In a country like India where a significant portion of the population lives below the poverty line, financial inclusion has always been a challenge. A large number of people, especially those living in rural areas, do not have access to basic banking services. In order to address this issue, the Government of India launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) in 2014. The scheme has been successful in achieving its objectives of financial inclusion and empowerment of the poor.
What is Pradhan Mantri Jan Dhan Yojana?
PMJDY is a national mission for financial inclusion launched by the Government of India in August 2014. The objective of the scheme is to ensure access to financial services, such as banking savings & deposit accounts, remittance, credit, insurance, and pension to the underprivileged sections of the society. The scheme primarily targets the unbanked households in the country.
Key Features of PMJDY
The scheme has several key features that make it unique and effective:
Zero balance accounts
One of the most significant features of PMJDY is that it offers zero balance accounts. This means that a person can open a bank account without having to maintain a minimum balance. This makes it easier for the poor to open and maintain bank accounts.
Overdraft facility
Under PMJDY, account holders can also avail of an overdraft facility of up to Rs. 10,000. This is subject to certain conditions, such as the length of the account and the credit history of the account holder.
Rupay debit card
Every PMJDY account holder is provided with a Rupay debit card, which can be used for transactions across ATMs, micro-ATMs, and point of sale (POS) machines.
Insurance cover
PMJDY account holders are provided with an accidental insurance cover of up to Rs. 2 lakh and a life insurance cover of Rs. 30,000.
Achievements of PMJDY
The PMJDY scheme has been successful in achieving its objectives of financial inclusion and empowerment of the poor. As of March 2021, over 43 crore bank accounts have been opened under the scheme, with a total balance of over Rs. 1.37 lakh crore. The scheme has also enabled direct benefit transfer (DBT) of various government schemes to the beneficiaries’ bank accounts, eliminating leakages and ensuring timely delivery of benefits.
Impact of PMJDY
The PMJDY scheme has had a significant impact on the lives of the poor and marginalized sections of the society. It has helped them to:
Access formal banking services
The scheme has enabled the poor to access formal banking services, which were previously out of their reach. This has facilitated cashless transactions and reduced their dependence on informal sources of credit.
Avail of government benefits
PMJDY has enabled the government to transfer various welfare benefits directly to the bank accounts of the beneficiaries. This has eliminated leakages and ensured that the benefits reach the intended beneficiaries.
Encourage savings
By offering zero balance accounts and insurance covers, PMJDY has encouraged the poor to save money and become financially independent.
Challenges Faced by PMJDY
Although PMJDY has been successful in achieving its objectives, it faces several challenges, such as:
Low usage of accounts
Many PMJDY account holders do not use their accounts regularly. This could be due to a lack of awareness, inadequate banking infrastructure in rural areas, or a lack of trust in the banking system.
Over-reliance on cash
Despite the availability of banking services, many people in rural areas still prefer to use cash for their transactions. This could be due to a lack of awareness about digital payment options, inadequate banking infrastructure, or a lack of trust in the banking system.
Lack of financial literacy
Many PMJDY account holders lack financial literacy and do not understand the benefits of formal banking services. This could hinder their ability to use these services effectively.
Future of PMJDY
The PMJDY scheme has laid the foundation for financial inclusion in India. However, there is still a long way to go to ensure that every person in the country has access to formal banking services. The government has taken several steps to address the challenges faced by PMJDY, such as increasing awareness about digital payment options, improving banking infrastructure in rural areas, and promoting financial literacy among the poor.
Conclusion
The Pradhan Mantri Jan Dhan Yojana is a landmark initiative by the Government of India to promote financial inclusion and empower the poor. The scheme has been successful in achieving its objectives of providing access to formal banking services to the underprivileged sections of the society. However, there are still challenges that need to be addressed to ensure that the benefits of the scheme reach every person in the country.
FAQs
- Who is eligible to open a bank account under PMJDY? Ans: Any person above the age of 10 years who does not have a bank account can open an account under PMJDY.
- What is the maximum overdraft facility available under PMJDY? Ans: The maximum overdraft facility available under PMJDY is Rs. 10,000.
- Is there any minimum balance requirement for PMJDY accounts? Ans: No, there is no minimum balance requirement for PMJDY accounts.
- How has PMJDY impacted the lives of the poor? Ans: PMJDY has enabled the poor to access formal banking services, avail of government benefits, and encourage savings.
- What are the challenges faced by PMJDY? Ans: The challenges faced by PMJDY include low usage of accounts, over-reliance on cash, and lack of financial literacy.