The government is pushing private banks to expand the number of participants under the accident insurance scheme

New Delhi: The government has asked private sector banks to increase the number of customers under the Pradhan Mantri Suraksha Bima Yojana (PMSBY), particularly targeting lenders that are lagging well behind their annual targets as they seek to expand accident insurance coverage amid rising road deaths, according to two people aware of the matter.

The finance ministry has asked these lenders to step up outreach, improve enrollment efforts and use both branch and digital channels to boost participation in the scheme, which offers low-cost accident insurance to vulnerable sections and supports the government’s broader push for financial inclusion after the introduction of Jan Dhan accounts, they said, requesting anonymity.

According to data reviewed by Mint, the performance of private sector banks varies widely, with IndusInd Bank and Yes Bank performing the worst. While IndusInd Bank registered only 270,000 customers in FY26 against a target of 800,000, Yes Bank reported 130,000 registrations against a target of 430,000.

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In comparison, HDFC Bank surpassed its annual target of 27.7 million accounts in the year ended March 31, taking on 29.4 million customers. IDBI Bank also exceeded its target by recording 6.8 million enrollments against the target of 6.5 million. Among major private lenders, ICICI Bank achieved 19.3 lakh registrations against a target of 20.9 lakh.

Launched by Prime Minister Narendra Modi on 9 May 2015, PMSBY offers accidental death and full disability cover ₹2 lakh and partial disability cover ₹1 lakh at a nominal annual premium of Rs ₹20, automatically deducted from the participant’s bank account. The scheme has gained more importance with the increasing number of fatal accidents and disabilities across the country. According to the latest data from the Ministry of Roads, India will see around 488,000 road accidents in 2024, resulting in more than 177,000 deaths, the highest in the world.

Essential for Social Security

“The government considers wider PMSBY coverage essential to extend social security benefits to millions of households, especially at a time when accidental deaths and disability continue to pose a significant financial burden on families across the country,” said the first of the two people cited above.

Similarly, Axis Bank has enrolled 15.4 million customers against the target of 16.7 million. Kotak Mahindra Bank achieved 7.3 million enrollments against a target of 8 million. IDFC First Bank also recorded 3.9 million registrations against a target of 4 million.

“PMSBY enrollments reflect true financial inclusion on the ground as enrollment requires insurance coverage through debit of premiums in Jan Dhan accounts – reflecting the actual usage of open accounts. This push will not only promote financial inclusion in the truest sense but also provide social security in the form of accident and disability insurance,” said Vivek Iyer, Partner – Grant Thornton Bharat.

Emails sent to the finance ministry, the Insurance Regulatory and Development Authority of India (Irdai) and the aforementioned private banks remained unanswered till press time.

Facilitators only

Sure, banks only act as intermediaries under the Pradhan Mantri Suraksha Bima Yojana. Accident insurance is provided by partner insurers, typically state general insurers, while banks sign up customers by linking the scheme to their savings accounts with consent.

The Indian insurance sector continued its growth in 2024-25, consolidating its position as the world’s tenth largest insurance market by nominal premium volumes with a market share of 1.8%, according to a report by Swiss Re. Insurance penetration was 3.7%, life insurance 2.7% and non-life 1%.

The insurance industry issued 41.84 million contracts, collected premiums in the amount of ₹11.93 trillion, paid claims from ₹8.36 trillion and reported assets under management ₹74.44 trillion in FY 2024-25, according to the government, reflecting the scale and growing activity in the sector.

The growing role of insurance is also reflected in the financial assets of households – the total value of financial assets held by households, including savings, investments and claims. The share of insurance companies and pension funds in household financial assets also increased from 28.6% in FY 2018-19 to 29.6% in FY 2024-25, reflecting increasing financial awareness among households.