UPSC Articles
Pradhan Mantri Jan-Dhan Yojana (PMJDY)
Part of: GS Prelims and Mains GS-II- Government Schemes
In News: The Scheme completes seven years of successful implementation
Background
- Pradhan Mantri Jan-Dhan Yojana (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:
- 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 lakh
- Funding the unfunded – Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit
- The scheme was launched based upon the following 6 pillars:
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- Universal access to banking services – Branch and BC
- Basic savings bank accounts with overdraft facility of Rs. 10,000/- to every eligible adult
- 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 Rs. 30,000 on account opened between 15 Aug 2014 to 31 January 2015
- Pension scheme for Unorganized sector
- Important approach adopted in PMJDY based on past experience:
- Accounts opened are online accounts in core banking system of banks, in place of earlier method of offline accounts opening with technology lock-in with the vendor
- Inter-operability through RuPay debit card or Aadhaar enabled Payment System (AePS)
- Fixed-point Business Correspondents
- Simplified KYC / e-KYC in place of cumbersome KYC formalities
- 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’
- RuPay Card Insurance – Free accidental insurance cover on RuPay cards increased from Rs. 1 lakh to Rs. 2 lakh 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
- Impact of PMJDY
- More than 43.04 crore beneficiaries banked under PMJDY since inception, amounting to Rs. 146,231 crore
- PMJDY Accounts have grown three-fold from 14.72 Crore in Mar’15 to 43.04 Crore as on 18-08-2021
- 55% Jan-Dhan account holders are women and 67% Jan Dhan accounts are in rural and semi-urban areas
- Out of total 43.04 crore PMJDY accounts, 36.86 crore (86%) are operative
- Total RuPay cards issued to PMJDY accountholders: 31.23 Crore
- Under PM Garib Kalyan Yojana, a total of Rs. 30,945 crore have been credited in accounts of women PMJDY account holders during Covid lockdown
- About 5.1 crore PMJDY accountholders receive direct benefit transfer (DBT) from the Government under various schemes.