Why in news?
On the completion of 11 years of the Pradhan Mantri Jan Dhan Yojana, the government released new data showing that the number of basic bank accounts under the scheme has crossed 50 crore. Recent amendments have also extended accidental insurance coverage linked to RuPay cards.
Background
PMJDY was launched on 28 August 2014 as a national mission on financial inclusion. The aim is to provide universal access to banking services, especially to the unbanked population in rural and urban areas. Accounts can be opened at zero balance with simplified know‑your‑customer (KYC) procedures, and every account holder receives a RuPay debit card.
Main features
- Zero‑balance accounts: Individuals can open a basic savings bank account with no minimum balance. Each household is encouraged to have at least one account.
- RuPay debit card: Accounts come with a free RuPay card that offers accident insurance cover. The cover was initially ₹1 lakh and has now been increased for accounts opened after 2018.
- Overdraft facility: After satisfactory operation for six months, account holders are eligible for an overdraft of up to ₹10,000, helping them manage emergencies.
- Direct benefit transfers: Government schemes such as LPG subsidies, pensions and scholarships are credited directly into PMJDY accounts, reducing leakage and delays.
- Financial literacy: The mission includes mass awareness campaigns and financial literacy programmes to educate account holders on using digital payments and savings products.
Impact
- Enhanced inclusion: PMJDY has brought millions of previously unbanked people into the formal banking system, enabling them to access credit, insurance and remittance services.
- Reduced cash economy: The integration of PMJDY accounts with mobile wallets and UPI has encouraged digital transactions, reducing dependence on cash.
- Women empowerment: A significant proportion of account holders are women, giving them greater control over household finances.
Conclusion
PMJDY demonstrates how inclusive banking can drive social change. Continued efforts to improve account usage, financial literacy and digital infrastructure will help maximise its benefits.
Source: PMJDY Portal