Pradhan Mantri Jan Dhan Yojana

(PMJDY) Introduction

Jan Dhan Yojana (JDY) a nationwide scheme being launched at Red Fort
on 28th August 2014 by newly elected Prime Minister is an ambitious
financial inclusion program. The focus of this scheme is to achieve financial
inclusion of every person residing in India who does not have a bank
account.
The scheme will make sure everyone should achieve financial access that is
not able to receive benefits from other financial schemes of government.
The financial inclusion hereby stands for financial services like
saving/banking & account deposit, pension, insurance, credit in an
affordable
manner.

Why is Jan Dhan Yojana?

In the current state financial untouchability is a big apprehension in the
country. Therefore, a universal bank account can be considered as the
initial step to exterminate the financial untouchability from the country.
Bank account will connect everyone in the country with our economic
system and provide a source to our decision makers for planning better
economic policies.

Benefits of Jan Dhan Yojana

The scheme is performing miracles or kind of- a huge mobilization attempt
to accomplish an act never achieved or attempted. The mobilization drive is
exceptional which is promoting a new business field Microfinance.
Microfinance firms are funded by stock market and venture capitalists
replacing the moneylender with a little less usurious business model.
The rationale of this scheme will surely provide lucrative benefits to the
entire economy which must be positively considered and availed. Here are
the key benefits which surely motivates the country to a flourishing future.

1. Every family in the country will get an opportunity to open a bank

account which will be free of cost and smoothly. This will give a place
to them to put their hard earn earnings.
2. Each household will be availed a RuPay debit card. With the
reasonable operation of the bank account for 6 months, the account
holder will be provided an overdraft facility of Rs 5000. According to
Narendra Modi a debit card will help to offset the present economic
apartheid in India.
3. These new account will be zero balance account and therefore do not
require to be filled with cash at the time of opening the account.
4. The account holder will also be provided with Rs.30000 insurance
coverage after satisfactorily complying few specification associated
with the scheme which includes account opening by 26 January, 2015.
 5. The scheme also avail an accidental insurance of 1 lakh. This will take
away financial pressure from the lower income sections, which many
times are left with nothing when the bread earner member of the
family passes away.
6. The scheme also avail the mobile banking facilities of transferring
and checking balances through smart phones which is much
reasonable in the current economy.

How is Pradhan Mantri Jan Dhan Yojana

Beneficial
Pradhan Mantri Jan Dhan Yojana was announced by the honourable Prime Minister of India
Shri. Narendra Modi in the year 2014, on the eve of Independence Day. The scheme aims to tie
every Indian in the rural or urban sector to the mainstream banking system. This will aid the
financial status of the account holders as well as foster social security goals of the central
government. The scheme is run by the Ministry of Finance and holds the Guinness World
Record for the highest number of accounts opened in a week anywhere in the world. Over
1,80,96,130 accounts were opened by individuals during the first week of launch of the scheme.

Under the Jan Dhan scheme, any individual who is older than 10 years of age and does not
possess a bank account can open one in his or her name with an opening deposit of zero.
Accounts under this scheme can be opened with any registered bank or with Business
Correspondent Outlet (Bank Mitr) designed specially to facilitate account opening under the Jan
Dhan Scheme.

Advantages of Pradhan Mantri Jan Dhan Yojana

Pradhan Mantri Jan Dhan Yojana was launched at a massive scale to bring under the purview of
banking all citizens of the country; irrespective of their financial status or regional location. The
scheme has seen tremendous enthusiasm among customers from both rural and urban areas.
The scheme is a social policy aimed at providing banking facilities to even those who do not
have the money to pay for the minimum account balance at the time of account opening. The
Jan Dhan Yojana aims at revolutionizing the way banking is done in the country and it aims to
 help the economically weaker sections of the society to become financially confident. Let us look
into some of the most significant benefits that this scheme offers to the citizens of India.

Loan benefit against Pradhan Mantri Jan Dhan Yojana

Individuals whose Jan Dhan account completes 6 months are eligible to obtain loans of up to
Rs.5000. Although the loan amount seems insignificant as compared to that offered as standard
loan by various banks, but is quite substantial when we think of the economic status of
individuals that this scheme is aimed at uplifting. The Pradhan Mantri Jan Dhan Yojana is aimed
at financial inclusion of the economically weaker section of the society. Most importantly it aims
to cover people from the rural areas as well as the unorganised sector of the urban and semi-
urban areas.

Mobile Banking with Pradhan Mantri Jan Dhan Yojana

Mobile Banking is not a new innovation anymore. Various private and public banks offer mobile
banking facilities to customers. However, keeping in mind the economic status of people below
poverty line, Pradhan Mantri Jan Dhan Yojana aims to make available certain basic financial
transactions via ordinary mobile phones and not smart phones. This step will ensure that even
people from rural areas and those from the unorganized sector have access to quick and
convenient banking options. The idea behind this feature is to innovate as much as possible to
ensure financial inclusion as well as financial security to as many Indians as possible.

Insurance benefits under the Pradhan Mantri Jan Dhan Yojana

The best and the most significant benefit of Pradhan Mantri Jan Dhan Yojana is that it brings
under the purview of insurance, a lot of people who could not have availed insurance out of their
own pocket. The scheme offers a life cover of Rs.30,000 to customers who comply with certain
norms of the scheme and offers Rs.2,00,000 as insurance sum in the event of death due to
accident.

Apart from the above listed standard benefits of the scheme, the Yojana also offers the following
macro level benefits for the entire nation to progress.

An account for each family which ensures they have a savings account to put away their
savings into.
Each family gets a RuPay debit card along with the Jan Dhan bank account. This
ensures easy withdrawal of money from ATMs.
The Jan Dhan Yojana account is a zero balance account and as such account holders
are not required to maintain a minimum balance in their accounts.
 Pradhan mantri Jan Dhan Yojana brings under the purview of insurance a lot of people
who cannot afford insurance out of their own pocket. Insurance coverage for all means higher
value being attached to lives of citizens.
An overdraft facility of Rs.5000 will be offered with Pradhan Mantri Jan Dhan account. In
case the overdraft availed is paid back promptly, the bank may increase this limit to
Rs.15,000. This however, is solely based on the discretion of the bank in question.
Pradhan Mantri Jan Dhan Yojana is an aadhar linked scheme so as to avoid fraud
related to account opening.
Interest similar to that offered by various public and private banks on their savings
accounts will apply to Pradhan Mantri Jan Dhan accounts too. Hence, individuals get to earn
interest on the amount that they deposit and save in their Jan Dhan accounts.
Pradhan Mantri Jan Dhan account can be used to transfer money to and from various
other public and private banks in the country.
Account transfer for Pradhan Mantri Jan Dhan Yojana can be done from one bank in the
country to another. This is possible since all participating banks are connected via the core
banking solution or CBS.
Pradhan Mantri Jan Dhan Yojana might prove instrumental in reducing the dependency
of farmers on local money lenders. This is one of the topmost reasons for farmers getting
stuck in a vicious circle of debt. Loan and overdraft facility linked with this account will allow
farmers to avoid borrowing from small money lenders who have no formal account keeping
processes and as such indulge in fraudulent transactions to extract more payment from
borrowers.
Under the Pradhan Mantri jan Dhan Yojana, at the time of account opening, customers
will be handed over a kit that includes account passbook, cheque book as well as a financial
literacy guide. However, the contents of this kit too might differ from one bank to another.

Zero Balance Requirements

To open a Jan Dhan account is free of cost and does not require any amount to be deposited
initially. Most savings bank accounts require an initial deposit to open a bank account and
also a minimum balance to be maintained on a monthly or quarterly basis. But with a Jan
Dhan account, these requirements are done away with so that anyone can open this account
even if they do not have money to deposit right away.

Interest on Deposits

Deposits made into the Jan Dhan accounts are eligible to earn interest at the rate declared
which is subject to change from time to time. Interest rates will be similar to that offered by
various public and private banks.
Cheque Book Facility

Account holders can avail a chequebook from their bank if they require. This will be helpful in
making payments without cash. To get a cheque book, there is a minimum balance required
in the account.

Savings for the family

The Jan Dhan scheme provides for an account for each family. This facility ensures they have
some form of financial inclusion that allows them to start saving and growing their money.

Debit Card Facility

Along with the Jan Dhan bank account, every family will get a RuPay debit card. This gives
account holders easy access to their money when they need it. They can deposit the money
and earn interest on it and withdraw it from an ATM when the need arises.

Overdraft Facility

After completing six months of satisfactory operations of the Jan Dhan account, an overdraft
facility of Rs.5000 might be offered. In case the overdraft availed is paid back promptly, the
bank may increase this limit to Rs.15,000, at its own discretion. Although the loan amount
seems insignificant as compared to that offered as standard loan by various banks, it is quite
substantial when we think of the economic status of individuals that this scheme is aimed at
uplifting. The Pradhan Mantri Jan Dhan Yojana targets the economically weaker section of the
society. Most importantly, it aims to cover people from the rural areas as well as the
unorganised sector of the urban and semi-urban areas.

Mobile Banking

Mobile banking is a very important feature of the Pradhan Mantri Jan Dhan Yojana. This
facility is not designed for smartphones but rather any mobile phone. The aim of this is to
ensure people from the rural and unorganised sectors have access to their bank accounts
and certain facilities that will provide convenience to the account holders. This feature will
help achieve the objective of financial inclusion and provide financial security to many. The
mobile banking feature allows account holders to transfer money from their phone and also
withdraw money without an ATM card.
Life Insurance

The best and the most significant benefit of Pradhan Mantri Jan Dhan Yojana is the provision
of insurance. The opportunities of insurance coverage are limited in the rural areas and to
most it is impossible to think of paying the premium for a policy. With the Jan Dhan account,
customers who fulfill the eligibility conditions will receive Rs.30,000 life cover which will be
payable to the beneficiary upon the death of the account holder.

Personal Accident Insurance

The scheme also provides for personal accident insurance under the following conditions:
The Rupay card holder must have performed at least one financial transaction successfully
within 90 days from the date of accident. Non-financial customer-induced transactions will
also be included. Transactions should be carried out at any bank branch, bank mitra, ATM,
POS, or E-com channel. This accident insurance is provided under the Rupay Insurance
Program 2016-17.

Aadhaar-Linked Account

Pradhan Mantri Jan Dhan Yojana is an aadhaar-linked scheme which helps avoid fraud
related to account opening. Individuals who receive various benefits under various
government schemes like LPG subsidy can now receive the amount directly into their PMJDY
accounts. Aadhaar-linking ensured transparency, eliminates fraud and proves to be highly
beneficial for the government and the citizens.

Access to Pension Schemes

Holding a Jan Dhan account will provide easy access to pension schemes available from the
government. It is important for every citizen to start saving even a small amount to ensure a
dignified old age.

Easy Transfers

Pradhan Mantri Jan Dhan account can be used to transfer money to and from various other
public and private banks across the country. Account transfer for Pradhan Mantri Jan Dhan
Yojana can be done from one bank in the country to another. This is possible since all
participating banks are connected via the core banking solution or CBS.
 Other Benefits

Apart from the above listed standard benefits of the scheme, the Yojana also offers the
following benefits for the entire nation to progress.

Pradhan Mantri Jan Dhan Yojana might prove instrumental in reducing the
dependency of farmers on local money lenders. This is one of the topmost reasons for
farmers getting stuck in a vicious circle of debt. Loan and overdraft facility linked with this
account will allow farmers to avoid borrowing from small money lenders who have no
formal account-keeping processes and are known to indulge in fraudulent transactions to
extract higher payments from borrowers.

Under the Pradhan Mantri jan Dhan Yojana, at the time of account opening,
customers will be handed over a kit that includes account passbook, cheque book as well
as a financial literacy guide. However, the contents of this kit might differ from one bank to
another, too.

The scheme will help enlighten a majority of the unorganised sector of the
benefits of banking and being included in the financial system.

Target of the Pradhan Mantri Jan Dhan Yojana

The scheme was targeted at the rural and unorganised sector by sending emails to banks
informing them of the PMJDY scheme. The scheme was implemented with high targets such
as opening 1 lakh accounts on the first day. Over the next few years, the government hoped
to open 7.5 crore accounts but surpassed this number by a great margin. The reality of this
scheme is reflected in the data below as on 04.01.2017:

The government has opened 26.51 crore Jan Dhan accounts in the rural and
urban sectors.
Currently, there are 16.11 crore accounts opened in the rural areas and 10.40
crore accounts in the urban areas.
Out of these accounts, 24.61% have a zero balance. Although this number has
been disputed due to the fact that banks have been depositing Re.1 upto Rs.10 in accounts
to bring down the percentage of zero balance accounts.
The total balance in these accounts amounts to Rs.70070.79.
15.19 crore accounts have been linked to Aadhaar.
20.93 crore Rupay cards have been issued.
Need for Financial Inclusion Creating a
platform for inculcating the habit to save
money The lower income category has been living under the constant
shadow of financial duress mainly because of the absence of savings. The absence
of savings makes them a vulnerable lot. Presence of banking services and products
aims to provide a critical tool to inculcate the habit to save. Capital formation in the
country is also expected to be boosted once financial inclusion measures
materialize, as people move away from traditional modes of parking their savings in
land, buildings, bullion, etc. 229 Providing formal credit avenues So far the
unbanked population has been vulnerably dependent of informal channels of credit
like family, friends and moneylenders. Availability of adequate and transparent
credit from formal banking channels shall allow the entrepreneurial spirit of the
masses to increase outputs and prosperity in the countryside. A classic example of
what easy and affordable availability of credit can do for the poor is the micro-
finance sector. Plug gaps and leaks in public subsidies and welfare programmes A
considerable sum of money that is meant for the poorest of poor does not actually
reach them. While this money meanders through large system of government
bureaucracy much of it is widely believed to leak and is unable to reach the
intended parties. Government is therefore, pushing for direct cash transfers to
beneficiaries through their bank accounts rather than subsidizing products and
making cash payments. This laudable effort is expected to reduce governments
subsidy bill (as it shall save that part of the subsidy that is leaked) and provide relief
only to the real beneficiaries. All these efforts require an efficient and affordable
banking system that can reach out to all. Therefore, there has been a push for
financial inclusion. Support from RBI for Financial Inclusion RBI set up the Khan
Commission in 2004 to look into financial inclusion and the recommendations of the
commission were incorporated into the mid-term review of the policy (200506) and
urged banks to review their existing practices to align them with the objective of
financial inclusion. RBI also exhorted the banks and stressed the need to make
available a basic banking 'no frills' account either with 'NIL' or very minimum
balances as well as charges that would make such accounts accessible to vast
sections of the population Of the many schemes and programmes pushed forward
by RBI the following need special mention. Initiation of no-frills account These
accounts provide basic facilities of deposit and withdrawal to accountholders makes
banking affordable by cutting down on extra frills that are no use for the lower
section of the society. These accounts are expected to provide a 230 low-cost mode
to access bank accounts. RBI also eased KYC (Know Your customer) norms for
opening of such accounts. Banking service reaches homes through business
correspondents The banking systems have started to adopt the business
correspondent mechanism to facilitate banking services in those areas where banks
are unable to open brick and mortar branches for cost considerations. Business
Correspondents provide affordability and easy accessibility to this unbanked
population. Armed with suitable technology, the business correspondents help in
taking the banks to the doorsteps of rural households. EBT Electronic Benefits
Transfer To plug the leakages that are present in transfer of payments through the
various levels of bureaucracy, government has begun the procedure of transferring
payment directly to accounts of the beneficiaries. This human-less transfer of
payment is expected to provide better benefits and relief to the beneficiaries while
reducing governments cost of transfer and monitoring. Once the benefits starts to
accrue to the masses, those who remain unbanked shall start looking to enter the
financial sector.
QUESTIONNAIRE ON PRADHAN MANTRI
JAN-DHAN YOJANA
PLEASE MARK TICK1.

1.Are you aware of PMJDY?

a) Yes b) No2.

2.Have you opened Bank A/C under PMJDY?

a) Yes b) No3.

3.In which bank you have opened your account?

a.Public sector Bank
b.Private sector Bank
c.RRB or Cooperative Bank

4.Do you know about facilities of PMJDY

a.Overdraft Facility
b.Insurance Coverage
c.RuPay debit card
5.What facilities of PMJDY you like most?
a.Overdraft facility
b.Rupay debit card
c.Insurance coverage.
d.All of these

6.Is it better policy than SWABHIMAN POLICY of UPA

government?
a) Yes b) No c)Cant say

7.From your family how many have opened A/C under PMJDY?
a.One
b.Two
c. More than two
d.None

8.Is it helpful to develop your saving habits by opening an A/C?

a) Yes b) No c) Cant say
9.How far is Bank from your village?
a.Below 2km
b.2km-10km
c.Above 10km

10.How often you transact with the Bank?

a.Fort nightly
b.Weekly
c.Monthly

11.Do you maintain minimum cash balance in youre a/c

or there is zero?
a) Yes b) No