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Jan Dhan Yojana

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  • Last Updated : 16 Jun, 2022
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Honourable Prime Minister Mr Narendra Modi’s ambitious initiative to build India through revenue collection is known as the Jan Dhan Yojana. On the 28th of August 28, 2014, Narendra Modi launched Pradhan Mantri Jan-Dhan Yojana (PMJDY). It is a major effort of the NDA administration to create at least one bank account for every family. It is a national mission to provide cheap access to a variety of financial services such as remittance, credit, insurance, pensions, and banking savings and deposit accounts. Furthermore, it was expected by the cabinet ministry that this excellent plan would benefit the country. It ensures that everyone has access to financial services.  

Efforts to make financial goods and services available and cheap to all individuals, especially disadvantaged and low-income communities, regardless of their net worth are referred to as financial inclusion. Financial inclusion aims to break down the obstacles that prevent individuals from engaging in the financial industry and benefiting from its services. It’s also known as “inclusive finance.

This plan was officially introduced by Prime Minister Narendra Modi during his Independence Day speech on August 15, 2014. It also assures that every family in India has access to financial literacy and at least one basic banking account.

Benefits of Jan Dhan Yojana:

  1. This plan does not demand a minimum amount to start an account. The recipient can open an account with no balance at any bank branch or Business Correspondent outlet. 
  2. The initiative encompasses both urban and rural communities and gives each account user with an indigenous Debit Card (Ru Pay card).
  3. It guarantees that customers have access to the Core Banking System (CBS) as well as mobile banking through USSD. A call center and a toll-free number are accessible across the country
  4. One of the key benefits offered by this plan is an Rs.5,000 overdraft ability for Aadhar-linked accounts, as well as a RuPay debit card with an integrated Rs.1 lakh accidental insurance cover.
  5. Life Insurance cover of Rupees 30,000 is granted to eligible beneficiaries for accounts created between August 15, 2014, and January 26, 2015. 

Implementation of Jan Dhan Yojana:

Phase 1: 

It lasted from the 15th of August 2014 to the 14th of August 2015. During this time, the PMJDY plan was introduced with the goal of providing universal banking access to all home families across the country, with at least one basic banking account and a RuPay Debit Card with Rs. 1 lakh accident insurance built inferred offered the communities a financial literacy program. During this time, it was also suggested that the Kisan Credit Card be issued.

Phase 2:

It lasted from the 15th of  August 2015 to the 14th of August  2018. Through Business Correspondents, it sought to provide individual sure insurance and programs like Swavalamban Scheme disorganized sector.

Phase 3:

This was after August 14, 2018. PMJDY focuses on creating accounts for every household with a current Overdraft (OD) limit of Rs. 5,000 to be enhanced to Rs. 10,000 after August 14, 2018. There were no restrictions on OD up to Rs. 2,000. The age limit for using the OD facility has been changed from 18-60 to 18-65. The amount of accidental insurance available to new RuPay cardholders has been increased from Rs.1 lakh to Rs.2 lakh if the accounts were started after 28.8.18 under this enhanced coverage.

Achievements under Pradhan Mantri Jan-Dhan Yojana:

  • In comparison to other UPA-era programs, PMJDY is a more effective plan. According to experts, the previous system did not prioritize families or urban financial inclusion. They claimed that account opening was restricted due to a lengthy Know Your Customer (KYC) procedure. The government will be able to repay people’s money through the Jan-Dhan Yojana plan. The scheme’s major goal is to achieve ‘Mera Khata Bhagyavidhata,’ meaning my account is divine.’
  • There are 40.35 crore PMJDY accounts (as of August 19, 2020); rural PMJDY accounts for 63.6%, while women PMJDY accounts for 55.2%. Out of a total of 40.35 crores, there are 34.81 crores (86.3%) of active PMJDY accounts. The total amount of money in PMJDY Accounts is Rs. 1.31 lakh crore.
  • In the first year of the initiative, 17.90 crore PMJDY accounts were created.
  • Deposits grew by 5.7 times between 2015 and 2020, while accounts increased by 2.3 times. The Jan Dhan Darshak App is a citizen-centric tool for identifying banking touchpoints including bank branches, ATMs, Bank Mitras, Post Offices, and other financial institutions.

Documents Essential for Creating an Account:

  • Address evidence, either current or permanent, is required for account opening. If a person’s address changes, a new address proof must be sent to the bank. 
  • You may learn more about the RBI’s latest changes to the know your customer (KYC) rules. 
  • Even if you don’t have any legitimate documents, you can still create an account by submitting self-attested pictures and signing/thumb printing in front of a bank employee. A small Account is a name given to such an account. More information may be found here. This little account, however, would be active for only one year after the person provided formal valid documentation such as a Passport, driver’s license, PAN card, voter identification card, Aadhar Card, or ration card, as well as two passport-size pictures.

Finally, the Pradhan Mantri Jan Dhan Yojana was created to help individuals in India, particularly the impoverished, by providing them with a bank account, credit facility, insurance coverage, and debit card. In the long run, the program will allow the poorer portions of the population to access subsidies and overdraft facilities via their bank accounts, therefore eliminating moneylenders, commission agents, and corruption. This initiative, according to Prime Minister Modi, would increase everyone’s trust. The Jan Dhan Yojna would boost the economy by creating records and bank accounts. The Jan Dhan Yojna will put an end to monetary opacity.

Frequently Asked Questions with Answers:

1. What is Financial Inclusion, and what is the need for it?

Financial inclusion refers to efforts to make financial goods and services accessible and affordable to all people, particularly those from disadvantaged and low-income areas, regardless of their net worth. The goal of financial inclusion is to remove the barriers that hinder people from participating in the financial industry and benefiting from its services. This is necessary for a developing country like India. It enables people to know the financial services provided. It eases the transfer of benefits from the government like subsidies and pensions to the people transparently. 

2. How does Pradhan Mantri Jan-Dhan Yojana help achieve financial inclusion?

Having a bank account allows people to learn about the advantages of money. It was previously unattainable for many, particularly those from disadvantaged and low-income neighborhoods, but with PMJDY, individuals were able to create accounts with no balance and take advantage of its perks. The circulation of physical currency has decreased since demonetization. Everybody from street vendors to small company owners now accepts online payments, which was only to be possible through PMDJY.

3. What are the benefits of Pradhan Mantri Jan-Dhan Yojana?

It provides each account holder with a local Debit Card. To open an account, there is no minimum deposit. It ensures consumers have access to both the Core Banking System (CBS) and mobile banking through USSD. An Rs.5,000 overdraft facility for Aadhar-linked accounts, as well as a RuPay debit card with an integrated Rs.1 lakh accidental insurance cover, are two of the plan’s primary features. For accounts opened between August 15, 2014, and January 26, 2015, eligible recipients would receive a Rupees 30,000 life insurance policy.

4. What is the criticism faced by Pradhan Mantri Jan-Dhan Yojana?

PMDJY, like any other new scheme, was met with some criticism for its flaws. Political supporters and critics agreed that the goal of creating additional accounts was achieved, but not to the extent that it was touted since research revealed that 75% of Jan Dhan account holders already have a bank account. The absence of infrastructure and financial networks in rural regions was a hindrance to the scheme’s efficient implementation. It was also criticized for putting an unfair burden on public-sector banks.

5. Discuss the Achievement of Pradhan Mantri Jan-Dhan Yojana.

PMDJY was a full-fledged government initiative that prioritized and promoted financial inclusion in the country. As of August 19, 2020, there are 40.35 crore PMJDY accounts, with rural PMJDY accounting for 63.6 percent and women PMJDY accounting for 55.2 percent. There are 34.81 crores (86.3%) active PMJDY accounts out of a total of 40.35 crores. PMJDY accounts have a total balance of Rs. 1.31 lakh crore. The process of properly delivering all government subsidies, pensions, and other benefits to the people is now done in a highly transparent manner, without the need for middlemen or corruption.


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