The Pradhan Mantri Jan Dhan Yojana (PMJDY) – the National Mission for Financial Inclusion – completes nine years of successful implementation. Launched on 28th August 2014 by Prime Minister Shri Narendra Modi, the PMJDY stands as one of the most extensive financial inclusion initiatives globally, aimed at liberating the economically marginalized from a cycle of poverty.
Addressing Financial Inclusion: A Global Endeavor
The Ministry of Finance, through the PMJDY, has been committed to fostering financial inclusiveness and providing support to economically disadvantaged sections. Financial Inclusion (FI) is a means of ensuring equitable growth and delivering financial services at reasonable costs to vulnerable groups, particularly those lacking access to basic banking services.
One of the essential outcomes of financial inclusion is the integration of the poor’s savings into the formal financial system, detaching them from exploitative moneylenders. Additionally, it facilitates the transfer of funds to families in rural areas, thus furthering the economic empowerment of these individuals.
Nine Years of Achievements
On the occasion of the ninth anniversary of the PMJDY, Union Finance Minister Smt. Nirmala Sitharaman highlighted the program’s achievements.
- Over 50 crore individuals have been brought into the formal banking system through Jan Dhan Accounts, with around 55.5% of these accounts belonging to women.
- Rural and semi-urban areas account for 67% of these accounts. The cumulative deposits in these accounts have crossed ₹2 lakh crore. Furthermore, approximately 34 crore RuPay cards have been issued, each equipped with a ₹2 lakh accident insurance cover.
- Union Minister of State for Finance Dr. Bhagwat Kisanrao Karad emphasized that the PMJDY has diminished financial untouchability, extending formal banking services to marginalized sections. This inclusivity has led to increased access to credit, insurance, pensions, and greater financial awareness.
- The integration of Jan Dhan accounts with Aadhaar and mobile (JAM) technology has facilitated the seamless transfer of government benefits, contributing to the comprehensive growth of all segments of society.
As of August 16, 2023, the number of PMJDY Accounts:
As of August 16, 2023, the deposits within PMJDY accounts stand as follows:
Unveiling the Scheme
The PMJDY was introduced as a National Mission for Financial Inclusion, aimed at offering accessible financial services like banking, savings accounts, remittance, credit, insurance, and pensions.
The objectives of the PMJDY are as follows:
- Ensuring affordable access to financial products and services.
- Leveraging technology to expand reach and reduce costs.
Basic Tenets of the Scheme
The PMJDY encompasses three fundamental principles:
- Banking the Unbanked: Facilitating the opening of basic savings bank deposit (BSBD) accounts with minimal documentation, e-KYC, account opening camps, zero balance requirements, and no charges.
- Securing the Unsecured: Providing indigenous debit cards for cash withdrawals and merchant payments, coupled with free accident insurance coverage of Rs. 2 lakhs.
- Funding the Unfunded: Offering other financial products such as micro-insurance, overdrafts for consumption, micro-pensions, and micro-credit.
Initial Features and Pillars
The launch of PMJDY rested upon six pillars:
- Universal Access to Banking Services: Through bank branches and Business Correspondents (BC).
- Basic Savings Bank Accounts: Including an overdraft facility of Rs. 10,000 for eligible adults.
- Financial Literacy Programme: Promoting savings, ATM usage, credit readiness, insurance, pensions, and basic mobile banking.
- Credit Guarantee Fund: To offer banks protection against defaults.
- Insurance: Providing accident cover up to Rs. 1 lakh and life cover of Rs. 30,000 for accounts opened between 15th August 2014 and 31st January 2015.
- Pension Scheme for the Unorganized Sector.
Adaptive Approaches for Success
The Pradhan Mantri Jan Dhan Yojana (PMJDY) was meticulously crafted with adaptive strategies rooted in experience:
- Online Accounts: Accounts were opened online in the core banking system, replacing the previous offline method with technology flexibility.
- Interoperability: Enabled through RuPay debit cards or Aadhaar-enabled Payment System (AePS).
- Fixed-point Business Correspondents: For efficient financial services.
- Simplified KYC: Replacing cumbersome KYC procedures with simplified or e-KYC methods.
Extending and Enhancing PMJDY
The PMJDY was extended beyond August 28, 2018, with modifications:
- Shift in Focus: From “Every Household” to “Every Unbanked Adult.”
- Increased Insurance: Accidental insurance cover on RuPay cards raised from Rs. 1 lakh to Rs. 2 lakhs for accounts opened post August 28, 2018.
- Enhanced Overdraft Facilities: OD limit doubled to Rs. 10,000; OD up to Rs. 2,000 without conditions; upper age limit for OD increased to 65 years.
Impact and Transformative Reach
PMJDY has been the foundation for numerous people-centric economic initiatives. From direct benefit transfers to COVID-19 financial aid, the program has laid the groundwork for various assistance measures. During the pandemic, DBTs via PMJDY accounts ensured that financial assistance reached the intended recipients, mitigating systemic leakage.
In summary, the Pradhan Mantri Jan Dhan Yojana has not only integrated the unbanked into the financial system but also expanded India’s financial landscape, significantly contributing to financial inclusion. As we celebrate nine years of its implementation, we recognize the monumental achievements of this transformative initiative.