Pradhan Mantri Jan-Dhan Yojana (PMJDY)

  • August 28, 2021
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Pradhan Mantri Jan-Dhan Yojana (PMJDY)

Subject – Government Schemes

Context – The average amount deposited in the PM Jan Dhan (PMJDY) account has surged to Rs 3398 from Rs 1279 between 2015 and 2021. The total deposits under these accounts registered a rise of 6.38 times.

Concept –

  • Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusionto ensure access to financial services, namely, Banking/Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.
  • Objectives:
    • Ensure access of financial products & services at an affordable cost.
    • Use of technology to lower cost & widen reach.
  • Basic tenets of the scheme
    • Banking the unbanked– Opening of basic savings bank deposit (BSBD) account with minimal paperwork, relaxed KYC, e-KYC, account opening in camp mode, 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.
  • Features
    • Universal access to banking services –Branch and Banking Correspondents
    • Basic savings bank accounts with overdraft facility of Rs. 10,000/- to every household.
    • Financial Literacy Program–Promoting savings, use of ATMs, getting ready for credit, availing insurance and pensions, using basic mobile phones for banking.
    • Creation of Credit Guarantee Fund –To provide banks some guarantee against defaults.
    • Insurance –Accident cover up to Rs. 1,00,000 and life cover of Rs. 30,000 on account opened between 15 Aug 2014 to 31 January 2015.
    • Pension Scheme for Unorganized sector.
  • There is no need to maintain minimum balance in these accounts.
  • Extension of PMJDY with New features:
    • Focus shift from Every Household to Every Unbanked Adult.
    • RuPay Card Insurance – Free accidental insurance cover on RuPay cards increased from Rs. 1 lakh to Rs. 2 lakhs for PMJDY accounts opened after 28.8.2018.
    • Enhancement in overdraft facilities – OD limit doubled from Rs 5,000 to Rs 10,000; OD upto Rs 2,000 (without conditions). Increase in upper age limit for OD from 60 to 65 years.
Government Schemes Pradhan Mantri Jan-Dhan Yojana (PMJDY)