Only half PMJDY insurance claims settled in 2 years

According to an RTI response, just 329 claims out of 647 made in the last two fiscal years were settled under the Pradhan Mantri Jan Dhan Yojana (PMJDY).

What exactly is the 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.

Benefits under PMJDY

  • In PMJDY accounts, there is no necessity to keep a minimum balance.
  • In PMJDY accounts, deposits receive interest.
  • 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.

Why is this in the news?

  • In the fiscal year 2021-22, 341 claims for accident insurance coverage under the PMJDY plan were received.
  • 182 of these claims were settled, while 48 were denied.
  • There was no word on the status of the remaining 111 claims.

Is PMJDY a success story?

  • Account dormancy: The PMJDY initiative increased the number of bank accounts in rural areas, but this did not necessarily result in a rise in transactions due to many account holders’ minimal activity history.
  • 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.
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