About PMJDY
Pradhan Mantri Jan Dhan Yojana (PMJDY)
Context:
- The government is celebrating 9 years of completion of PMJDY in revolutionizing financial inclusion in India.
What is Financial Inclusion?
- Financial inclusion ensures access to financial services and credit for vulnerable groups at an affordable cost.
- It is vital for development and progress.
- A transaction account is the gateway to broader financial services, allowing storage, payments, and transfers.
About PMJDY:
- Launched: August 28, 2014.
- Objective: Promote financial inclusion by providing access to banking/savings accounts, remittance, credit, insurance, and pension.
- Significance: Backbone for various government economic initiatives and Direct Benefit Transfers (DBTs).
Eligibility Criteria:
- Indian Nationals aged 18 to 59 years.
- Minors above 10 years can apply with the support of a legal guardian.
Features of Jan Dhan Account:
- Zero-balance account: No minimum balance required.
- RuPay debit card: Provided with in-built accident insurance coverage.
- Insurance Benefits:
- Accident insurance: Up to ₹2 lakh.
- Life insurance: Up to ₹30,000 for eligible first-time account holders.
- Overdraft Facility:
- Up to ₹10,000 per household.
- Additional ₹5,000 loan after six months of satisfactory account activity.
- Coverage Focus:
- 66.6% of accounts in rural and semi-urban areas.
- 55.6% of account holders are women.
- Banking Access:
- 99.95% of inhabited villages have banking facilities within a 5 km radius.
Key Successes of PMJDY:
| Aspect | Achievements |
|---|---|
| Financial Inclusion | Over 52 crore accounts opened by July 2024. |
| Banking Outreach | Nearly 100% of villages have banking outlets within 5 km. |
| Account Usage | Zero balance accounts reduced from 8.52 crores (2015) to 4.26 crores (2024). |
| Women Empowerment | Over 55% accounts belong to women. |
| Rural & Semi-Urban Coverage | 67% of accounts opened in rural and semi-urban areas. |
| RuPay Cards | 340 million RuPay debit cards issued with ₹2 lakh accident insurance. |
| Financial Benefits | Secure savings, remittance, and reduced reliance on money lenders. |
| Role in Welfare | Used for DBT (Direct Benefit Transfers), including PM-Kisan, MGNREGA, COVID-19 assistance. |
| Digital Banking | Jan Dhan Darshak App facilitates easy access to banking touchpoints. |
| JAM Architecture | Integrates Jan Dhan-Aadhaar-Mobile (JAM) for seamless benefit transfers. |
| Formalization of Financial System | Encourages poor households to bring savings into the formal banking system. |
Challenges:
- Dormant accounts: Many accounts are inactive or have low transactions.
- Financial literacy: Many account holders lack awareness about banking services.
- Limited credit access: Need for enhanced micro-credit and investment options.
- Technological barriers: Issues related to internet connectivity in remote areas.
Way Forward:
- Micro-insurance coverage: Expanding schemes like PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana) & PMSBY (Pradhan Mantri Suraksha Bima Yojana).
- Micro-credit and investment options: Enhancing access to flexi-recurring deposits.
- Financial literacy campaigns: Educating people on using banking facilities efficiently.
- Infrastructure expansion: Strengthening digital banking for better financial inclusion.
Conclusion:
PMJDY has played a transformative role in India’s financial inclusion journey by empowering the poor, women, and rural communities. With further policy enhancements, it can act as a catalyst for inclusive economic growth and poverty alleviation.