Pradhan Mantri Jan Dhan Yojana: All You Need To Know

PMJDY has brought the unbanked into the banking system, expanded the financial architecture of India, and brought financial inclusion to almost every adult.
Pradhan Mantri Jan Dhan Yojana
Pradhan Mantri Jan Dhan Yojana

The Pradhan Mantri Jan Dhan Yojana (PMJDY), the largest financial inclusion initiative globally, was announced by the Hon'ble Prime Minister (PM) Shri Narendra Modi on 15th August 2014 at the Red Fort and launched nationwide on 28th August 2014.

During its launch, the PM described the occasion as a festival celebrating the liberation of the poor from a vicious cycle of poverty.

In an aim to reduce poverty, the government of India gives importance to financial inclusion. If there’s a lack of access to financial services, it slows down our country’s growth.

For inclusive development, a scheme was necessary to empower citizens financially.

Pradhan Mantri Jan Dhan Yojana (PMJDY) is a National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, and Pension in an affordable manner.

1. Objectives:

  • Ensure access to financial products & services at an affordable cost

  • Use of technology to lower cost & widen reach

2. 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 lakh.

  • Funding The Unfunded - Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit.

“Being one of the biggest financial inclusion initiatives in the world, the Ministry of Finance continuously endeavors to provide financial inclusiveness and support to the marginalized and economically backward sections through its financial inclusion-led interventions. Financial Inclusion (FI) promotes equitable and inclusive growth as well as delivery of financial services at an affordable cost to vulnerable groups such as low-income groups and weaker sections that lack access to basic banking services” according to a press statement issued by the Ministry of Finance.

Financial Inclusion also brings savings of the poor into the formal financial system and provides an avenue to remit money to their families in villages besides taking them out of the clutches of the usurious money lenders.

On the ninth anniversary of PMJDY, Union Finance Minister Smt. Nirmala Sitharaman, in her message, said, “The nine years of PMJDY-led interventions and digital transformation have revolutionized financial inclusion in India. It is heartening to note that more than 50 crore people have been brought into the formal banking system through the opening of Jan Dhan Accounts. Among these accounts, approximately 55.5 per cent belong to women, and 67 per cent have been opened in rural / semi-urban areas. The cumulative deposits in these accounts surpass Rs 2 lakh crore. Furthermore, about 34 crore RuPay cards have been issued to these accounts without charge, which also provides for a Rs 2 lakh accident insurance cover.”

“With the collaborative efforts of stakeholders, banks, insurance companies, and government officials, the PMJDY stands out as a pivotal initiative, changing the landscape of financial inclusion in the country as envisioned by Hon’ble Prime Minister Shri Narendra Modi,” Sitharaman said.

Union Minister of State for Finance Dr. Bhagwat Kisanrao Karad also expressed his thoughts for PMJDY on this occasion. He said, “PMJDY scheme has reduced financial untouchability by bringing the marginalized sections of the society into the ambit of formal banking. By providing access to banking facilities to vulnerable sections of society, facilitating access to the availability of credit, providing insurance and pension coverage, and creating financial awareness, the outcomes of the scheme are far-reaching and have a multiplier effect on the economy. Further, Jan Dhan–Aadhaar–Mobile (JAM) architecture has enabled the seamless transfer of government benefits into the accounts of the common man seamlessly. PMJDY accounts have become the fulcrum of people-centric initiatives like DBT and have contributed towards inclusive growth of all sections of the society, especially the underprivileged.”

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