All about PM Jan Dhan Yojana

The Pradhan Mantri Jan Dhan Yojana (PMJDY), one of the world’s largest investment programs, was announced by India’s current Prime Minister, Narendra Modi, on August 15 2014. Officially launched on August 28, the plan ensures access to various financial services such as a savings bank account, and access to credit, insurance and pensions.

The scheme secured its name in the Guinness World Records for the “most bank accounts opened in one week as part of financial inclusion.” The official number of accounts registered for the record was 18,096,130. 

According to data from the official website, surpassing its original target of 7.5 crore bank accounts, 12.54 crore accounts were opened in various banks till 31 January 2015 after a survey covering 21.06 million households. Today, almost 100 per cent coverage has been achieved. Of these accounts, 60 per cent are in rural areas, and 40 per cent are in urban areas. The share of female account holders is approximately 51 per cent.

Features of PMJDY scheme

The Pradhan Mantri Jan Dhan Yojana provides a platform for universal access to banking institutions in rural and urban areas through a basic home bank account, financial information, and credit, insurance and pension services. 

Important features of the scheme include: 

• Those who open an account through the scheme will receive an Indigenous Debit Card (RuPay card) and Rs 1 lakh cover as accident insurance. The Kisan credit cards (KCC) are linked to the RuPay forum.  
• A zero balance account can be opened at any bank branch or in the Media Reporter (Bank Mitra) area. 
• All bank accounts are registered in the Core Banking System (CBS) of banks. 
• The scheme supports mobile banking. Users can call centres across India using the toll-free number.
• After six months of opening the account, the scheme holder receives access to Rs 5,000 as an overdraft. 
• The scheme is available in 5,000 locations across the country. 
• The scheme also provides a financial literacy program to bring financial knowledge to rural areas. 
• The scheme also aims to extend the Direct Benefit Transfer (DBT) scheme under various government schemes through the account holders. 
• Small-scale social insurance and pension schemes such as Swavalamban were included in the second phase of the program.

Advantages and disadvantages of PMJDY scheme

The pros of the PMJDY scheme are: 

• Unpaid banking: About 65 per cent of India’s senior citizens still live without a bank account. The large scale of the program has the potential to accommodate a large portion of senior citizens. These bank accounts can bring various banks and account holders onto a common financial system with access to financial services such as savings, debt, cash withdrawals and insurance.
• Targeted Families: A previous version of such an investment program in 2011 focused on districts. This program goes one step further by providing accounts to families.
• Technology-backed banks: The National Payment Corporation of India (NPCI) has a major role in this financial and technological investment. All banks and telecommunications operators have been advised to work closely to provide mobile banking services to the beneficiaries.
• Making banking watertight: The significant benefits of the scheme include plugging the leaks in the subsidy system and cutting avenues that can hold black money.

The cons of this scheme are:

• Primary responsibility on PSBs: Banks (especially those in the public sector) are responsible for implementing the program. In the current macroeconomic ecosystem, all PSBs have a lot of stressed assets (bad loans and restructured loans) and often operate improperly for several reasons.
• Limitations on connectivity: In many districts, under the NREGA scheme, people share half their earnings with their panchayat officials to do half a day’s work. The program does not address this issue.
• Lack of financial tools: Effective financial study tools have not been created yet to study the scheme and provide cost-effective ethics lessons and a customer-focused approach. 

Conclusion 

The Pradhan Mantri Jan Dhan Yojana is an effective government tool that aims to bring families out of poverty. Its implementation and uses have been recognised worldwide. Important features of the scheme include insurance coverage and pension services which are the need of the hour for many Indian families.