Pradhan Mantri Jan Dhan Yojana (PMJDY) - Financial Inclusion scheme

Introduction 

 The Pradhan Mantri Jan Dhan Yojana (PMJDY) is a financial inclusion initiative launched by the Government of India on August 28, 2014. Its primary objective is to provide universal access to banking facilities, ensuring that every household in India has at least one bank account. Here is a detailed overview of the scheme.

What is the Pradhan Mantri Jan Dhan Yojana (PMJDY)?

In 2014, the Indian government introduced the Pradhan Mantri Jan Dhan Yojana (PMJDY) to extend financial services to every citizen, regardless of their socio-economic background. While the scheme has made great strides in boosting financial literacy and alleviating poverty, it continues to face some challenges.

The Pradhan Mantri Jan Dhan Yojana is a national mission focused on financial inclusion, aiming to provide banking services to all households across India.

This initiative ensures that a variety of financial services are accessible, including basic savings bank accounts, need-based credit, remittance facilities, insurance, and pension schemes.

Key Features Of pradhan mantri jan dhan yojana - 

1. Zero Balance Accounts: Accounts can be opened with zero balance.

2. RuPay Debit Card: Account holders receive a RuPay debit card with an in-built accident insurance cover of ₹1 lakh.

3. Overdraft Facility: An overdraft facility of up to ₹10,000 is available to account holders after six months of satisfactory operation.

4. Mobile Banking: Access to mobile banking facilities for easy money transfers and balance checks using basic feature phones.

5. Life Insurance Cover: A life insurance cover of ₹30,000 for eligible account holders who open accounts within the initial period.

6. Interest on Deposits: Interest is earned on deposits in the accounts.

7. Direct Benefit Transfer: Ensures the direct transfer of subsidies and benefits to the beneficiaries' accounts.

Implementation of Pradhan Mantri Jan Dhan Yojana - 

The Pradhan Mantri Jan Dhan Yojana (PMJDY) was implemented in three phases:

Phase I: August 15, 2014 – August 14, 2015

During this phase, PMJDY aimed to ensure universal access to banking facilities for all households in India. The initiative mandated at least one basic banking account per household, equipped with a RuPay Debit Card that included an inbuilt accident insurance cover of Rs 1 lakh. It also included a comprehensive financial literacy program targeted at rural areas. The introduction of the Kisan Credit Card was also proposed during this period.

Phase II: August 15, 2015 – August 14, 2018

The focus of Phase II was to extend microinsurance and pension schemes like Swavalamban to the unorganized sector, facilitated through Business Correspondents.

Phase III: Post August 14, 2018

Phase III of PMJDY emphasized opening bank accounts for every household, with an enhanced Overdraft (OD) limit initially set at Rs 5,000, later raised to Rs 10,000. No conditions were attached for OD up to Rs 2,000. The age limit for availing the OD facility was extended from 18-60 years to 18-65 years. Additionally, new RuPay card holders who opened accounts after August 28, 2018, received an increased accidental insurance cover of Rs 2 lakh.

Achievements under Pradhan Mantri Jan Dhan Yojana  (PMJDY) –

• Total Number of PMJDY Accounts (as of 19th August 2020) is 40.35 Crore; Rural PMJDY accounts 63.6%, Women PMJDY accounts 55.2%. Out of the total of 40.35 crore PMJDY accounts, 34.81 crores (86.3%) are operative.

• Total deposit balances under PMJDY Accounts stand at Rs. 1.31 lakh crore.

• During the first year of the scheme 17.90 crore PMJDY accounts were opened.

• Deposits have increased about 5.7 times with an increase in accounts 2.3 times between 2015 to 2020.

• A mobile application named Jan Dhan Darshak App was launched to provide a citizen-centric platform for locating banking touchpoints such as bank branches, ATMs, Bank Mitras, Post Offices, etc.

Eligibility Criteria for PMJY - 

Open to All Indian Citizens: The scheme is open to all Indian citizens, regardless of their socio-economic status, with a particular focus on the unbanked population.

Inclusivity: Targeted at individuals who do not have access to formal banking services, including rural and urban poor, migrant workers, and others who are traditionally excluded from the financial system.

Documents Required for PMJY - 

• Simplified Know Your Customer (KYC) Norms: To make the account opening process easier, the scheme follows simplified KYC norms. The required documents include:

• Aadhaar Card: Unique Identification Number provided by the Government of India.

• Voter ID Card: Issued by the Election Commission of India.

• PAN Card: Permanent Account Number issued by the Income Tax Department.

• Driving License: Issued by the Regional Transport Office.

• Passport: Issued by the Ministry of External Affairs.

• NREGA Job Card: Issued by the National Rural Employment Guarantee Act authorities.

• Letter issued by the National Population Register containing details of name and address.

• For those who do not have any of these documents, a small account can be opened, which requires only a self-attested photograph and signature/thumbprint in the presence of a bank official.

How to open an account under the PMJDY -

Here’s a step-by-step guide on how to open an account under PMJDY:

Steps to Open an Account under PMJDY

1. Visit a Participating Bank/Branch:

Locate a bank branch that participates in the PMJDY. Most public sector banks, private banks, regional rural banks (RRBs), and cooperative banks are part of the scheme.

2. Provide Necessary Documents:

Identity Proof: Provide any one of the following documents:

Aadhaar Card

Voter ID Card

Driving License

PAN Card

Passport

NREGA Job Card

Letter issued by the National Population Register containing details of name and address.

Address Proof: Provide any one of the following documents:

Aadhaar Card

Voter ID Card

Driving License

Passport

Utility bills (electricity, water, telephone - not more than 3 months old)

Property or municipal tax receipt

Letter issued by a recognized public authority verifying the address

3. Fill Out the Account Opening Form:

Obtain and fill out the PMJDY account opening form provided by the bank. Ensure all details are correctly filled in.

4. Submit Photograph:

Provide a passport-sized photograph of yourself and any joint account holders if applicable.

5. Signature/Thumb Impression:

Sign the account opening form or provide a thumb impression in the presence of a bank official.

6. KYC Verification:

The bank will verify your KYC (Know Your Customer) documents and details provided. This may involve checking the original documents against photocopies you submit.

7. Zero Balance Requirement:

PMJDY accounts can be opened with zero balance, meaning you do not need to deposit any money initially.

8. Receive Account Kit:

Once your application is processed and approved, you will receive an account kit containing your account number, RuPay debit card, and other relevant information.

9. Activate Your RuPay Debit Card:

Activate your RuPay debit card as per the instructions provided by the bank. Ensure you set your PIN for ATM withdrawals and transactions.

10. Start Using Your Account:

Your PMJDY account is now active and ready for use. You can deposit money, withdraw cash, and avail of various banking services offered under PMJDY.

Conclusion 

 The Pradhan Mantri Jan Dhan Yojana (PMJDY) has been a transformative initiative in India's financial landscape. Launched on August 28, 2014, to achieve universal access to banking facilities, PMJDY has significantly advanced financial inclusion by providing every household in India with at least one bank account. The scheme offers a range of financial services including savings accounts, credit, insurance, and pensions, ensuring that even the most marginalized populations are integrated into the formal banking system.

FAQ - 

1.What are the six pillars of Pradhan Mantri Jan Dhan Yojana?

The six pillars—providing bank accounts, credit, insurance, pension, financial literacy, and increasing the penetration of banking agents—were designed to address the prior challenges and to accelerate financial inclusion in India.

2.What is the ATM limit for Jan Dhan?

ATM Transaction: Rs. 10,000/-per day. PoS/Online Payments or Purchase : Rs.

3.What are the 4 pillars of financial inclusion

Unless people know about the power of money – its growth pattern, method, or savings schemes, why would anyone be willing to attach himself/herself to a system? That's why I regard Financial literacy as the fourth pillar of financial inclusion, with the other three being – technology, women inclusion, and regulation.