Pradhan Mantri Jan-Dhan Yojana (PMJDY)

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:

• • 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.