What is the Pradhan Mantri Jan Dhan Yojana?

By Sunil Fernandes
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     What is the Pradhan Mantri Jan Dhan Yojana?
    The Pradhan Mantri Jan Dhan Yojana is am ambitious scheme that will provide a host of benefits including a bank account, insurance and a debit card for all.

    Prime Minister, Narendra Modi had announced the scheme on Independence Day in his address to the nation. Many government owned banking entities have geared up to ensure that the targets set by the government are achieved.

    The scheme is aimed at opening 1 crore bank accounts on the first day of its launch. The state leaders in turn would launch the scheme in their respective states.

    Prime Minister, Narendra Modi himself has taken initiative to ensure the success of the scheme. He has already sent 7.25 lac emails to bank officers informing them about the Pradhan Mantri Jan Dhan Yojana Scheme.

    Public sector banks, according to an official release, will organise more than 60,000 camps in rural and urban areas on the launch day. The scheme seeks to provide two accounts to 7.5 crore identified households by August 2018.

    IDBI Bank has said that it plans to open as many as 2 lakh basic savings accounts under the Pradhan Mantri Jan Dhan Yojana.

    "IDBI Bank has decided to be an active participant of the scheme to support financial literacy and mobilise Basic Savings Bank Deposit Accounts (BSBDAs)," the bank said.

    The plan will provide individuals with a RuPay debit card which carries free accidental insurance cover of Rs one1 lakh. According to news reports the personal accident insurance cover would be enhanced to Rs 2 lakhs per year. This is likely to provide some cover especially to marginalized sections of society in the unfortunate event of death of the earning member due to an accident.

    Further, overdraft of Rs 2,000 would be provided by banks to each account holder after satisfactory operation in the account for six months.

    Details of the scheme

    The scheme is aimed at providing bank accounts, insurance cover and a debit card to all the citizens of the country. The aim is not ambitious at all considering the huge network of branches that some of the government owned banks in the country have. In three years the scheme aims to provide 7.5 crore households with formal banking.

    Financial literacy has been accorded priority under the scheme. A standardized financial literacy material has also been prepared in vernacular languages to create awareness about the Yojana.

    Analysts say it is a scheme of the UPA

    Analysts say that the scheme is nothing, but "old wine in a new bottle." They say it is a modified version of the scheme of the previous UPA government. The only difference is that we are seeing a greater push at the moment for the scheme through a lot of publicity and efforts.

    Highlights of the scheme:

    1) Scheme to be launched on Aug 28, 2014.

    2) Universal access to banking facilities for all households across the country through a bank branch or a fixed point Business Correspondent (BC) within a reasonable distance

    3) To cover all households with atleast one  Basic Banking Accounts with RuPay Debit card having inbuilt accident insurance cover of Rs.1 lakh. Further an overdraft facility upto Rs 5000 will also be permitted to Adhaar enabled accounts after satisfactory operation in the account for 6 months.

    4) Financial literacy programme which aims to take financial literacy upto village level.

    5) The Mission also envisages expansion of Direct Benefit Transfer under various Government Schemes through bank accounts of the beneficiaries of.

     6) The issuance of Kisan Credit Card (KCC) as RuPay Kisan Card is also proposed to be covered under the plan.

    The major shift in this programme is that households are being targeted instead of villages as targeted earlier. Moreover both rural and urban areas are being covered this time as against only rural areas targeted earlier. The present plan pursues digital financial inclusion with special emphasis on monitoring by a Mission headed by the Finance Minister.


    It's not an impossible target to cover 7.5 crore households in a matter of three years. The government would have to keep publicising the scheme, which could do well. The role of public sector banks are expected to be crucial in pushing the scheme, especially the country's largest bank, State Bank of India. This is because the reach of these banks is enormous by any stretch of imagination.


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