Pradhan Mantri Jan Dhan Yojana (PMJDY)

Pradhan Mantri Jan Dhan Yojana (PMJDY)

Hon’ble Prime Minister announced Pradhan Mantri Jan Dhan Yojana as the National Mission on Financial Inclusion in his Independence Day address on 15th August 2014, to ensure comprehensive financial inclusion of all the households in the country by providing universal access to banking facilities with at least one basic bank account to every household, financial literacy, access to credit, insurance and pension facility. Under this, a person not having a savings account can open an account without the requirement of any minimum balance and, in case they self-certify that they do not have any of the officially valid documents required for opening a savings account, they may open a small account. Further, to expand the reach of banking services, all of over 6 lakh villages in the country were mapped into 1.59 lakh Sub Service Areas (SSAs), with each SSA typically comprising of 1,000 to 1,500 households, and in the 1.26 lakh SSAs that did not have a bank branch, Bank Mitras were deployed for branchless banking.

Pradhan+Mantri+Jan+Dhan+Yojana

Thus, PMJDY offers unbanked persons easy access to banking services and awareness about financial products through financial literacy programmes. In addition, they receive a RuPay debit card, with inbuilt accident insurance cover of Rs. 1 lakh, and access to overdraft facility upon satisfactory operation of account or credit history of six months. Further, through Prime Minister’s Social Security Schemes, launched by the Hon’ble Prime Minister on 9th May 2015, all eligible account holders can access through their bank accounts personal accident insurance cover under Pradhan Mantri Suraksha Bima Yojana, life insurance cover under Pradhan Mantri Jeevan Jyoti Bima Yojana, and guaranteed minimum pension to subscribers under Atal Pension Yojana.

PMJDY was conceived as a bold, innovative and ambitious mission. Census 2011 estimated that out of 24.67 crore households in the country, 14.48 crore (58.7%) had access to banking services. In the first phase of the scheme, these households were targeted for inclusion through opening of a bank account within a year of launch of the scheme. The actual achievement, by 26th January 2015, was 12.55 crore. As on 29.3.2017, the number of accounts has grown to 28.17 crore. Further, in 2011, only 0.33 lakh SSAs had banking facility and through provision of Bank Mitras in 1.26 lakh branchless SSAs, banking services were extended throughout rural India. The inclusive aspect of this is evident from the fact that 16.87 crore (60%) of PMJDY accounts are in rural areas and 14.49 crore (over 51%) PMJDY account holders are women.

The deposit base of PMJDY accounts has expanded over time. As on 29.3.2017, the deposit balance in PMJDY accounts was Rs. 62,972 crore. The average deposit per account has more than doubled from Rs. 1,064 in March 2015 to Rs. 2,235 in March 2017.

The Bank Mitra network has also gained in strength and usage. The average number of transactions per Bank Mitra, on the Aadhaar Enabled Payment System operated by Bank Mitras, has risen by over eightyfold, from 52 transactions in 2014-15 to 4,291 transactions in 2016-17.

From Jan Dhan to Jan Suraksha

For creating a universal social security system for all Indians, especially the poor and the under-privileged the Hon’ble Prime Minister launched three Social Security Schemes in the Insurance and Pension sectors on 9th of May, 2015.
Opening of no-frills accounts: The Bank account open under PMJDY does not require minimum balance. And Overdraft facility up-to ₹.10000 is also available after six months. Interest is on deposit. Free RuPay debit card for account.
Relaxation on know-your-customer (KYC) norms: Person don't have valid identification document can also open bank account. This type of account call "Small Account" , can regularised within one year.

Engaging business correspondents (BCs): Account opening and bank transactions are through business correspondent. Usually business corespondent appointed in remote rural area where bank branches not present.

Use of technology: Bio-metric based account opening and transaction are available through business correspondent. This helps illiterate people also do banking.

Direct Benefit Transfer: The government subsidies are directly transferred to the beneficiary. This reduces delay and leakage to get service.

Insurance: Accidental insurance cover of ₹.2.00 lac. provide life cover of ₹. 30,000/- payable on death of the beneficiary.

Investments

Pradhan Mantri Jan-Dhan Yojana statistics as on 26 December 2018 (All figures in crores)
Bank Type
Number of Accounts
Balance in Accounts
Number of RuPay Cards
Rural
Urban
Total
Female
Public Sector Banks
14.62
12.43
27.05
14.23
₹69,083.71
22.10
Regional Rural Banks
4.67
0.88
5.55
3.06
₹14,838.24
3.79
Private Banks
0.62
0.43
1.05
0.55
₹2,398.85
0.98
Total
19.92
13.74
33.66
17.84
₹86,320.79 crore (US$12 billion)
26.87
Performance

Due to the preparations done in the run-up, as mentioned above, on the inauguration day, 1.5 Crore (15 million) bank accounts were opened.[2] The Prime Minister said on this occasion- "Let us celebrate today as the day of financial freedom." By September 2014, 3.02 crore accounts were opened under the scheme, amongst Public sector banks, SBI had opened 30 lakh (3 million) accounts, followed by Punjab National Bank with 20.24 lakh (2 million) accounts, Canara Bank 16.21 lakh (1.62 million) accounts, Central Bank of India 15.98 lakh (1.59 million) accounts and Bank of Baroda with 14.22 lakh (1.42 million) accounts.[7] On 20 January 2015, the scheme entered into Guinness book of world records setting new record for 'The most bank accounts opened in one week'.

The balance in Jan Dhan accounts rose by more than ₹270 billion (US$3.8 billion) between 9 November 2016 and 23 November 2016.[9] 19 lakh householders have availed the overdraft facility of ₹2.56 billion (US$36 million) by May 2016.[10] Uttar Pradesh and West Bengal have got 29% of the total deposits under the scheme,[11]whereas Kerala and Goa became the first states in the country to provide one basic bank account to every household.[12]

The total number of account holders stood at 294.8 million, including 176.1 million account holders from rural and semi-urban branches. A total of 227 million RuPay cards have been issued by National Payments Corporation of India (NPCI) till August 2017. The amount of deposits rose to ₹656.97 billion (US$9.1 billion) by August 2017.[6]

According to an analysis of various studies, "Beyond enabling account ownership and the use of financial services, the PMJDY also facilitated financial inclusion for a variety of demographics. While the programme has made significant headway towards genuine financial inclusion, it is clear that improving policy communication, widening and deepening progress in low-income states, and ironing out the kinks in the bank-agent model will be crucial if these hard-fought gains are to prove sustainable."[13] At least 30 crore new families have got Jan Dhan accounts in which almost Rs 65,000 crore have been deposited, Prime Minister Narendra Modi said on 28 August 2017, on the eve of third anniversary of the scheme aimed at financial inclusion.
Criticism

The scheme has been criticized by opposition as an effort to please voters that has created unnecessary work-burden on the public-sector banks. It has been claimed that the poor deserve food more than bank accounts and financial security. Further, these accounts have not yet added considerable profits to PSU banks. According to the experts, offers like zero balance, free insurance and overdraft facility would result in duplication. Many individuals who already have bank accounts may have had accounts created for themselves, lured by the insurance covers and overdraft facilities.  As per the scheme, a very few people are eligible to get the life insurance worth ₹30,000 (US$420) with a validity of just five years.[19] The claimed overdraft facility has been completely left upon the banks. As per the government notice, only those people would get the overdraft facility whose transaction record has satisfactory operations in their account for some time.[20]

In addition, while the Indian Government was actively attempting to promote financial inclusion through this scheme, the Reserve Bank of India, permitted banks to charge customers for conducting ATM transactions beyond a certain number of times per month. This effectively prevented people from easily accessing their own savings and discouraged them from using formal banking channels.

It is estimated that huge amount of black money has been converted into white through Jan Dhan accounts after demonetisation. [24]

Application Form for Pradhan Mantri Jan Dhan Yojana

You can download the application form for Pradhan Mantri Jan Dhan Yojana from the scheme’s official website, fill it out, and submit it at the local bank branch. You will also have to provide some documents along with the form to avail this scheme.

Pradhan Mantri Jan Dhan Yojana is an excellent and innovative scheme to boost social security in the country and to ensure that all citizens in all parts of country are connected financially. The scheme aims to foster the saving trend in citizens by making available a savings account to each family in the urban, semi-urban as well as rural parts of the nation. The scheme also brings along an inter-linked life insurance as well as accidental insurance policy. This will help bring crores of Indians under the purview of insurance protection who otherwise are unable to afford insurance.

Financial Inclusion Account Opening Form (Jan Dhan Yojana Application Form)

The application form for Pradhan Mantri Jan Dhan Yojana is known as Financial Inclusion Account Opening Form, based on the aim of financial inclusion that the scheme wishes to realize. Following are the contents of the form which needs to be duly filled and submitted in order to avail the Pradhan Mantri Jan Dhan Yojana Scheme.

Bank Details where the account is being opened
  • Name of the Bank Branch
  • Name of the applicant’s Village or Town
  • Sub District or Block Name
  • District
  • State
  • SSA Code or Ward Number
  • Village Code or Town Code
Scheme Applicant’s Details
  • Full Name
  • Marital Status
  • Name of Father/Spouse
  • Address
  • Pin Code
  • Telephone and Mobiel No.
  • Aadhar Number
  • MNREGA Job Card Number
  • Occupation/Profession
  • Annual Income
  • Number of dependents
  • Asset Details
  • Existing Bank Account Number if any
  • Kisan Credit Card Details
Nominee Details
  • Name of Nominee
  • Relationship
  • Age
  • Date of Birth of Nominee in case of minor
  • Person authorized to receive funds in the event of minor nominee’s death
Process for Pradhan Mantri Jan Dhan Yojana Account Opening

A duly filled copy of the Pradhan Mantri Jan Dhan Yojana form is to be submitted to the bank where you are opening your account. Usually all participating banks will have a Jan Dhan Yojana dedicated desk where you will be helped by Jan Dhan Professionals called Bank Mitr who will help you with the form submission and account opening procedure in order to obtain Pradhan Mantri Jan Dhan Yojana Account. The account opening form needs to be submitted along with certain ID proofs like identity and address proofs. However, applicants with a valid Aadhar number will not be required to submit any extra proofs. Also, two passport sized photographs needs to be furnished to the bank at the time of account opening.

Once the documents are submitted, account will be opened in a few working days and the applicant will be given a passbook, a cheque book, a RUPay Debit card and in some cases a Jan Dhan Yojana 

Information kit by the bank.
  • Download Application Form for Jan Dhan Yojana Bank Account
  • To apply for the account, you will be required to download the application form in PDF format (available in Hindi and English) from the official website for the scheme. You can choose a file of either language, as per your convenience.
  • In the downloaded form, you have to fill in the name of the bank, along with the bank code. Also update the bank branch, name of the village and town, block name/sub district, district, state, ward number/SSA code, village code, and town code.
  • Enter your personal information, such as name, address, occupation, Aadhaar number, annual income, existing bank accounts of your family members, and details of your kisan credit card. You should also tick the checkbox in order to receive a Rupay debit card.
  • You should next enter the nomination details and submit the form to the nearest bank branch.
  • You should ensure that the form is filled in accurately. In case you have any queries, you can approach the bank officials for clarification before submitting the form.
In addition to the application form you will be required to submit the following documents to avail the benefits of this scheme:
  • Ration card
  • Voter ID card
  • PAN card
  • Permanent/temporary address proof that could be an electricity bill, water bill, or gas connection bill.
  • Aadhaar card
  • Government ID proof
  • Any other documents as requested by the bank
Once the account has been set up, the account holder can take a loan of up to Rs.5,000 from the bank after 6 months of opening the account. This loan benefit will offer consolation to many beneficiaries under the scheme who are below the poverty line. They can utilise this loan amount to invest in more profitable ventures or in agricultural prospects.

Account holders under the scheme can also avail insurance coverage worth Rs.30,000 if they satisfy certain conditions. This includes being in possession of an accidental insurance coverage above Rs.2 lakh, and opening of the account by 26th January, 2015. PMJDY also enables account holders to check bank balances and transfer funds through their mobile phones.
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