Pradhan Mantri Jan-Dhan Yojana (PMJDY) | UPSC

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Pradhan Mantri Jan-Dhan Yojana (PMJDY) | UPSC


National Mission for Financial Inclusion, completes six years of successful implementation

      WHY IN NEWS:

PMJDY has been the foundation stone for the Modi government’s people-centric economic initiatives –Finance Minister

MINISTRY? :-Ministry of Finance


For PRELIMS this is important scheme . Go through each bit of it . Aim ,significance , beneficiaries and also the timeline.

For MAINS can you recall ten challenges of this scheme ?


More than 40.35 crore beneficiaries banked under PMJDY since inception, amounting to Rs. 1.31 lakh crore


  • Ministry of Finance is committed to provide financial inclusiveness and support to the marginalized and hitherto socio-economically neglected classes.

Financial Inclusion is a national priority of the Government as it is an enabler for inclusive growth. 

  • It is important as it provides an avenue to the poor for bringing their savings into the formal financial system.
  • This also allows to remit money to their families in villages besides taking them out of the clutches of the usurious money lenders.
  • A key initiative towards this commitment is the Pradhan Mantri Jan Dhan Yojna (PMJDY), which is one of the biggest financial inclusion initiatives in the world.


Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion

  • This is to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.


  • PMJDY was announced by Prime Minister, Shri Narendra Modi in his Independence Day address on 15th August 2014.

Prime Minister had described the occasion as a festival to celebrate the liberation of the poor from a vicious cycle. 

  • PMJDY has brought the unbanked into the banking system, expanded the financial architecture of India and brought financial inclusion to over 40 crore account holders.


Ensure access of financial products & services at an affordable cost.

  • Use of technology to lower cost & widen reach.


  • 63.6% Rural PMJDY accounts; 55.2%Women PMJDY accounts.
  • Under PM Garib Kalyan Yojana, a total of Rs. 30,705 crore have been credited in accounts of women PMJDY account holders during April-June, 2020.
  • About 8 crore PMJDY accountholders receive Direct Benefit Transfer (DBT) from the Government under various schemes.
  • In Aug’20, out of total 40.35 crore PMJDY accounts, 34.81 crore (86.3%) are operative.


The scheme was launched based upon the following 6 pillars:

  • Universal access to banking services  – Branch and BC

Basic savings bank accounts with overdraft facility of Rs. 10,000/- to every household 

  • Financial Literacy Program– Promoting savings, use of ATMs, getting ready for credit, availing insurance and pensions, using basic mobile phones for banking
  • Creation of Credit Guarantee Fund – To provide banks some guarantee against defaults
  • Insurance – Accident cover up to Rs. 1,00,000 and life cover of   Rs. 30,000 on account opened between 15 Aug 2014 to 31 January 2015
  • Pension scheme for Unorganized sector



  • 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.


  • Accounts opened are online accounts in core banking system of banks, in place of earlier method of offline accounts opening with technology lock-in with the vendor

Inter-operability through RuPay debit card or Aadhaar enabled Payment System (AePS)

  • Fixed-point Business Correspondents
  • Simplified KYC / e-KYC in place of cumbersome KYC formalities.


  • DBT TRANSACTIONS: As informed by banks, about 8 crore PMJDY accountholders receive direct benefit transfer (DBT) .
  • RUPAY CARD INSURANCE – Free accidental insurance cover on RuPay cards increased from Rs. 1 lakh to Rs. 2 lakh for PMJDY accounts opened after 28.8.2018.
  • WOMEN EMPOWERMENT : A majority of the beneficiaries are women and most of the accounts are from rural India.


  • MULTIPLE ACCOUNTS : People may open multiple accounts using different ID proofs on the lure of getting insurance covers.
  • CENTRALISATION : All banks must have a centralised information sharing system so that this loophole can be countered.

ZERO BALANCE ACCOUNT : Even if it is a zero balance account, credibility of the account holder has to be checked. 

  • DIGITAL LITERACY : The financial literacy centre is to be held by the banker so as to keep customer aware of the services available.

      IASbhai WINDUP: 

Endeavour to ensure coverage of PMJDY account holders under micro insurance schemes.

  • Eligible PMJDY accountholders will be sought to be covered under PMJJBY and PMSBY.
  • Promotion of digital payments including RuPay debit card usage amongst PMJDY accountholders through creation of acceptance infrastructure across India
  • Improving access of PMJDY account holders to Micro-credit and micro investment such as flexi-recurring deposit etc.
  • Average Deposit per PMJDY per account is Rs. 3239.


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