Pradhan Mantri Jan Dhan Yojana

Pradhan Mantri Jan Dhan Yojana

Introduction

The National Mission of Financial Inclusion named as the Pradhan Mantri Jan Dhan Yojana seeks to integrate the poorest of the poor with bank accounts.

About PMJDY:

Announced on 15th August 2014, PMJDY is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.

Objectives:

  • To ensure access of financial products & services at an affordable cost.
  • Use of technology to lower cost & widen reach.

Basic tenets of the scheme:

Banking the unbanked –

  • Opening of basic savings bank deposit (BSBD) account with minimal paperwork, relaxed KYC, e-KYC, account opening in camp mode, zero balance & zero charges.

Securing the unsecured –

  • Issuance of Indigenous Debit cards for cash withdrawals & payments at merchant locations, with free accident insurance coverage of Rs. 2 lakhs.
  • Funding the unfunded – Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit.

Salient features of the scheme

  • All households across the country – both rural and urban are to be covered under the scheme.
  • Bank accounts will be opened for 15 crore poor persons.
  • All bank accounts opened under the scheme are to have an overdraft facility of Rs 5,000 for Aadhar-linked accounts after satisfactory operation in the account for 6 months.
  • Issuance of RuPay Debit Card with inbuilt Rs 2 lakh personal accident insurance cover.
  • The increased coverage amount of Rs. 2 lakh is for PMJDY accounts opened after 28.08.2018.
  • A minimum monthly remuneration of Rs 5,000 to business correspondents who will provide the last link between the account holders and the bank.

Implementation of the scheme

  • The mission will be implemented in two phases, the details of which are as follows.
  • Phase I – 15 August 2014 – 14 August 2015
  • Universal access to banking facilities for all households across the country through a bank branch or a fixed point Business Correspondent (BC) within a reasonable distance.
  • To cover all households with atleast one basic banking account with RuPay Debit Card with inbuilt Rs 1 lakh accident insurance cover.
  • Financial literacy programme to be taken to the village level.
  • Expansion of Direct Benefit Transfer under various government schemes through bank accounts of the beneficiaries.
  • Issuance of Kisan Credit Card is also proposed
  • Phase II – 15 August 2015 – 14 August 2018
  • Providing micro-insurance to the people.
  • Unorganised sector pension schemes like Swavalamban through the Business Correspondents.
  • Phase III – beyond 14 August 2018
  • The flagship financial inclusion program (PMJDY) will focus on opening accounts from “every household to every adult”.
  • Existing Over Draft (OD) limit of Rs 5,000 to be raised to Rs 10,000.
  • There will not be any conditions attached for OD upto Rs 2,000.
  • Age limit for availing OD facility to be revised from 18-60 years to 18-65 years.
  • Under the expanded coverage from “every household to every adult”, accidental insurance cover for new RuPay card holders to be raised from Rs 1 lakh to Rs 2 lakh to new PMJDY accounts opened after 28.8.18.

The scheme is Based upon the following 6 pillars:

Universal access to banking services –

  • Branch and Banking Correspondents.
  • Basic savings bank accounts with overdraft facility (OD) of Rs. 10,000/- to every household.

Financial Literacy Program–

Promoting savings, use of ATMs, getting ready for credit, availing insurance and pensions, using basic mobile phones for banking.

Creation of Credit Guarantee Fund –

To provide banks some guarantee against defaults.

Insurance –

Accident cover up to Rs. 1,00,000 and life cover of 30,000 on account opened between 15 Aug 2014 to 31 January 2015.

Pension scheme for Unorganized sector.

Pradhan Mantri Jan Dhan Yojana

Extension of PMJDY with New features:

  • Focus shift from Every Household to Every Unbanked Adult.
  • RuPay Card Insurance –
  • Free accidental insurance cover on RuPay cards increased from Rs. 1 lakh to Rs. 2 lakhs for PMJDY accounts opened after 28.8.2018.
  • Enhancement in overdraft facilities –
  • OD limit doubled from Rs 5,000 to Rs 10,000; OD upto Rs 2,000 (without conditions). Increase in upper age limit for OD from 60 to 65 years.

Pradhan Mantri Jan Dhan Yojana

Key facts:

  • According to the latest data, the total balance in these basic bank accounts stood at ₹99,752 crore with 35.50 crore beneficiaries.
  • Public sector banks have the lion’s share in total balance at ₹79,177 crore, followed by regional rural banks and private sector banks maintaining ₹17,648 crore and ₹2,926 crore, respectively.
  • The scheme focusses on rural areas with primacy given to women. Of the 35.50-crore account holders, those from rural and semi-urban regions were 21 crore. Female beneficiaries were 18.88 crore.
  • Total balance under the scheme, launched on August 15, 2014, grew faster in the last there years, which was boosted by demonetisation in November 2016.
  • It gathered momentum last year and gained rapid pace in the last six months, leading to scepticism on the possible link between elections and spurt in balances.
  • The average balance in PMJDY accounts has also been going up.

Pradhan Mantri Jan Dhan Yojana