Pradhan Mantri Jan Dhan Yojana
|Pradhan Mantri Jan Dhan Yojana (PMJDY)|
PM Modi launches the "Pradhan Mantri Jan Dhan Yojana"
|Prime Minister(s)||Narendra Modi|
|Key people||Arun Jaitley|
|Launched||28 August 2014|
Pradhan Mantri Jan Dhan Yojana (PMJDY), Prime Minister's Peoples' Wealth Scheme, is a government scheme that aims to expand and make affordable access to financial services such as bank accounts, remittances, credit, insurance and pensions. This financial inclusion campaign was launched by the Prime Minister of India Narendra Modi on 15 August 2014. He had announced this scheme on his first Independence Day speech on 15 August 2014.
Run by Department of Financial Services, Ministry of Finance, under this scheme 1.5 Crore (15 million) bank accounts were opened on inauguration day. The Guinness Book of World Records recognised this achievement, stating: "The most bank accounts opened in one week as a part of the financial inclusion campaign is 18,096,130 and was achieved by the Government of India from August 23 to 29, 2014". By 27 June 2018, over 31 crore (318 million) bank accounts were opened and over ₹792 billion (US$12 billion) were deposited under the scheme.
|Bank Type||Number of Accounts||Balance in Accounts||Number of RuPay Cards|
|Public Sector Banks||13.82||11.88||25.70||13.47||₹64,681.21||19.36|
|Regional Rural Banks||4.32||0.80||5.11||2.80||₹13,668.82||3.69|
|Total||18.74||13.07||31.80||16.80||₹80,578.30 crore (US$12 billion)||23.97|
In the run up to the formal launch of this scheme, the Prime Minister personally wrote to Chairpersons of all PSU banks to gear up for the gigantic task of enrolling over 7.5 crore (75 million) households. In this email he categorically declared that a bank account for each household was a "national priority".
The scheme has been started with a target to provide 'universal and clear access to banking facilities' starting with "Basic Banking Accounts" with overdraft facility of ₹5,000 (US$75) after six months and RuPay Debit card with inbuilt accident insurance cover of ₹1 lakh (US$1,500) and RuPay Kisan Card. As many as 1,767 claims were settled toward accidental insurance to RuPay Card holders under the government's flagship financial inclusion programme Pradhan Mantri Jan Dhan Yojana (PMJDY) as said by PM on 15 August 2017. In next phase, micro insurance & pension etc. will also be added.
Under the scheme:
- Account holders will be provided bank accounts with no minimum balance.
- RuPay debit cards will be issued.
- Accidental insurance cover of ₹1 lakh (US$1,500).
- After six months of opening of the bank account, holders will be eligible for ₹5,000 (US$75) overdraft from the bank.
- With the introduction of new technology introduced by National Payments Corporation of India (NPCI), a person can transfer funds, check balance through a normal phone which was earlier limited only to smart phones.
- Mobile banking for the poor would be available through National Unified USSD Platform (NUUP) for which all banks and mobile companies have come together.
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. 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. 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$4.0 billion) between 9 November 2016 and 23 November 2016. 19 lakh householders have availed the overdraft facility of ₹2.56 billion (US$38 million) by May 2016. Uttar Pradesh and West Bengal have got 29% of the total deposits under the scheme, whereas Kerala and Goa became the first states in the country to provide one basic bank account to every household.
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$9.8 billion) by August 2017.
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." 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.
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$450) with a validity of just five years. 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.
In addition, while the Indian Government was actively attempting to promote financial inclusion through this scheme, the Reserve Bank of India, then headed by Raghuram Rajan, 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.
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