Pradhanmantri Jan Dhan Yojana (PMJDY) : Prime Minister Narendra Modi on 28 August 2014 launched the ambitious Pradhan Mantri Jan Dhan Yojana (PMJDY). It is a dream project of NDA govt. to open at least one bank account to every household. Following are the salient features of PMJDY…
The main objective of PMJDY :
- The PMJDY has been conceived as a national mission on financial inclusion with the objective of covering all households in the country with banking facilities and having a bank account for each household.
- The scheme, pushed by the government in a mission mode, seeks to provide two accounts to 7.5 crore identified households by August 2018.
- PMJDY lies at the core of Prime Minister Narendra Modi-led government’s development philosophy of Sab Ka Sath Sab Ka Vikas.
Main features of PMJDY :
- The first phase of the mission, which started on 28 August 2014, would end in August next year.
- The second phase will start from 2015 till 2018, covering aspects such as micro insurance and pension schemes like ‘Swavalamban’.
- Rs. 5,000 overdraft facility for Aadhar-linked accounts
- RuPay Debit Card with inbuilt Rs 1 lakh accident insurance cover (In an incentive to early account openers and to make the scheme a success , the government has doubled the insurance cover from Rs 1 Lakh to Rs 2 Lakh if the bank account is opened within the first 100 days of the launch of PMJDY)
- The National Payments Corporation of India (NCPI) has tied up with HDFC Ergo to provide the 1 Lakh initial cover while the additional 1 Lakh cover would be provided by the four state owned general insurers New India Assurance, National Insurance, United India Insurance and Oriental Insurance Company.
- Minimum monthly remuneration of Rs 5,000 to business correspondents who will provide the last link between the account holders and the bank.
How PMJDY is different from other such schemes launched by previous UPA Govt.?
- The earlier scheme had no focus on households and no emphasis was given on urban financial inclusion, according to some experts. Besides, they maintained that there was a cumbersome Know Your Customer (KYC) formality, restricting account opening.
- Other deficiencies cited included lack of credit disbursement and 47% of business correspondents being untraceable, resulting in inactive accounts. The new scheme has tried to address all the possible deficiencies and its monitoring would be done at state and district levels.
What could be a major drawback associated with PMJDY?
Some experts fear that all the hype surrounding the scheme will attract fly by night operators who already have a Savings Account but will open a new bank account with an eye on availing the overdraft of Rs 5000. Once they avail the overdraft many of them might cease to operate the bank accounts adding to the large number of inactive no-frills savings accounts opened during the previous government’s financial inclusion drive.
