PM Jan Dhan Yojana (PMJDY) is a national programme that was introduced by the Government of India, under the leadership of Narendra Modi ji, to ensure that every person without a bank account in India has financial inclusion. It is the flagship project of Modiji’s government which is solely dedicated towards financial inclusion. 

In the following paragraphs, I will take a look at the salient features of the scheme as well the impact of the scheme in empowering the poor and strengthening the Indian economy.

Salient features of PMJDY

The scheme was launched in August 2014. The objective of the scheme was to offer convenient access to financial facilities such as savings & checking funds, loans, credit, benefits, and pensions. As per the data from the Ministry of Finance, around four crore bank accounts were opened before September 2014 under this scheme. 

This scheme enables an individual to open an account at a bank branch or a business correspondent (Bank Mitr). In addition, an individual can also open a zero balance under PMJDY. In the event, the account holder needs a check book; she or he should meet the minimum balance requirements as well. A RuPay debit card can be issued to the account holders of this scheme which can be used for cash withdrawal across all ATMs.

PMJDY offers unique benefits to those who are not financially empowered. The account holders under this scheme receive an accidental insurance cover of Rs 1 lakh and a life cover of Rs 30,000 (to be paid on the death of the beneficiary. The accident insurance cover will be Rs 2 lakh for new accounts opened after August 28, 2018.  Beneficiaries under this scheme are also eligible for an overdraft facility up to Rs 5,000 per household. Those under the scheme who are eligible for receiving other government benefits can make use of the Direct Benefit Transfer offered by PMJDY. 

How PMJDY has crafted a new growth story for India

As per the latest data made available by the Ministry of Finance, there are 34.14 account holders of PMJDY at present, which in itself is a testimony to the success of the scheme. As of October 2019, the total deposits in the PMJDY accounts are Rs 104893 crore which is truly commendable. In 2017, a paper by Manuela Günther from the Overseas Development Institute noted that PMJDY has been instrumental in making women, low-income individuals, rural residents, and the less educated members of the society financially empowered by providing greater account ownership under PMJDY.  

At present, out of the accounts opened, 60% are in rural areas and 40% are in urban areas, and the share of female account holders is about 51%. I feel that while previous governments have taken steps to increase financial inclusivity and empowerment of the citizens, the results delivered by PMJDY have been astounding. 

The success of PMJDY lies in providing giving lower income households better access to investments as 13.5 crore beneficiaries enrolled in low-cost accident insurance products and 5.5 crore beneficiaries signed up for life cover The scheme also enabled 27.7 crore account holders to be a proud owner of the RuPay debit card which has made cashless transactions possible even for those who come from economically disadvantaged backgrounds.

In fact, PMJDY created history right from the start. Guinness World Records recognised PMJDY to be a scheme where “Most bank accounts were opened in one week as part of the Financial Inclusion Campaign”. 18,096,130 accounts were opened between 23 to 29 August, 2014. 

I think one can say without a doubt that the other than giving financial empowerment to several sections of the society, PMJDY has been singularly successful in reducing the informal system of money lending. As per a 2017 working paper by Sumit Agarwal, who is a professor at Georgetown University and studied the account activity in 1.5 million PMJDY accounts from August 2014 to May 2015, there was a boost in lending in regions where the PMJDY generated new demand for formal credit. The unique efforts of PMJDY have been successful in injecting the Indian economy with a new lease of life. 

The slogan of PMJDY is “Mera Khatha, Bhagya Vidhata” and I am extremely happy to note that the scheme has truly enabled a large section of our country to hold their head high up with confidence and access financial services just as other privileged citizens of the country. My heartiest congratulations to Modiji and his entire cabinet on making a common man’s dream come true.