The Pradhan Mantri Jan Dhan Yojana (PMJDY) was announced by the hon’ble Prime Minister of India, Sh. Narendra Modi on 15th August 2014. This financial inclusion scheme was launched a few days later on 28th August 2014 with an aim to expand the affordable access to financial services.
These services include insurance, pensions, bank accounts, credit and remittances. The department of financial services which comes under the ministry of finance is responsible for looking into the PMJDY.
15 million bank accounts were opened as a part of this scheme on the day of its inauguration and the launch day was viewed as the day of financial freedom. With its growing popularity, the program entered the Guinness Book of World Record for setting the record of most banks opened in one week. Apart from zero balance account, the scheme also provides the facility of overdraft.
What are some benefits of the PMJDY?
The PMJDY was launched with a motive to alleviate poverty by eradicating financial untouchability. It comes packed with numerous benefits. These include:
- There is no compulsion to maintain a minimum balance. However, in order to avail cheque facility, there should be a minimum balance.
- If the account is maintained in a good shape by the individual for six months, they are eligible to avail of overdraft facility.
- The account holders are offered an interest rate on the deposit made by them under this scheme. The interest rate is dependent on the savings account rate that is offered by the bank.
- A life cover of Rs. 30,000 is provided if the account was opened between 20 August 2014 and 31 January 2015. This can be availed only when the beneficiary passes away.
- An Accidental Insurance cover of Rs. 1 lakh is also offered under the RuPay scheme of PMJDY.
- There is a provision for pension access and insurance products.
- One account in the household can avail of.
- The Rs. 5,000 overdraft facility. This facility is preferably provided to the lady of the house.
- Direct benefit transfer is offered to beneficiaries of government schemes.
- A mobile banking facility is also available which makes it easier to check balances.
- The personal accident cover can only be availed after a successful financial or non-financial transaction has taken place by the RuPay card holder.
What are important requirements for opening an account under PMJDY?
Any Indian citizen who is at least ten years old and does not have an already existing bank account is eligible to open an account under the PMJDY. The individual is required to submit a photo identity proof which is duly issued by central or state government departments, statutory or regulatory authorities, public financial institutions, public sector undertakings, scheduled commercial banks, etc.
The identity proofs include passport, PAN card, Aadhar, driving license, voter ID. Along with these, you are also required to submit the National Rural Employment Guarantee Act (NREGA) job card and a photograph attested with a letter signed by a Gazetted Officer.
How to open an account under the PMJDY?
In order to open an account under the PMJDY scheme, you are required to fill out a form that is available on the PMJDY portal and submit it along with necessary documents to your nearest PMJDY affiliated bank.
Initially, opening a bank account under this scheme came free of cost but lately a lot of private channels have begun to charge a minimal fee of Rs. 20 for opening an account.
How to convert a normal savings account to a PMJDY account and vice versa?
You can convert your existing normal savings account to a PMJDY account by availing the RuPay card to enjoy the insurance benefits under the scheme. Further, he is required to write an application in the same regard to the bank. The account will be converted if it was being maintained well and the customer is not a loan repayment defaulter.
On the other hand, converting your PMJDY account to a normal account is not advisable and generally, banks do not accept such applications. Once you convert it to a normal account, a lot of charges are levied in the form of maintenance charges and others. This in turn beats the idea of financial independence.
What are the different banks that offer the PMJDY scheme?
The scheme is offered by both private and public sector banks. The banks that offer the scheme are listed below:
- Oriental Bank of Commerce (OBC)
- Union Bank of India
- Allahabad Bank
- Dena Bank
- Syndicate Bank
- Punjab & Sind Bank
- Vijaya Bank
- Central Bank of India
- Punjab National Bank (PNB)
- Indian Bank
- IDBI Bank
- Corporation Bank
- Canara Bank
- Bank of India (BoI)
- Bank of Maharashtra
- Andhra Bank
- Bank of Baroda (BoB)
- State Bank of India (SBI)
- Dhanlaxmi Bank Ltd.
- YES Bank Ltd.
- Kotak Mahindra Bank Ltd.
- Karnataka Bank Ltd.
- ING Vysya Bank Ltd.
- IndusInd Bank Ltd.
- Federal Bank Ltd.
- HDFC Bank Ltd.
- Axis Bank Ltd.
- ICICI Bank Ltd.
What insurance cover does PMJDY offer?
The beneficiary’s family is entitled to receive life insurance cover of Rs. 30,000 in case of any unexpected accident taking place. It is important to note that in a household only one account will receive life insurance cover.
There is no provision of multiple health/life insurance covers. There is a provision of accidental insurance cover as well. Under this, the scheme offers Rs. 1 lakh as an accidental life insurance cover.
Who can avail for a loan facility in PMJDY?
If an individual is able to manage his/her account in good shape for at least six months, he/she can avail of the overdraft/loan facility of up to Rs. 5,000 against his/her account. You can apply to extend the loan and then the bank can make a decision based on the regularity of your repayments. There is no need to pay processing fees for availing of the loan facility.
The loan facility comes along with an interest rate. It is 12% which is described as base rate +2% or 12% whichever of the two is lower.
What is the updated eligibility criteria for the PMJDY overdraft facility?
According to the updated guidelines of the Department of Financial Services as of September 24 2018, any individual who falls in the age bracket of 18 to 65 years of age can avail of the overdraft facility. Additionally, the overdraft limit has also been raised to Rs. 10,000 according to the revised guidelines.
Is there any specific age criteria?
Any individual who is ten years old or above can avail of this scheme. The exit age for the scheme is 60 years. An individual who is over the age of 60 years is supposed to exit from the scheme.
How do women benefit more from the PMJDY?
There are about 20 crore women who have enrolled in the PMJDY and benefit from the government scheme. The facility of overdraft is given preference to the women any day over men.
During the COVID-19 crisis, the government of India announced a transfer of Rs. 500 per month for three months into the account of women beneficiaries. This gives financial support to women which not only gives them financial freedom to an extent but also uplifts their status in society.
Does the PMJDY affect the national income?
Experts say that such government schemes are a stepping stone towards the upliftment of society and giving financial freedom to a lot of families. The scheme offers access to financial services to the underprivileged section as well.
When the beneficiaries avail credit facilities and banks also provide loan facilities. This in turn gives a rise to production levels which in turn will boost the growth of national income.
The Pradhan Mantri Jan Dhan Yojana is an excellent initiative to boost the growth of national income by ensuring financial services to all. This will indeed reduce the gap between the rich and poor, gradually. Not only does it uplift society as a whole, but it also aims to identify women and ensure their financial security.