Milestones of the Prime Minister’s Jan Dhan Yojana

  • As the PM Jan Dhan Yojana (PMJDY) enters its ninth year, its extraordinary journey has resulted in over 50 crore bank accounts and deposits totaling over 2 lakh crore.
  • The scheme’s success is due to its commitment to financial inclusion, which includes providing opportunities for underprivileged groups to use banking services and government programmes.

PM Jan Dhan Yojana (PMJDY)

  • The PMJDY is an Indian government financial inclusion programme that was introduced in 2014.
  • It is the National Mission for Financial Inclusion’s goal to provide inexpensive access to financial services such as basic savings and deposit accounts, remittance, credit, insurance, and pensions.
  • Persons who do not have any other accounts can open a basic savings bank deposit (BSBD) account in any bank branch or Business Correspondent (Bank Mitra) outlet under the plan.

Advantages of PMJDY

  • For each unbanked person, one basic savings bank account is opened.
  • In PMJDY accounts, deposits receive interest.
  • In PMJDY accounts, there is no necessity to keep a minimum balance.
  • The account holder receives a Rupay Debit card.
  • Accident Insurance Coverage of Rs.1 lakh (increased to Rs.2 lakh for new PMJDY accounts opened after 28.8.2018) is available with the PMJDY account holders’ RuPay card.
  • To qualifying account holders, an overdraft (OD) option of up to Rs. 10,000 is provided.

Is PMJDY a success?

  • Account dormancy: The PMJDY scheme has resulted in an increase in the number of bank accounts in rural areas. The share of zero-balance accounts has dropped from 58% in March 2015 to 8% now, demonstrating a greater active participation with banking services.
  • Low or no transactions: The account holder’s insurance coverage is connected to their transaction history, and many accounts remain blocked owing to a lack of transactions, taking weeks or months to reactivate.
  • False overdraft promise: The promised overdraft facility of Rs 5000 for new account holders has not been granted, raising doubts about the scheme’s viability.
  • Payments stymied: In remote areas, a lack of sufficient connectivity, energy, internet, and ATM facilities has hampered the activation of RuPay cards and PIN numbers, which should have been considered before launching such a large-scale programme.

Prospects for the Future

  • Voluntary Participation: The government hopes that PMJDY account users may choose voluntary micro-insurance schemes such as PMJJBY and Pradhan Mantri Suraksha Bima Yojana.
  • Persuasion vs. Compulsion: Banks are focusing on financial literacy campaigns, special pushes, and awareness programmes to help account holders make educated decisions.
  • Collaboration with line ministries, including anganwadi and Asha workers, improves awareness campaigns and assures broader coverage.
  • Using Databases: Using databases for labor-related information, such as the E-Shram portal, aids in finding potential beneficiaries.
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