Pradhan Mantri Jan Dhan Yojana (PMJDY) – National Mission for Financial Inclusion, completes nine years of successful implementation
Key Points on PMJDY
- The PMJDY was announced by Prime Minister Shri Narendra Modi in his Independence Day address on 15th August 2014.
- The 9 years of PMJDY-led interventions and digital transformation have revolutionised financial inclusion in India.
- Financial Inclusion (FI) promotes equitable and inclusive growth as well as delivery of financial services at an affordable cost to vulnerable groups such as low-income groups and weaker sections that lack access to basic banking services.
- Financial Inclusion also brings savings of the poor into the formal financial system and provides an avenue to remit money to their families in villages besides taking them out of the clutches of the usurious money lenders
Notable Achievements of PMJDY
- More than 50 crore beneficiaries banked under PMJDY since inception
- Total deposit balances under PMJDY Accounts stand at Rs. 2,03,505 crore
- PMJDY accounts grow 3.4 -fold from 14.72 crore in March 2015 to 50.09 crore as on 16-08-2023
- Around 56% Jan-Dhan account holders are women and around 67% Jan Dhan accounts in rural and semi-urban areas
- 33.98 crore RuPay cards issued to PMJDY accountholders
- Guinness World Records has acknowledged the PMJDY’s success, certifying that the “Most bank accounts opened in one week as part of the Financial Inclusion Campaign is 18,096,130 and was achieved by the Department of Financial Services, Government of India.”
What is Pradhan Mantri Jan Dhan Yojana (PMJDY)?
- PMJDY was announced by PM Narendra Modi in his Independence Day address on 15th August 2014.
- The National Mission for Financial Inclusion aims to provide affordable access to financial services such as banking, savings and deposit accounts, remittance, credit, insurance, and pensions.
Objectives Of PMJDY
- To ensure that financial goods and services are available at a reasonable cost.
- Inclusion in the financial system.
- Technology is being used to reduce costs and expand reach.
Core Components of the PMJDY 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 lakh
- Funding the unfunded – Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit
The Six Pillars of PMJDY
Six Pillars of the Scheme:
- Universal Access to Banking Services – Branch and Banking Correspondents.
- Basic Savings Bank Accounts with OverDraft (OD) Facility of Rs. 10,000/- to every household.
- Financial Literacy Program– Promoting savings, use of ATMs, using basic mobile phones for banking, etc.
- Creation of Credit Guarantee Fund – To provide banks some guarantee against defaults.
- Insurance – Free accidental insurance cover on RuPay cards increased from Rs. 1 lakh to Rs. 2 lakh for PMJDY accounts opened after August 2018.
- Pension Scheme for the Unorganized sector.
Key Features of PMJDY
- Basic savings bank accounts with overdraft facility of Rs. 10,000/- to every eligible adult
- Financial Literacy Programme– 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 Rs. 30,000 on account opened between 15 Aug 2014 to 31 January 2015
- Pension scheme for Unorganised sector
Extension Of PMJDY With New Features
The Government decided to extend the comprehensive PMJDY program beyond 28.8.2018 with some modifications
- Focus shift from ‘Every Household’ to Every Unbanked Adult’
- Free accidental insurance cover on RuPay cards increased from Rs. 1 lakh to Rs. 2 lakh for PMJDY accounts opened after 28.8.2018.
- Overdraft facilities 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
Impact Of PMJDY
- PMJDY has been the foundation stone for people-centric economic initiatives. Whether it is direct benefit transfers, COVID-19 financial assistance, PM-KISAN, increased wages under MGNREGA, life and health insurance cover, the first step of all these initiatives is to provide every adult with a bank account, which PMJDY has nearly completed.
- One in 2 accounts opened between Mar’14 to Mar’20 was a PMJDY account.
- Within 10 days of nationwide lockdown more than about 20 crore women PMJDY accounts were credited with ex-gratia.
- Jandhan provides an avenue to the poor for bringing their savings into the formal financial system, an avenue to remit money to their families in villages besides taking them out of the clutches of the usurious money lenders.
- PMJDY has brought the unbanked into the banking system, expanded the financial architecture of India and brought financial inclusion to almost every adult.
- In COVID-19 times, Direct Benefit Transfer (DBTs) have empowered and provided financial security to the vulnerable sections of society.
- An important aspect is that DBTs via PM Jan Dhan accounts have ensured every rupee reaches its intended beneficiary and preventing systemic leakage.
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