New Delhi: The Pradhan Mantri Jan-Dhan Yojana (PMJDY), which is a national mission for financial inclusion to ensure access to financial services, namely, banking/ savings and deposit accounts, remittance, credit, insurance, pension in an affordable manner, completed seven years of successful implementation of the scheme, with 43.04 Crore Jan-Dhan account holders as on August 18, 2021.
According to a statement issued by the Ministry of Finance, out of these account holders, 55.47 per cent (23.87 crores) are women and 66.69 per cent (28.70 crores) Jan Dhan accounts are in rural and semi-urban areas.
During the first year of the scheme 17.90 crores, PMJDY accounts were opened and there has been a continuous increase in the number of accounts under the PMJDY scheme.
PMJDY accounts have grown three-fold from 14.72 crore in Mar 2015 to 43.04 Crore as on August 18, 2021, undoubtedly a remarkable journey for the financial inclusion programme, stated the ministry.
PMJDY was announced by Prime Minister Narendra Modi in his Independence Day address on August 15, 2014. While launching the programme on August 28, the Prime Minister had described the occasion as a festival to celebrate the liberation of the poor from a vicious cycle.
On the seventh Anniversary of PMJDY, Finance Minister Nirmala Sitharaman reiterated the importance of the scheme and said, "The journey of PMJDY led interventions undertaken over a short span of seven years has in effect, produced both transformational as well as directional change thereby making the emerging FI ecosystem capable of delivering financial services to the last person of the society-the poorest of the poor. The underlying pillars of PMJDY, namely, Banking the Unbanked, Securing the Unsecured and Funding the Unfunded has made it possible to adopt multi-stakeholders collaborative approach while leveraging technology for serving the unserved and underserved areas as well."
Minister of State for Finance, Bhagwat Karad on the occasion said, "Pradhan Mantri Jan Dhan Yojana (PMJDY) has been one of the most far-reaching initiatives towards Financial Inclusion not only in India but in the world. Financial Inclusion is among the top-most priorities of the Government as it is an enabler for inclusive growth. It provides an avenue to the poor for bringing their savings into the formal financial system, an avenue to remit money to their families besides taking them out of the clutches of the usurious money lenders."
The Ministry of Finance stated that it is committed to providing financial inclusiveness and support to the marginalised and hitherto socio-economically neglected classes. Financial inclusion is a national priority of the Government as it is an enabler for inclusive growth. It is important as it provides an avenue to the poor for bringing their savings into the formal financial system, an avenue to remit money to their families in villages besides taking them out of the clutches of the usurious money lenders. A key initiative towards this commitment is the Pradhan Mantri Jan Dhan Yojna (PMJDY), which is one of the biggest financial inclusion initiatives in the world.
The scheme is aimed at ensuring access to financial products and services at an affordable cost and use of technology to lower cost and widen reach.
The basic tenets of the scheme include opening of basic savings bank deposit (BSBD) account with minimal paperwork, relaxed KYC, e-KYC, account opening in camp mode, zero balance and zero charges; issuance of Indigenous Debit cards for cash withdrawals and payments at merchant locations, with free accident insurance coverage of Rs 2 lakh and funding the unfunded through other financial products like micro-insurance, overdraft for consumption, micro-pension and micro-credit.
The scheme was launched based upon six pillars which include 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 with some guarantee against defaults; Insurance - accident cover up to Rs 1,00,000 and life cover of Rs 30,000 on the account opened between 15 Aug 2014 to 31 January 2015 and pension scheme for Unorganized sector.
Among the important approach adopted in PMJDY based on past experiences include the opening of online accounts in the core banking system of banks in place of the 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 and simplified KYC/e-KYC in place of cumbersome KYC formalities.
The Government decided to extend the comprehensive PMJDY program beyond August 28, 2018, with some modifications which included a focussed 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 August 28, 2018; enhancement in overdraft facilities - OD limit doubled from Rs 5,000 to Rs 10,000; OD upto Rs 2,000 (without conditions) and an increase in upper age limit for OD from 60 to 65 years.
Describing the impact of the scheme, the Ministry of Finance stated that PMJDY has been the foundation stone for people-centric economic initiatives. Whether it is direct benefit transfers, COVID-19 financial assistance, PM-KISAN, increased wages under MGNREGA, life and health insurance cover, the first step of all these initiatives is to provide every adult with a bank account, which PMJDY has nearly completed.
One in two accounts opened between March 2014 to March 2020 was a PMJDY account. Within 10 days of nationwide lockdown more than about 20 crore women, PMJDY accounts were credited with ex-gratia.
In today's COVID-19 times, remarkable swiftness and seamlessness with which Direct Benefit Transfer (DBTs) have empowered and provided financial security to the vulnerable sections of society, said the ministry, adding that an important aspect is that DBTs via PM Jan Dhan accounts have ensured every rupee reaches its intended beneficiary and preventing systemic leakage.
As per extant RBI guidelines, a PMJDY account is treated as inoperative if there are no customer induced transactions in the account for over a period of two years. In August 2021, out of a total of 43.04 crore PMJDY accounts, 36.86 crores (85.6 per cent) are operative. Continuous increase in the percentage of operative accounts is an indication that more and more of these accounts are being used by customers on a regular basis. Only 8.2 per cent of PMJDY accounts are zero balance accounts.
The total deposit balances under PMJDY Accounts stand at Rs 1,46,230 crore. The deposits have increased about 6.38 times with an increase in accounts 2.4 times between August 2015 and August 2021.
The average deposit per account is Rs 3,398. The average deposit per account has increased over 2.7 times over August 2015. An increase in the average deposit is another indication of increased usage of accounts and inculcation of saving habits among account holders.
So far, 31.23 Crore RuPay cards have been issued to PMJDY account holders and their usage has increased over time.
For PMJDY account holders, a mobile application was launched to provide a citizen-centric platform for locating banking touchpoints such as bank branches, ATMs, Bank Mitras, Post Offices, etc. in the country. Over 8 lakh banking touchpoints have been mapped on the GIS App. The facilities under Jan Dhan Darshak App could be availed as per the need and convenience of common people.
As part of the scheme, as announced by Union Finance Minister <a href="/topic/nirmala-sitharaman">Nirmala Sitharaman on March 26, 2020, under the PM Garib Kalyan Yojana, an amount of Rs 500 per month for three months (April 2020 to June 2020), was credited to the accounts of women account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY). A total of Rs 30,945 crore have been credited in accounts of women PMJDY account holders during the COVID-19 lockdown.
About 5 crore PMJDY accountholders received direct benefit transfer (DBT) from the Government under various schemes. To ensure that the eligible beneficiaries receive their DBT in time, the Department played an active role in the identification of avoidable reasons for DBT failures in consultation with DBT Mission, NPCI, banks and various other Ministries. With close monitoring in this regard through regular VCs with banks and NPCI, the share of DBT failures due to avoidable reasons as a percentage of total DBT failures has decreased from 13.5 per cent (fiscal year 19-20) to 5.7 per cent (fiscal year 20-21).
On the road ahead, the government aims to ensure coverage of PMJDY account holders under micro insurance schemes. Eligible PMJDY accountholders will be sought to be covered under PMJJBY and PMSBY. Banks have already been communicated about the same. It also aims to promote digital payments including RuPay debit card usage amongst PMJDY account holders through the creation of acceptance infrastructure across India and improve the access of PMJDY account holders to Micro-credit and micro-investment such as Flexi-recurring deposit etc.
