Pradhan Mantri Jan Dhan Yojana was announced by the honourable Prime Minister of India Shri. Narendra Modi in the year 2014, on the eve of Independence Day. The scheme aims to tie every Indian in the rural or urban sector to the mainstream banking system. This will aid the financial status of the account holders as well as foster social security goals of the central government. The scheme is run by the Ministry of Finance and holds the Guinness World Record for the highest number of accounts opened in a week anywhere in the world. Over 1,80,96,130 accounts were opened by individuals during the first week of launch of the scheme.
Under the Jan Dhan scheme, any individual who is older than 10 years of age and does not possess a bank account can open one in his or her name with an opening deposit of zero. Accounts under this scheme can be opened with any registered bank or with Business Correspondent Outlet (Bank Mitr) designed specially to facilitate account opening under the Jan Dhan Scheme.
Advantages of Pradhan Mantri Jan Dhan Yojana
Pradhan Mantri Jan Dhan Yojana was launched at a massive scale to bring under the purview of banking all citizens of the country; irrespective of their financial status or regional location. The scheme has seen tremendous enthusiasm among customers from both rural and urban areas. The scheme is a social policy aimed at providing banking facilities to even those who do not have the money to pay for the minimum account balance at the time of account opening. The Jan Dhan Yojana aims at revolutionizing the way banking is done in the country and it aims to help the economically weaker sections of the society to become financially confident. Let us look into some of the most significant benefits that this scheme offers to the citizens of India.
- Loan benefit against Pradhan Mantri Jan Dhan Yojana
Individuals whose Jan Dhan account completes 6 months are eligible to obtain loans of up to Rs.5000. Although the loan amount seems insignificant as compared to that offered as standard loan by various banks, but is quite substantial when we think of the economic status of individuals that this scheme is aimed at uplifting. The Pradhan Mantri Jan Dhan Yojana is aimed at financial inclusion of the economically weaker section of the society. Most importantly it aims to cover people from the rural areas as well as the unorganised sector of the urban and semi-urban areas.
- Mobile Banking with Pradhan Mantri Jan Dhan Yojana
Mobile Banking is not a new innovation anymore. Various private and public banks offer mobile banking facilities to customers. However, keeping in mind the economic status of people below poverty line, Pradhan Mantri Jan Dhan Yojana aims to make available certain basic financial transactions via ordinary mobile phones and not smart phones. This step will ensure that even people from rural areas and those from the unorganized sector have access to quick and convenient banking options. The idea behind this feature is to innovate as much as possible to ensure financial inclusion as well as financial security to as many Indians as possible.
- Insurance benefits under the Pradhan Mantri Jan Dhan Yojana
The best and the most significant benefit of Pradhan Mantri Jan Dhan Yojana is that it brings under the purview of insurance, a lot of people who could not have availed insurance out of their own pocket. The scheme offers a life cover of Rs.30,000 to customers who comply with certain norms of the scheme and offers Rs.2,00,000 as insurance sum in the event of death due to accident.
Apart from the above listed standard benefits of the scheme, the Yojana also offers the following macro level benefits for the entire nation to progress.
- An account for each family which ensures they have a savings account to put away their savings into.
- Each family gets a RuPay debit card along with the Jan Dhan bank account. This ensures easy withdrawal of money from ATMs.
- The Jan Dhan Yojana account is a zero balance account and as such account holders are not required to maintain a minimum balance in their accounts.
- Pradhan mantri Jan Dhan Yojana brings under the purview of insurance a lot of people who cannot afford insurance out of their own pocket. Insurance coverage for all means higher value being attached to lives of citizens.
- An overdraft facility of Rs.5000 will be offered with Pradhan Mantri Jan Dhan account. In case the overdraft availed is paid back promptly, the bank may increase this limit to Rs.15,000. This however, is solely based on the discretion of the bank in question.
- Pradhan Mantri Jan Dhan Yojana is an aadhar linked scheme so as to avoid fraud related to account opening.
- Interest similar to that offered by various public and private banks on their savings accounts will apply to Pradhan Mantri Jan Dhan accounts too. Hence, individuals get to earn interest on the amount that they deposit and save in their Jan Dhan accounts.
- Pradhan Mantri Jan Dhan account can be used to transfer money to and from various other public and private banks in the country.
- Account transfer for Pradhan Mantri Jan Dhan Yojana can be done from one bank in the country to another. This is possible since all participating banks are connected via the core banking solution or CBS.
- Pradhan Mantri Jan Dhan Yojana might prove instrumental in reducing the dependency of farmers on local money lenders. This is one of the topmost reasons for farmers getting stuck in a vicious circle of debt. Loan and overdraft facility linked with this account will allow farmers to avoid borrowing from small money lenders who have no formal account keeping processes and as such indulge in fraudulent transactions to extract more payment from borrowers.
- Under the Pradhan Mantri jan Dhan Yojana, at the time of account opening, customers will be handed over a kit that includes account passbook, cheque book as well as a financial literacy guide. However, the contents of this kit too might differ from one bank to another.