Pradhan Mantri Jan-Dhan Yojana (PMJDY)

Pradhan Mantri Jan-Dhan Yojana (PMJDY)

• Pradhan Mantri Jan-Dhan Yojana (PMJDY) - National Mission for Financial Inclusion, completes six years of successful implementation
• Ministry of Finance is committed to provide financial inclusiveness and support to the marginalized and hitherto socio-economically neglected classes. Financial Inclusion is a national priority of the Government as it is an enabler for inclusive growth. It is important as it 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. A key initiative towards this commitment is the Pradhan Mantri Jan Dhan Yojna (PMJDY), which is one of the biggest financial inclusion initiatives in the world.
• 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

Initial Features

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 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   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

Jan Dhan Darshak App

• A mobile application, was launched to provide a citizen centric platform for locating banking touch points such as bank branches, ATMs, Bank Mitras, Post Offices, etc. in the country. Over 8 lakh banking touchpoints have been mapped on the GIS App. The facilities under Jan Dhan Darshak App could be availed as per the need and convenience of common people. The web version of this application could be accessed at the link http://findmybank.gov.in.
• This app is also being used for identifying villages which are not served by banking touchpoints within 5 km. these identified villages are then allocated to various banks by concerned SLBCs for opening of banking outlets. The efforts have resulted in significant decrease in number of such villages.

Pradhan Mantri Garib Kalyan Package (PMGKP) for PMJDY women beneficieries

• As per announcement made by the Hon’ble Finance Minister on 26.3.2020, under PM Garib Kalyan Yojana, an amount of Rs. 500/- per month for three months (April’20 to June’20), was credited to the accounts of women account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY). A total of Rs. 30,705 crore have been credited in accounts of women PMJDY account holders during April-June, 2020.

Towards ensuring smooth DBT transactions:  

• As informed by banks, about 8 crore PMJDY accountholders receive direct benefit transfer (DBT) from the Government under various schemes. To ensure that the eligible beneficiaries receive their DBT in time, the Department takes active role in identification of avoidable reasons for DBT failures in consultation with DBT Mission, NPCI, banks and various other Ministries. With close monitoring in this regard through regular VCs with banks and NPCI, the number of DBT failure due to avaoidable reasons has observed significant decline from 5.23 lakh (0.20%) in Apr’19 to 1.1 lakh (0.04%) in Jun’20. 

The road ahead 

• Endeavour to ensure coverage of PMJDY account holders under micro insurance schemes. Eligible PMJDY accountholders will be sought to be covered under PMJJBY and PMSBY. Banks have already been communicated about the same.
• Promotion of digital payments including RuPay debit card usage amongst PMJDY accountholders through creation of acceptance infrastructure across India
• Improving access of PMJDY account holders to Micro-credit and micro investment such as flexi-recurring deposit etc. 

Source: PIB