Jan Dhan Yojana: Financial Inclusion and Empowerment for the Underprivileged

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Introduction

Jan Dhan Yojana is a financial inclusion scheme launched by the Indian Government on August 28, 2014. The scheme aims to provide banking services to the underprivileged section of the society, such as the rural poor, women, and minorities who are deprived of basic banking facilities.

Under the PMJDY scheme, every household in the country is eligible to open a bank account with zero balance. The scheme also provides RuPay debit cards to account holders, which can be used to withdraw cash and make transactions at ATMs, merchant establishments, and e-commerce websites.

The PMJDY scheme has been successful in bringing financial inclusion to a large number of households in the country. As of August 2021, more than 43 crore PMJDY accounts have been opened, with a total balance of over Rs. 1.49 lakh crore. The scheme has also helped in reducing the number of unbanked and underbanked households in the country.

The scheme is considered one of the world’s largest financial inclusion schemes and has played a significant role in bringing the unbanked population of India into the formal banking system.

Benefits of Jan Dhan Yojana

Financial Inclusion

pmjdy financial inclusion

Financial Inclusion refers to the availability of financial services to all individuals, particularly to those who are excluded from the formal financial system. The goal of financial inclusion is to ensure that all individuals, regardless of their economic status, have access to financial products and services, such as savings accounts, credit facilities, insurance, and other financial instruments.

Empowerment of the Poor

By providing access to formal financial services, the scheme aims to empower the poor and vulnerable sections of society and enable them to become financially independent.

Empowerment of the poor refers to the process of enabling and equipping the poor with the necessary skills, resources, and opportunities to improve their social, economic, and political status. It involves addressing the root causes of poverty and creating a conducive environment that enables the poor to realize their full potential.

Direct Benefit Transfer

Direct Benefit Transfer (DBT) is a scheme launched by the Government of India to transfer subsidies and welfare payments directly to the bank accounts of beneficiaries. It is a digital payment system that eliminates intermediaries and ensures that benefits reach the intended beneficiaries in a timely and efficient manner.

DBT was launched in 2013 with the aim of reducing leakages and eliminating ghost beneficiaries in government welfare schemes. Under the scheme, the government transfers subsidies and other welfare payments directly to the bank accounts of beneficiaries, who are identified through Aadhaar and other identification mechanisms.

Micro-Insurance

Micro-insurance is a type of insurance that provides protection and coverage to low-income households or individuals who cannot afford traditional insurance policies. It is designed to meet the insurance needs of the poor and vulnerable, including those in rural areas, small business owners, and informal sector workers.

Micro-insurance policies are tailored to the specific needs of low-income clients, providing coverage for risks such as illness, injury, death, theft, and crop failure. The policies are typically low-cost and have simple terms and conditions that are easy to understand.

Overdraft Facility

An overdraft facility is a financial service provided by banks and other financial institutions that allows their customers to withdraw more money than they have in their account up to a pre-approved limit. Essentially, an overdraft is a type of loan, and the facility allows account holders to access a short-term credit line.

The amount of the overdraft limit is determined by the bank or financial institution based on the creditworthiness of the account holder. Overdrafts can be secured or unsecured, and the interest rate charged on the overdraft amount is typically higher than the interest charged on normal bank account balances.

Financial Literacy

Financial literacy refers to the knowledge and skills required to make informed and effective decisions about financial matters. It involves understanding financial concepts, such as budgeting, saving, investing, and managing debt, as well as the ability to apply this knowledge in everyday life.

Having a good level of financial literacy is important for individuals to be able to manage their personal finances effectively and make sound financial decisions. It can also help individuals to plan for their future, achieve financial goals, and build wealth over time.

Insurance Coverage

The account holders are eligible for an accidental insurance cover of Rs. 2 lakh and life insurance cover of Rs. 30,000. PMJDY provides a life insurance cover of Rs. 30,000 to the account holder in case of the account holder’s death due to any reason. The account holder must have opened the account before the age of 60 years and must have made at least one transaction in the last 90 days to be eligible for the insurance.

PMJDY also provides an accidental insurance cover of Rs. 2 lakhs to the account holder in case of accidental death or permanent disability due to an accident. The account holder must have opened the account before the age of 70 years and must have made at least one transaction in the last 90 days to be eligible for the insurance.

Easy Access to Credit

The account holders can avail themselves of various credit facilities, such as loans, overdrafts, etc., from the bank.

Eligibility Criteria Of Jan Dhan Yojana

Age

Any individual who is above the age of 10 years can open a Jan Dhan account.

Identification

The applicant must have a valid identity proof, such as Aadhaar card, Voter ID card, or any other valid government-issued document.

Address Proof

The applicant must have a valid address proof, such as a utility bill, bank statement, or any other valid government-issued document.

No Existing Bank Account

The applicant must not have an existing bank account in any other bank.

No Minimum Balance Requirement

There is no minimum balance requirement for opening a Jan Dhan account.

The Jan Dhan Yojana scheme has been successful in promoting financial inclusion in the country and has enabled millions of underprivileged people to access basic banking facilities.

How to Apply Pradhan Mantri Jan Dhan Yojana

You Can Follow These Steps:

Step 1: Locate the nearest bank or post office The first step is to find out the nearest bank or post office that is offering the PMJDY scheme. You can visit the official PMJDY website to check the list of banks and post offices that offer the scheme.

Step 2: Gather the necessary documents You will need to provide certain documents to open a PMJDY account.

These include a proof of identity (such as Aadhaar card, PAN card, voter ID, passport, etc.), proof of address (such as Aadhaar card, voter ID, passport, etc.), and a passport-sized photograph. It is advisable to check with the bank or post office about the specific documents required.

Step 3: Visit the bank or post office Visit the bank or post office with the required documents. Meet the bank executive or post office official and express your interest in opening a PMJDY account.

Step 4: Fill the account opening form The bank executive or post office official will provide you with an account opening form. Fill up the form with your personal details such as name, address, date of birth, occupation, etc.

Step 5: Submit the documents Attach the necessary documents such as proof of identity, proof of address, and passport-sized photograph to the form.

Step 6: Provide your Aadhaar number Provide your Aadhaar number. If you do not have an Aadhaar number, you can provide any other government-issued identity proof.

Step 7: Collect your RuPay debit card Once the account is opened, you will receive a RuPay debit card. You can use this card to withdraw money from ATMs, make purchases, and avail other services.

Step 8: Register for mobile banking and internet banking (optional) Many banks offer mobile banking and internet banking services for PMJDY account holders. You can register for these services by visiting the bank’s website or mobile app.

It is important to note that PMJDY accounts are zero-balance accounts, which means that there is no minimum balance requirement. Also, there are no charges for account opening, maintenance, and other services. PMJDY accounts also come with various benefits such as overdraft facility, life insurance cover, and accidental insurance cover.

What is the Jan Dhan Yojana?

he Jan Dhan Yojana is a financial inclusion program launched by the Indian government in August 2014. The scheme aims to provide every household with access to basic banking services such as savings accounts, credit facilities, and insurance.

How many accounts have been opened under the scheme?

As of March 2021, over 43 crore (430 million) accounts have been opened under the scheme, with deposits amounting to over Rs. 1.4 lakh crore

What are the benefits of the scheme?

The scheme has numerous benefits for the underprivileged, such as financial inclusion, empowerment, and access to various government schemes and subsidies. It has also reduced the dependence on informal channels of credit and brought transparency to the financial system.

Apna Samaaj

Our mission at Apna Samaaj is to connect underprivileged communities in India with the resources and opportunities they need to thrive. We aim to create a comprehensive platform that provides access to welfare schemes from government bodies and NGOs, as well as private organizations, helping to bridge the gap between those in need and those who can provide support. Through our efforts, we strive to empower individuals and communities, drive economic growth, and make a positive impact on society.