Central Idea

As the PM Jan Dhan Yojana (PMJDY) completes 9 years, its remarkable journey is marked by over 50 crore bank accounts and deposits exceeding ₹2 lakh crore.
The scheme’s success lies in its commitment to financial inclusion, creating avenues for underprivileged segments to access banking services and government schemes.

What is PM Jan Dhan Yojana (PMJDY)?

The PMJDY is a financial inclusion program launched by the Indian government in 2014.
It is National Mission for Financial Inclusion to ensure access to financial services, namely, a basic savings & deposit accounts, remittance, credit, insurance, pension in an affordable manner.
Under the scheme, a basic savings bank deposit (BSBD) account can be opened in any bank branch or Business Correspondent (Bank Mitra) outlet, by persons not having any other account.

One basic savings bank account is opened for unbanked person.
There is no requirement to maintain any minimum balance in PMJDY accounts.
Interest is earned on the deposit in PMJDY accounts.
Rupay Debit card is provided to the account holder.
Accident Insurance Cover of Rs.1 lakh (enhanced to Rs. 2 lakh to new PMJDY accounts opened after 28.8.2018) is available with RuPay card issued to the PMJDY account holders.
An overdraft (OD) facility up to Rs. 10,000 to eligible account holders is available.

Dormancy of accounts: The PMJDY scheme has led to an increase in the number of bank accounts in rural areas. The percentage of zero-balance accounts has significantly decreased from 58% in March 2015 to a mere 8%, indicating a more active engagement with banking services.
Low or no transactions: Insurance coverage for the account holder is linked to their transaction history, and many accounts remain frozen due to lack of transactions, taking several weeks or months to reactivate.
False promise of overdraft: The promised overdraft facility of Rs 5000 for new account holders has not been provided as promised, leading to scepticism about the scheme’s success.
Payments bottleneck: The lack of proper connectivity, electricity, internet, and ATM facilities in rural areas has hindered the activation of RuPay cards and PIN numbers, which should have been considered before implementing such a large-scale program.

Voluntary Participation: The government aims to persuade PMJDY account holders to opt for voluntary micro-insurance schemes like PMJJBY and Pradhan Mantri Suraksha Bima Yojana.
Persuasion over Compulsion: The focus is on financial literacy campaigns, special drives, and awareness programs conducted by banks to help account holders make informed choices.
Multi-Level Coordination: Collaboration with line ministries, including Anganwadi and Asha workers, enhances awareness campaigns and ensures wider coverage.
Leveraging Databases: Utilization of databases like the E-Shram portal for labour-related information aids in identifying potential beneficiaries.