The Pradhan Mantri Jan Dhan Yojana (PMJDY) is a national mission launched by the Government of India in 2014. It aims to provide financial services to the poor and unbanked people in India. The scheme has been a huge success, with over 400 million accounts opened so far.

In the present article, we shall see the features and significance of Pradhan Mantri Jan-Dhan Yojana (PMJDY), which will be helpful in your UPSC Exam Preparation.

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

The Pradhan Mantri Jan-Dhan Yojana (PMJDY) is a national mission for financial inclusion launched by the Government of India in 2014. The scheme aims to provide universal access to banking facilities.

History of PMJDY

The Pradhan Mantri Jan-Dhan Yojana was launched on 28 August 2014. The scheme was launched with the aim of providing universal access to banking facilities. It aimed to have at least one basic savings bank account for every household.

The PMJDY was launched against the backdrop of low financial inclusion in India. In 2014, only 53% of Indian adults had a bank account. The PMJDY aimed to address this gap and provide banking facilities to all Indians, regardless of their income or social status. The PMJDY was launched with many features that made it attractive to account holders. 

The PMJDY was a huge success in its initial years. Within a year of its launch, over 200 million new bank accounts were opened under the scheme. The PMJDY has also helped to increase financial literacy in India. A study by the World Bank found that the PMJDY has led to a significant increase in the number of Indians who are aware of basic financial concepts.

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Tenets of PM Jan Dhan Yojana

• Banking the unbanked – Any Individual can Open a basic savings account with minimal PaperWork, relaxation in KYC requirements, e-KYC, zero balance & zero charges.
• Securing the unsecured – Issuance of Indigenous Debit cards for cash withdrawals & payments at merchant locations, with free accident insurance coverage of Rs. 2 lakhs
• Funding the unfunded – Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit.

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Important Pillars of PMJDY 

• Universal access to banking facilities for all households.
• Basic savings bank accounts with an overdraft facility of Rs. 10,000/- for every household.
• Financial Literacy Program at Village level.
• Creation of Credit Guarantee Fund for coverage in defaults in Overdraft Accounts.
• Insurance – Accident cover up to Rs. 1,00,000 and life cover of Rs. 30,000 on the account opened between 15 Aug 2014 to 31 January 2015.
• Pension schemes like Swvlamban through Business Correspondents for the Unorganized sector.

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Features of PMJDY

• The Pradhan Mantri Jan Dhan Yojana (PMJDY) is considered the world’s largest financial inclusion.
• The Hon’ble Prime Minister Shri Narendra Modi announced it from the ramparts of the Red Fort on the 15th of August 2014, and on the 28th of August 2014, he launched it across the country.
• PMJDY also offers an overdraft service. The government is allowing PMJDY account holders to borrow more money than is available in their accounts.
• The National Mission for Financial Inclusion, or PMJDY, intends to provide low-cost access to financial services such as deposit accounts, remittances, credit, banking/savings, insurance, and pensions.
• The Centre’s plan allows Jan Dhan account holders to take out a short-term loan of up to ten thousand rupees.
• Under PMJDY, no guarantee is required for overdrafts of up to 2,000 Rupees.
• PMJDY is a game changer for the economy since it has established the foundation for Direct Benefits Transfer (DBT), which will help to plug subsidy leakages and save the government money.
• PMJDY has a record in the Guinness Book of World Records.
• The achievements of PMJDY were recognised by the Guinness Book of World Records.
• As part of the Financial Inclusion Campaign, it issued a certificate saying that most bank accounts were established in one week.

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Implementation of PMJDY

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

Phase I (15 August 2014 – 14 August 2015)

The goal of this phase was to provide universal access to banking facilities for all households in India. This was done by opening bank accounts with RuPay debit cards and providing accident insurance coverage of Rs. 1 lakh. Financial literacy programs were also conducted in villages during this phase.

Phase II (15 August 2015 – 14 August 2018)

This phase focused on providing microinsurance and pension schemes to the unorganized sector through Business Correspondents.

Phase III (after 14 August 2018)

This phase expanded the coverage of PMJDY by raising the overdraft limit from Rs. 5,000 to Rs. 10,000 and removing the conditions for an overdraft of up to Rs. 2,000. The age limit for availing of the overdraft facility was also revised from 18-60 years to 18-65 years. The accidental insurance coverage for new RuPay card holders was increased from Rs. 1 lakh to Rs. 2 lakh if the accounts were opened after 28 August 2018.

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Eligibility for Pradhan Mantri Jan Dhan Yojana

Here are the eligibility criteria for Pradhan Mantri Jan Dhan Yojana (PMJDY)

• You must be at least 10 years old to open a PMJDY account.
• You must be a resident of India.
• You must have an Aadhaar card. If you do not have an Aadhaar card, you can still open a PMJDY account. You will need to provide other documents, such as your ration card or voter ID card.
• You cannot have a bank account already. If you do have a bank account, you will need to close it before you can open a PMJDY account.

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Achievements Under Pradhan Mantri Jan Dhan Yojana

The Pradhan Mantri Jan Dhan Yojana (PMJDY) has achieved significant success since its launch in 2014. Here are some of the key achievements of the scheme:

Increase in Financial Inclusion

The PMJDY has led to a significant increase in financial inclusion in India. The number of bank accounts in India has increased from 53% in 2014 to 80% in 2023. The PMJDY has also helped to reduce the gender gap in financial inclusion. The percentage of women with bank accounts has increased from 35% in 2014 to 77% in 2023.

Increased Access to Credit

The PMJDY has also increased access to credit for the poor and marginalized. The number of loans disbursed under the PMJDY has increased from 1.1 crore in 2015 to 31.2 crore in 2023. The PMJDY has also helped to reduce the interest rates on loans for the poor.

Reduced Poverty

The PMJDY has also helped to reduce poverty in India. A study by the World Bank found that the PMJDY has lifted 1.5 crore people out of poverty. The PMJDY has also helped to reduce the inequality gap in India.

Other Achievements

The PMJDY has also achieved many other successes, including:

• Increased access to insurance
• Increased access to pension schemes
• Increased financial literacy
• Increased digital payments

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Benefits of PMJDY

• Access to a basic savings account.
• There is no requirement to keep a minimum balance with PMJDY accounts.
• Deposits in PMJDY accounts receive interest.
• The PMJDY account holder is given a Rupay Debit card.
• Direct Benefits Transfer will be made to these accounts for beneficiaries of government programmes.
• After 6 months of satisfactory account management, an overdraft capacity will be available, as well as access to pension and insurance products.
• A Rs.30,000/- life insurance policy.
• Money may be transferred easily across India.
• RuPay Debit Card must be used at least once every 45 days to qualify for Accidental Insurance Coverage.
• Only one account per home, ideally the lady of the house, is eligible for an overdraft of up to Rs.5000/-.

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Pradhan Mantri Jan Dhan Yojana Highlights for UPSC

Way Forward

The Pradhan Mantri Jan Dhan Yojana (PMJDY) has achieved significant success since its launch in 2014. However, there is still room for improvement. Here are some suggestions for the way forward:

• The government should continue to focus on financial literacy programs. This is to educate account holders about their rights and responsibilities. This will help them to make better use of their bank accounts and avoid falling into debt traps.
• The government should promote digital payments to reduce the use of cash. This will make financial transactions more convenient and efficient for account holders.
• The government should increase access to credit for account holders, especially for MSMEs. This will help them to grow their businesses and create jobs.
• The government should work with banks to reduce the cost of banking services for account holders. This will make banking more affordable for everyone.

Pradhan Mantri Jan-Dhan Yojana (PMJDY): Download PDF Here!

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