recorded increases in inoperative accounts. Though private sector banks saw inactive accounts fall to 36% at 6.3 million from 40% last March, ICICI Bank continued to report a high dormancy rate of 65%. Kotak Mahindra Bank also saw a sharp rise in dormancy to 49%. In contrast, Axis Bank, IndusInd Bank and IDBI Bank improved their ratios to 35%, 25% and 41%, respectively. HDFC Bank and IDFC First Bank maintained relatively low dormancy levels at 9% and 7%, respectively. The Reserve Bank of India (RBI) defines inactive accounts as savings accounts that remain dormant for two years, typically with no customer-initiated transactions, such as deposits, withdrawals, or transfers. Experts say inoperative accounts result from multiple issues, including migrant labourers often opening multiple accounts in different states. "There are multiple factors at play. Initially, there was some duplication in account openings, which is now being weeded out. Post-covid, there was also a need to cleanse the database. Additionally, stricter know-your-customer and Aadhaar linkage requirements have had an impact," said Charan Singh, chief executive and founder director, EGROW Foundation, a non-profit, multi-disciplinary public policy organization. "Migratory patterns of this segment, along with reduced dependence on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and direct benefit transfer (DBT) due to improving prosperity and rising economic opportunities, have also contributed to the trend," Singh added. Madhavi Arora, chief economist at Emkay Global, added that the high number of dormant accounts highlights structural issues with the PMJDY scheme launched in August 2014. "Since low-income households often do not have steady cash flows, they do not end up using these accounts. Additionally, there remains a lack of financial and digital literacy among this population. Another factor is that migrant labourers often open multiple accounts in different states, with their 'home' accounts becoming dormant over time," Arora said....