Pradhan Mantri Jan Dhan Yojana (PMJDY):
Even after 60 years of independence, a large section of Indian population still remained unbanked. In the recent years the government and Reserve Bank of India has been pushing the concept and idea of financial inclusion. The financial inclusion plan aims at providing easy access to financial services to those sections of the society who are deprived of it so far at affordable cost thereby bringing them into the mainstream of financial sector. RBI set up the Khan Commission in 2004 to look into financial inclusion and the recommendations of the commission were incorporated into midterm review of the policy (2005-2006) and urged banks to review their existing practices to align them with the objective of financial inclusion.
Honorable Prime Minister Narendra Modi announced Pradhan Mantri Jan Dhan Yojana (PMJDY) for comprehensive financial inclusion on his first Independence Day speech on 15th August, 2014. The scheme was formally launched on 28th August, 2014 with a target to provide universal access to banking facilities starting with Basic banking accounts with overdraft facility of Rs. 5,000 after six months and RuPay Debit Card with inbuilt accident insurance cover of Rs. 1 Lakh.
Two phases of this scheme has been determined in which the objective of financial inclusion of weaker section of the society is supposed to be achieved. The PMJDY scheme is being implemented in two phases. The first phase was to be 15th August, 2014 to 14th August, 2015 and the second phase from 15th August, 2015 to 14th August, 2018.
Phase I (15 Aug, 2014 - 14 Aug, 2015)
- Universal access to banking facilities:-
The first and basic pillar of PMJDY was to reach out to the financially excluded segments of the population and ensure access to banking facilities for all households across the country through a bank branch or a fixed point Business Correspondent (BC) within a reasonable distance. Mapping of each district into Sub Service Area (SSA) catering to 1000-1500 households in a manner that every habitation has access to banking services within 5 KM has been completed in August, 2015.
- Providing Basic Banking Accounts for saving & remittance and RuPay Debit card with inbuilt accident insurance cover of Rs. 1 lakh: -
The second pillar of this plan envisages providing basic bank accounts to all adult citizens starting with coverage of all households along with providing RuPay Debit Card with inbuilt accidental insurance cover of Rs. 1 lakh. All bank accounts opened under the scheme are to have an overdraft facility of Rs. 5000/- after satisfactory operation for six months.
- Financial Literacy Programme:-
This Pillar envisages that financial literacy programmes have to be taken to the village level. Financial Literacy was made an integral part of the Mission to enable the beneficiaries to make the best use of the financial services being made available to them.
Phase II (15 Aug, 2015 - 15 Aug, 2018)
- Creation of Credit Guarantee Fund: -
The fourth pillar of this plan is the creation of a Credit Guarantee Fund to cover the defaults in overdraft accounts.
The 5th Pillar of the PMJDY is to provide micro insurance to the people. Encouraged by the overwhelming success of PMJDY, as also with the objective of broadening financial inclusion in India, Hon’ble Prime Minister in May 2015, launched two flagship Social Security Schemes relating to Insurance which are the part of Phase II of the PMJDY. These schemes include Pradhan Mantri Suraksha Bima Yojana (PMSBY) an accidental insurance scheme and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) a life insurance scheme, both having insurance cover of Rs. 2.00 lacs.
- Unorganized sector Pension schemes like Swavalamban: -
The sixth and final pillar of this plan relates to old age income security to encourage workers in the un-organized sector to save voluntarily for their old age. In this regard, a flagship scheme ‘Atal Pension Yojana’ was launched by Hon’ble Prime Minister in May 2015 having a pension option of Rs. 1000 to Rs. 5000 per month.
Benefits of the Pradhan Mantri Jan Dhan Yojana.
- Account holders will be provided zero balance bank account with RuPay debit card, in addition to accidental insurance cover of Rs. 1 Lakh.
- Those who open accounts by January, 2015 over and above the 1 lakh accident, they be given life insurance cover of Rs. 30,000.
- After six months of opening of the bank account, holders can avail 5,000 overdrafts from the bank. Overdraft facility is of great support to the people to come out of the clutches of pawnbrokers who change an exorbitant rate of interest.
- With the introduction of new technology introduced by National Payments Corporation of India (NPCI), a person can transfer funds, check balance through a normal phone which was earlier limited only to smart phones so far.
- Mobile banking for the poor would be available through National Unified USSD platform (NUUP) for which all banks and mobile companies have come together.
- Account holders receive cheque book, literature on financial literacy and pass book in a kit.
- Account holder will have debit card which can be used for E-Commerce transactions.
- Access to other insurance, pension and financial products.
DFS, MoF, GoI vide letter F. No. 6/7/2018-FI (C-300383044) dated September 07, 2018 has informed that Government of India has decided to continue the National Mission for Financial Inclusion namely Pradhan Mantri Jan Dhan Yojana (PMJDY) beyond 14.08.2018 with the change in focus of opening of accounts from ‘every household’ to ‘every adult’ with the following modifications:
- Existing overdraft limit to PMJDY account holders of Rs. 5,000 has been raised to Rs. 10,000.
- Age limit of 18-60 years has been revised to 18-65 years.
- There will not be any conditions attached for overdraft up to Rs. 2,000.
- Accidental Insurance cover for new RuPay Card Holders has been raised from Rs. 1 lakh to Rs. 2 lakh for new PMJDY accounts opened after 28/08/2018.
The continuation of the Mission would enable all adults of the country to have at least a basic bank account with access to other financial services, social security schemes and overdraft upto Rs.10,000. It will, thus bring them into the mainstream of financial services and will facilitate transfer of benefits of various subsidy schemes of the Government more efficiently.
As a part of Financial Inclusion Plan, a digital pipeline in the frame of JAM trinity (Jan Dhan, Aadhaar and Mobile) has also been created which is facilitating disbursal of credit, providing social security, channelization of DBT under various government schemes to the beneficiaries.
For more information, Please visit the below provided links
Continuation of PMJDY beyond August, 2018
Progress report As on 31.12.2023
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