PM Jan Dhan Yojana

 

Relevance

• GS 3: Inclusive growth and issues arising from it.

 

Context

• PM Jan Dhan Yojana (PMJDY) has completed seven years of its implementation.

 

Achievements

• PMJDY Accounts have grown three-fold from 14.72 Crore in Mar’15 to 43.04 Crore as on 18-08-2021.
  • One in 2 accounts opened between Mar’14 to Mar’20 was a PMJDY account.
• 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.
• The Jan Dhan Darshak app is a medium to identify villages that are not served by banking touchpoints within 5 km.
  • The efforts have resulted in a significant decrease in the number of such villages.

 

About PMJDY

• Pradhan Mantri Jan Dhan Yojana (PMJDY) is National Mission for Financial Inclusion (Read about Financial Inclusion Index from here) to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.

 

 

Objectives

• To ensure access of financial products & services at an affordable cost.
• To lower cost & widen reach in the country through use of technology.

 

Pradhan Mantri Jan Dhan Yojana benefits

• 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 lakhs.
• Funding the unfunded – Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit.

 

Pillars

• Initially, the scheme was launched based upon the following 6 pillars:
• Universal access to banking services through Branch and Banking Correspondents (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 30,000 on account opened between 15 Aug 2014 to 31 January 2015.
• Pension scheme for Unorganized sector.

 

 

Extension of PM Jan Dhan Yojana with new features

• The Government decided to extend the comprehensive PMJDY program beyond 28.8.2018 with some modifications
• Focus shifted 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 lakhs for PMJDY accounts opened after 28.8.2018.
• Enhancement in overdraft (OD) 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.