Pradhan Mantri Jan-Dhan Yojana (PMJDY)

Why in news?

• Pradhan Mantri Jan-Dhan Yojana (PMJDY) - National Mission for Financial Inclusion, completes seven years of successful implementation.

About Pradhan Mantri Jan-Dhan Yojana (PMJDY):

• PMJDY is National Mission for Financial Inclusion launched on 15th August 2014, to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.

Objectives of the scheme:

• 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 lakh
• Funding the unfunded - Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit

Initial Features

• The scheme was launched based upon the following 6 pillars: 
  • Universal access to banking services  – Branch and BC
  • Basic savings bank accounts with overdraft facility of Rs. 10,000/- to every eligible adult
  • 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 

Important approach adopted in PMJDY based on past experience:

• Accounts opened are online accounts in core banking system of banks, in place of earlier method of offline accounts opening with technology lock-in with the vendor
• Inter-operability through RuPay debit card or Aadhaar enabled Payment System (AePS)
• Fixed-point Business Correspondents
• Simplified KYC / e-KYC in place of cumbersome KYC formalities

 Extension of PMJDY with New features

• The Government decided to extend the comprehensive PMJDY program beyond 28.8.2018 with some modifications
  • 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 lakh 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

Add on:

• Jan Dhan Darshak App:
  • It is a mobile application, launched to provide a citizen centric platform for locating banking touch points such as bank branches, ATMs, Bank Mitras, Post Offices, etc. in the country.

PRELIMS QUESTION

Which of the following statements are correct regarding Pradhan Mantri Jan-Dhan Yojana (PMJDY)?

1. PMJDY ensure access of financial products and services at free of cost

2. Under the scheme beneficiaries are entitled to get RuPay Debit card having inbuilt accident insurance covers of Rs.2 lakh.

Select the correct answer using the code given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer