The government aims to open more than 3 crore accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY) during the current financial year 2024-25

About Pradhan Mantri Jan Dhan Yojana (PMJDY)

• Pradhan Mantri Jan Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.
• Launch: The PMJDY was announced by the Prime Minister in his Independence Day address on 15th August 2014.
• 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
• Initial Features of PMJDY: 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 Programme: 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 (increased to Rs. 2 lakhs) and life cover of Rs. 30,000 on account opened between 15 Aug 2014 to 31 January 2015
  • Pension scheme for Unorganised sector
• Other Major Features: Under the PMJDY, there are no account opening charges, no account maintenance charges, and no minimum balance charges. 

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Achievements under Pradhan Mantri Jan Dhan Yojana

• PMJDY Accounts : There were more than 173 crore operative CASA accounts in the country out of which over 53 crore are operative PMJDY accounts. 
• Deposits under PMJDY accounts: Total deposit balances under PMJDY Accounts stand at Rs. 2,31,236 crore. Deposits have increased about 15 times with increase in accounts 3.6 times
• Average Deposit per PMJDY account :  Average deposit per account is Rs. 4,352 .Avg. Deposit per account has increased 4 times
  • Increase in average deposit is another indication of increased usage of accounts and inculcation of saving habit among account holders
• Operative Accounts: Around 80 percent of PMJDY accounts are operative and 20 per cent inoperative.
• Towards ensuring smooth DBT transactions: Remarkable swiftness and seamlessness with which Direct Benefit Transfer (DBTs) have empowered and provided financial security to the vulnerable sections of society. 
  • DBTs via PMJDY accounts have ensured every rupee reaches its intended beneficiary and prevented systemic leakage.
• Jan-Dhan Aadhaar and mobile (JAM) trinity: With PMJDY as one of its pillars, has proven to be a diversion-proof subsidy delivery mechanism. 
  • Through JAM, under Direct Benefit Transfer, the government has successfully transferred subsidies and social benefits directly into the bank accounts of the underprivileged.
• Inclusivity: Of the total accounts opened under the scheme, about 66.6 per cent accounts are opened in rural and semi-urban areas. 
  • Women: Of the total 53.13 crore PMJDY accounts, 29.56 crore (55.6 percent) belong to women account holders.
  • Today, 99.95 per cent of all inhabited villages have access to banking facilities within a 5-km radius through banking touch points 

PM Jan Dhan Yojana Challenges

• Low Balance: Though the scheme became very popular, it has around 8.4% of accounts with zero balances and approximately 20% of accounts were inactive.
• Multiple Accounts: Many cases have been detected where an individual has opened more than one account in various banks.
• Overdraft facility Issues: Overdraft facility needs to be properly regulated, as the same is the discretionary of the concerned banks.
  • Many banks may decline to extend the overdraft facility therefore defeating the purpose.
• Misuse of Authority: Business correspondents if made to accomplish the objective may misuse the authority and thereby making the life of people below poverty line miserable.
  • Private Banks levy hidden charges on the beneficiary which may become a deterrent for financial inclusion.
• Duplication issue: KYC norms are not insisted under this programme, therefore duplication is unavoidable.
• Lack of Infrastructure: Making every village a Swavalamban village is considered to be an advantage but the lack of infrastructure may become a major hurdle for the effective implementation.
• Bad Loans: It is a possibility that the overdraft facility could end up as bad loans for banks as the scheme does not spell out how the banks can collect debts.

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Suggestions

• KYC details: Duplication of accounts by single person shall be checked under KYC details.
• Effective Regulation: Public sector banks and India post can be pressed into action for the effective implementation of Jan Dhan Yojana. Private Banks shall be strictly warned not to levy hidden charges.
• Financial Literacy: More centers of financial literacy may be established to bring excluded people under financial inclusion.
• ATM: The ATM needs to be strengthened in terms of more Kiosks not only in urban but also in rural areas of India.
• Frill Account: No frill account should be encouraged by the banks in India otherwise the financial inclusion especially for the people who are deprived of banking services will have a backseat.
  • Frill Account: It is a type of basic Savings Account that does not require you to maintain a minimum balance, as in the case of a regular Savings Account.

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