Pradhan Mantri Jan-Dhan Yojana (PMJDY)

  • IASbaba
  • August 30, 2021
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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


  • 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:
    • 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.

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