From UPSC perspective, the following things are important :
Prelims level: Pradhan Mantri Jan Dhan Yojana (PMJDY)
Why in the News?
PM Modi launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) on 28th August 2014. It has now completed a decade of successful implementation.
About PMJDY
| Details | |
| Objective | • Banking the Unbanked: Open basic savings bank deposit (BSBD) accounts with minimal paperwork, relaxed KYC, e-KYC, account opening in camp mode, zero balance & zero charges. • Securing the Unsecured: Issue Indigenous Debit cards with free accident insurance coverage of ₹2 lakh. • Funding the Unfunded: Provide micro-insurance, overdraft, micro-pension, and micro-credit facilities. |
| Initial Features | • Universal Access to Banking Services: Access through branches and BCs. • Basic Savings Bank Accounts: With an overdraft facility of up to ₹10,000 for every eligible adult. • Financial Literacy Program: Promote savings and credit usage. • Insurance: Accident cover up to ₹1 lakh and life cover of ₹30,000 for accounts opened between Aug 2014 to Jan 2015. • Pension Scheme: For the unorganized sector. • Creation of Credit Guarantee Fund. |
| Key Provisions | • Inter-operability: Through RuPay debit card or Aadhaar-enabled Payment System (AePS). • Fixed-point Business Correspondents. • Simplified KYC / e-KYC. |
| Extension and New Features (Post-2018) | • Focus Shift: From ‘Every Household’ to ‘Every Unbanked Adult’. • RuPay Card Insurance: Increased accidental insurance cover to ₹2 lakh for new accounts. • Overdraft Facilities Enhanced: Limit doubled from ₹5,000 to ₹10,000; up to ₹2,000 without conditions. • Increase in upper age limit for OD: From 60 to 65 years. |
| Eligibility for Other Programs | PMJDY accounts are eligible for Direct Benefit Transfer (DBT), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), and Atal Pension Yojana (APY). |
Successes of PMJDY
- Financial Inclusion: PMJDY is recognized as the largest financial inclusion initiative globally, with over 53 crore bank accounts opened as of August 2024.
- It has facilitated access to credit for individuals without a formal financial history, as evidenced by the rise in Mudra loan sanctions at a compounded annual rate of 9.8% from FY 2019 to FY 2024.
- Social Empowerment: 55.6% of Jan Dhan account holders are women, and 66.6% of accounts are in rural and semi-urban areas, demonstrating the program’s reach among marginalized communities.
- Deposit Growth: The total deposits in PMJDY accounts have reached Rs. 2.31 lakh crore, showing a 15-fold increase since August 2015.
- Digital Transaction Growth: Digital transactions under PMJDY have surged, with UPI financial transactions growing from 535 crore in FY 2018-19 to 13,113 crore in FY 2023-24.
- Effective DBT Mechanism: The Jan-Dhan Aadhaar Mobile (JAM) trinity has enabled a diversion-proof subsidy delivery mechanism, with subsidies and social benefits directly transferred into the bank accounts of the underprivileged.
- Savings and Financial Discipline: The average deposit in the PMJDY account has increased 4 times since August 2015, indicating improved saving habits among account holders.
PYQ:[2015] ‘Pradhan Mantri Jan-Dhan Yojana’ has been launched for (a) Providing housing loan to poor people at cheaper interest rates. (b) Promoting women’s Self-Help Groups in backward areas. (c) Promoting financial inclusion in the country. (d) Providing financial help to the marginalized communities. [2016] Pradhan Mantri Jan Dhan Yojana (PMJDY) is necessary for bringing unbanked to the institutional finance fold. Do you agree with this for financial inclusion of the poorer section of the Indian society? Give arguments to justify your opinion. |
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