Pradhan Mantri Jan-Dhan Yojana (PMJDY)

Overview: Pradhan Mantri Jan-Dhan Yojana

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.

Account can be opened in any bank branch or Business Correspondent (Bank Mitr) outlet. PMJDY accounts are being opened with Zero balance. However, if the account-holder wishes to get cheque book, he/she will have to fulfill minimum balance criteria.

Documents required to open an account under Pradhan Mantri Jan-Dhan Yojana

1. If Aadhaar Card/Aadhaar Number is available then no other documents is required. If address has changed, then a self certification of current address is sufficient.
2. If Aadhaar Card is not available, then any one of the following Officially Valid Documents (OVD) is required: Voter ID Card, Driving License, PAN Card, Passport & NREGA Card. If these documents also contain your address, it can serve both as “Proof of Identity and Address”.
3. If a person does not have any of the “officially valid documents” mentioned above, but it is categorized as ‘low risk’ by the banks, then he/she can open a bank account by submitting any one of the following documents:
   1. Identity Card with applicant’s photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks and Public Financial Institutions;
   2. Letter issued by a gazette officer, with a duly attested photograph of the person.

Special Benefits under PMJDY Scheme

1. Interest on deposit.
2. Accidental insurance cover of Rs.1.00 lac
3. No minimum balance required.
4. Life insurance cover of Rs.30,000/-
5. Easy Transfer of money across India
6. Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts.
7. After satisfactory operation of the account for 6 months, an overdraft facility will be permitted
8. Access to Pension, insurance products.
9. Accidental Insurance Cover, RuPay Debit Card must be used at least once in 45 days.
10. Overdraft facility upto Rs.5000/- is available in only one account per household, preferably lady of the household.

Frequently Ask Questions (FAQs)

Q1. What is Pradhan Mantri Jan-Dhan Yojana?

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.

Q2. How is PMJDY different from the earlier Financial Inclusion Plan (Swabhimaan)?

PMJDY focuses on coverage of households as against the earlier plan which focused on coverage of villages. It focuses on coverage of rural as well as urban areas. Earlier plan targeted only villages above 2000 population while under PMJDY whole country is to be covered by extending banking facilities in each Sub-Service area consisting of 1000 – 1500 households such that facility is available to all within a reasonable distance, say about 5 Km.

Q3. Whether Joint account can be opened in Pradhan Mantri Jan-Dhan Yojana?

Yes, joint account can be opened.

Q4. Under this Scheme, where can I open an account?

Account can be opened in any bank branch or Business Correspondent (Bank Mitr) outlet.

Q5. What is BSBDA Account ?

• Basic Savings Bank Deposit Account (BSBDA) has been defined by RBI vide its circular dated 10.08.2012. Its salient features are:
• There is no requirement of minimum balance.
• The services available include deposit and withdrawal of cash at bank branch as well as ATMs; receipt/credit of money through electronic payment channels or by means of collection/deposit of cheques.
• Maximum of 4 withdrawals a month including ATM withdrawal. No such limit for deposits.
• Facility of ATM card or ATM-cum-Debit card.
• These facilities are to be provided without any extra cost.

Q6. Whether there are any restrictions like age, income, amount etc. criteria for opening BSBDA by banks for individuals?

Any individual above the age of 10 years can open BSBDA Account.

Q7. What is RuPay Debit Card?

Rupay Debit Card is an indigenous domestic debit card introduced by National Payment Corporation of India (NPCI). This card is accepted at all ATMs (for cash withdrawal) and at most of the PoS machines (for making cashless payment for purchases) in the country.

Q8. What is PIN Number ?

Personal Identification Number (PIN) is randomly generated code for use of ATM Card at the time of withdrawal of money from ATM Machine and also at the time of making payment on PoS.

Q9. How to keep your RuPay Card safe?

Beneficiary of RuPay Card is required to keep the Card in safe custody. PIN should be changed at frequent intervals and should never be shared with anyone. While using the card at ATM Machine or PoS, PIN should be entered in machine very secretly so that nobody could even guess about the PIN Number. As far as possible, Card should be used at authorized places / centres only. Besides, PIN number should never be written on the Card.

Q10. What is special advantage of RuPay Debit Card?

It provides accidental insurance cover upto Rs.1.00 lac without any charge to the customer.

Q11. Whether illiterate customers can be issued RuPay Card?

Yes. However, Branch Manager will have to advise all the related risks to the illiterate account-holder at the time of issuance of RuPay Card.

Q12. How to link Mobile Number with Bank Account ?

Mobile Number of an account holder is entered in customer’s account in CBS System by the Bank on the basis of information given in the Account Opening Form. Also, for existing accounts, banks permit seeding through ATM, SMS from registered mobile, net-banking or on making a request in the branch (there may be variations depending on the bank).

Q13. How to keep debit card operational ?

To get benefit of Accidental Insurance Cover, RuPay Debit Card must be used at least once in 45 days.

Q14. How long the debit card is valid and how to get Debit Card renewed ?

Debit Card expiry date is mentioned on the Card itself. Account-holder is advised to get issued new card well before expiry date of his/her existing card by giving fresh application to the concerned bank.

Q15. If someone has two or more accounts and two or more RuPay Debit Cards, whether accidental insurance cove is available in each account / each card?

Accidental insurance cover is available only in one account.

Q16. What is PoS Machine ?
PoS stands for Point of Sale. PoS Machine is a small device installed at almost all Business Centres to facilitate cashless purchases to their customers.

Q17. Does a person already having a Bank account in any bank needs to open another account under Pradhan Mantri Jan-Dhan Yojna (PMJDY) to get the Accidental Benefit/Life Insurance Benefit under the Scheme?
A person who is already having a bank account with any bank NEED NOT to open a separate account under PMJDY. He/she will just have to get issued a RuPay Card in his existing account to get benefit of insurance. Credit facility can be extended in the existing account if it is being operated satisfactorily.

Q18. What is the concept of overdraft of Rs.5000/- in PMJDY Account and for whom this facility is available?

Overdraft facility upto Rs.5000/- will be available to one account holder of PMJDY per household after 6 months of satisfactory conduct of the account. To avoid duplication Aadhaar number will also be required. If Aadhaar number is not available then Bank will do additional due diligence and also seek declaration from the beneficiary.

Q19. Whether Overdraft facility can be availed in more than one account?

Overdraft facility upto Rs.5000/- is available in only one account per household, preferably lady of the household.

Q20. What is Accidental Insurance Cover? Who will pay the premium ?

Accidental Insurance Cover is Rs.1.00 lac and no premium is charged to the beneficiary — NPCI will pay the premium. At present the premium is Rs.0.47 per Card.

Q21. If both husband and wife who are opening accounts under PMJDY are eligible for Accidental Insurance Cover of Rs.1.00 lac and Life Insurance cover of Rs.30,000/- and overdraft facility of Rs.5000/- in both the accounts separately?
Accidental Insurance cover of Rs.1.00 lac and Life Insurance Cover of Rs.30000/- will be available to all account-holders. However, overdraft facility upto Rs.5000/- will be available to only one person in the family (preferably lady of the house).

Q22. What documents are required to open an account under Pradhan Mantri Jan-Dhan Yojana?

• If Aadhaar Card/Aadhaar Number is available then no other documents is required. If address has changed, then a self certification of current address is sufficient.
• If Aadhaar Card is not available, then any one of the following Officially Valid Documents (OVD) is required: Voter ID Card, Driving Licence, PAN Card, Passport & NREGA Card. If these documents also contain your address, it can serve both as “Proof of Identity and Address”.
• If a person does not have any of the “officially valid documents” mentioned above, but it is categorized as ‘low risk’ by the banks, then he/she can open a bank account by submitting any one of the following documents:
• Identity Card with applicant’s photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks and Public Financial Institutions;
• Letter issued by a gazette officer, with a duly attested photograph of the person.
• Reserve Bank of India (RBI) vide its Press Release dated 26.08.2014 has clarified as under:
• “Those persons who do not have any of the ‘officially valid documents’ can open “Small Accounts” with banks. A “Small Account” can be opened on the basis of a self-attested photograph and putting his/her signatures or thumb print in the presence of an officials of the bank. Such accounts have limitations regarding the aggregate credits (not more than Rupees one lac in a year), aggregate withdrawals (nor more than Rupees ten thousand in a month) and balance in the accounts (not more than Rupees fifty thousand at any point of time). These accounts would be valid normally for a period of twelve months. Thereafter, such accounts would be allowed to continue for a further period of twelve more months, if the account-holder provides a document showing that he/she has applied for any of the Officially Valid Document, within 12 months of opening the small account.

Q23. If the present address is different than that of printed on Aadhaar Card, can the account still be opened under Pradhan Mantri Jan Dhan Yojana on the basis of Aadhaar Card?

If address has changed, then a self certification of current address is sufficient.

Q24. What is meant by Insurance cover of Rs.30,000/- announced by Prime Minister in his speech of 28.08.2014?

Modalities of this Scheme announced by the Prime Minister on 28.08.2014 are being worked out expeditiously and will be disseminated to General Public very soon.

Q25. Whether Cheque Book will be issued in accounts opened under PMJDY?
In PMJDY accounts are being opened with Zero balance. However, if the account-holder wishes to get cheque book, he/she will have to fulfill minimum balance criteria, if any, of the bank.

Q26. What are the direct / special benefits attached to PMJDY?
Special benefits attached to the scheme are:

• Interest on deposit.
• Accidental insurance cover of Rs.1.00 lac
• No minimum balance required. However, for withdrawal of money from any ATM with Rupay Card, some balance is advised to be kept in account.
• Life insurance cover of Rs.30,000/-
• Easy Transfer of money across India
• Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts.
• After satisfactory operation of the account for 6 months, an overdraft facility will be permitted
• Access to Pension, insurance products.

Q27. I have no official valid document for opening an account. Can I still open an account with bank?

Reserve Bank of India (RBI) vide its Press Release dated 26.08.2014 has clarified as under:

“Those persons who do not have any of the ‘officially valid documents’ can open “Small Accounts” with banks. A “Small Account” can be opened on the basis of a self-attested photograph and putting his/her signatures or thumb print in the presence of an officials of the bank. Such accounts have limitations regarding the aggregate credits (not more than Rupees one lac in a year), aggregate withdrawals (nor more than Rupees ten thousand in a month) and balance in the accounts (not more than Rupees fifty thousand at any point of time). These accounts would be valid normally for a period of twelve months. Thereafter, such accounts would be allowed to continue for a further period of twelve more months, if the account-holder provides a document showing that he/she has applied for any of the Officially Valid Document, within 12 months of opening the small account.

Q28. How much interest savings would earn in PMJDY Account?

Interest rate applicable for Saving Bank Accounts (presently @ 4 % in most of the banks) shall be admissible to accounts opened under PMJDY Scheme.

Q29. How much interest will be charged by bank on overdraft facility in PMJDY?

Base Rate + 2 % or 12 %, whichever is lower. At present it will be 12 %.

Q30. Whether banks will be organizing Account Opening Camps in future also?

Yes. Nationalised banks have been asked to organize camps on all Saturdays from 8.00 AM to 8.00 PM. Banks can hold additional camps on other days also.

Q31. If I have required papers for issuance of Aadhaar Card, can I get Aadhaar Card in Bank and open my account under PMJDY simultaneously?

Aadhaar Registration may be got done in Camps organized by UIDAI. In account opening camps also, endeavour is to make Aadhaar Registration Counter available.

Q32. Do you have to pay some fee to open a Bank account under PMJDY?

Rs.20/- will be charged from 1st April 2015 onwards from customers for opening account under BC channel uniformly in all areas.

Q33. Can a minor (below 18 years of age) can open an account under PMJDY?

A minor of above the age of 10 years can open his / her Savings Bank account in any bank.

Q34. Who is Business Correspondent Agent / Bank Mitra and what is their role in PMJDY?

Business Correspondent Agents (Bank Mitras) are retail agents engaged by banks for providing banking services at locations where opening of a brick and mortar branch / ATM is not viable. Scope of activities of Business Correspondents / Bank Mitra are as under:

• Creating Awareness about savings and other products and education and advice on managing money and debt counseling.
• Identification of potential customers.
• Collection and preliminary processing of various forms for deposits including verification of primary information /data.
• Filling of applications / account opening forms
• Collection and payment of small value deposits and withdrawals.
• Receipt and delivery of small value remittances / other payment instructions.
• Furnishing of mini account statements and other account information.
• Any other service on behalf of the Bank, duly authorized by the appropriate authority etc.

Q35. How Bank Mitr helps us to use Banking Services ?

Bank Mitr represent the bank concerned and enable a bank to expand its outreach and offer limited range of banking services at low cost, particularly where setting up a brick and mortar branch is not viable. Bank Mitrs, as agent of the Bank, thus are an integral part of the business strategy for achieving greater financial inclusion.

Q36. Who can be Bank Mitr ?

• Banks have been permitted to engage individuals / entities as Business Correspondent (Bank Mitrs) like
  1. Retired Bank Employees
  2. Retired Teachers
  3. Retired Govt. Employees
  4. Ex-Servicemen
  5. Individual owners of kirana / medical/ fair price shops,
• individual Public Call Office (PCO) operators,
• Agents of Small Savings Scheme of Government of India / Insurance Companies, ‘for profit’
• companies registered under the Indian Companies Act. Since 24.06.2014, RBI has permitted Non Deposit taking NBFCs as BCs in addition to above.

Q37. Can I get my PMJDY account transferred to other City / State upon my transfer posting to other States?

All banks participating in PMJDY are on CBS (Core Banking Solution) platform and the account can easily be transferred to any branch of the bank in any city/town as per the request of the account-holder.

Q38. What is USSD based transaction and how to use it ?

USSD is abbreviated form of “Unstructured Supplementary Service Data”. USSD based Mobile Banking offers basic Banking facilities like Money Transfer, Bill Payments, Balance Enquiries, Merchant Payments etc. on a simple GSM based Mobile Phone, without the need to download application on a Phone as required at present in the Immediate Payment Service (IMPS) based Mobile Banking. Transactions can be performed on basic phone handsets. The user needs to approach his bank and get his mobile number registered. The bank will issue an MPIN (Mobile PIN) to the user. The user thereafter needs to dial *99# and the menu for using USSD opens. Thereafter customer has to follow selections on the menu to complete the transaction. Charges as applicable by the Telecom Operator (not more than Rs.1.50 per transaction as mandated by TRAI) may be applicable.

Traps of Pradhan Mantri Jan-Dhan Yojana

The Pradhan Mantri Jan-Dhan Yojana (PMJDY) is a financial inclusion scheme launched by the Indian government to provide access to basic banking services for the unbanked population. While the scheme offers numerous benefits such as zero balance accounts, debit cards, and financial security, there are certain traps and hidden pitfalls that individuals might face if they are not careful. Below are some of the common traps associated with PMJDY:

1. Limited Features for Overdraft Facility:

• Trap: While PMJDY accounts offer the possibility of an overdraft (up to ₹10,000) for eligible customers, this is not automatically available to everyone. If the account holder does not meet the necessary criteria, they may not be eligible for the overdraft facility.
• Solution: Ensure you meet the eligibility requirements and check with the bank for the specific conditions related to the overdraft facility.

2. Inadequate Awareness of Features:

• Trap: Many people who open PMJDY accounts may not fully understand the benefits and features offered, such as insurance cover, overdraft, and the linked RuPay card. This lack of awareness can lead to missed opportunities for availing the full benefits of the scheme.
• Solution: Educate yourself about the complete set of services offered under PMJDY, including the life insurance, accident cover, and other financial benefits, by consulting with the bank.

3. Risk of Account Dormancy:

• Trap: Many individuals open PMJDY accounts but do not use them regularly, leading to account dormancy. Accounts that remain inactive for long periods may face charges or eventually be closed.
• Solution: Even if you do not need the account frequently, make small transactions regularly to keep the account active and avoid penalties or account closure.

4. Hidden Charges or Fees:

• Trap: Although PMJDY accounts are marketed as zero-balance accounts, some banks may levy charges for certain services such as ATM withdrawals beyond a certain limit, balance inquiries, or cheque book issuance. These charges might not be clearly communicated, leading to unexpected costs.
• Solution: Review your bank’s fee structure and be aware of any charges associated with your PMJDY account. Opt for banks that provide the most transparent terms.

5. Incorrect Linking of Aadhaar Number:

• Trap: PMJDY accounts are linked to Aadhaar numbers for authentication. If there is any mismatch or incorrect linking of Aadhaar with the account, it can lead to issues such as denial of benefits, account freezing, or difficulty in using services like Direct Benefit Transfers (DBT).
• Solution: Ensure that your Aadhaar number is correctly linked to your PMJDY account and check with your bank for any discrepancies. Regularly verify that your Aadhaar details are up to date.

6. Eligibility for Insurance Not Being Claimed:

• Trap: PMJDY accounts come with insurance covers, including life insurance and accidental death coverage. However, many account holders fail to claim these benefits due to a lack of awareness or not meeting the necessary documentation or procedural requirements.
• Solution: If you are eligible for insurance benefits, check with your bank to understand the process for making a claim and ensure you complete all required formalities.

7. Overdraft Mismanagement:

• Trap: The overdraft facility, though useful, may lead to mismanagement or debt accumulation if not used wisely. If you don’t repay the overdraft on time, it could result in penalties or affect your credit score.
• Solution: Use the overdraft facility only when absolutely necessary and ensure you repay it within the stipulated time frame to avoid financial strain.

8. No Access to Higher Services:

• Trap: PMJDY accounts provide basic banking services. However, users might face challenges when trying to access higher-end banking services, such as loan facilities or investment options, which may require them to upgrade to a regular savings account.
• Solution: If you require more advanced banking services, such as loans or higher interest rates, you may need to upgrade your account or consider other banking options.

9. Limited Availability of Bank Branches/ATMs:

• Trap: While PMJDY accounts provide access to ATMs and banking services, in some remote or rural areas, access to bank branches or ATMs may be limited, making it difficult to avail of services such as cash withdrawals or deposits.
• Solution: Choose a bank with a widespread network of branches or ATMs, or make use of other mobile banking or digital platforms to manage your account remotely.

10. Account Closure or Dormancy After Non-Utilization:

• Trap: PMJDY accounts can be closed by banks if they remain dormant for an extended period. Some banks may require a minimum number of transactions within a year, and failure to comply could lead to account closure.
• Solution: Keep your account active by making at least one transaction each year, whether it is a small deposit or withdrawal, to prevent the account from being closed.

11. Lack of Personalized Banking Services:

• Trap: Since PMJDY accounts are targeted towards low-income individuals and are designed to offer basic banking services, customers may not have access to personalized services like relationship managers, customized investment options, or premium banking privileges.
• Solution: If you require more tailored services, you may need to consider switching to a regular savings account with the same bank or another bank that offers these services.

12. Limited Digital Banking Access:

• Trap: Some PMJDY account holders may face challenges in accessing digital banking services, especially if they are not comfortable with online banking platforms or if their mobile network connectivity is poor in rural areas.
• Solution: Ensure you receive adequate support from the bank in setting up mobile banking or internet banking, or use banking correspondents (BCs) in your area for assistance.

13. Aadhaar Seeding Issues for Direct Benefit Transfers (DBT):

• Trap: To avail of government subsidies or benefits under Direct Benefit Transfer (DBT), the PMJDY account must be correctly linked to your Aadhaar number. Any mismatch in Aadhaar details can prevent you from receiving your entitled benefits.
• Solution: Ensure that your Aadhaar is correctly linked to your PMJDY account and regularly verify your bank details with government schemes to avoid missing out on DBT benefits.

14. Exclusion from Certain Premium Banking Products:

• Trap: PMJDY accounts are meant for people from economically weaker sections and may not allow access to premium banking products like credit cards, high-interest savings accounts, or wealth management services.
• Solution: If you require access to premium banking products, you may need to switch to a different type of account once your financial situation allows for it.

Conclusion:

The Pradhan Mantri Jan-Dhan Yojana (PMJDY) is a valuable initiative aimed at improving financial inclusion and access to basic banking services for the underprivileged. However, to fully benefit from the scheme and avoid potential traps, it is essential to understand the terms and conditions of the account, stay aware of the features provided, and regularly engage with the bank to ensure that you’re maximizing the benefits. By staying informed and proactive, you can avoid pitfalls such as hidden charges, missed insurance benefits, or issues with Aadhaar linking.

Key Terms:

• Bank account under PMJDY
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• Financial empowerment
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• financial inclusion
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• Government Schemes
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• PMJDY
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• PMJDY account
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• PMJDY benefits
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• PMJDY eligibility
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• PMJDY enrollment
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• PMJDY registration
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• Pradhan Mantri Jan Dhan Yojana
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• Pradhan Mantri scheme
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• RuPay card
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• Zero balance account

Disclaimer: The information provided here has been compiled from various sources to the best of our knowledge. While every effort has been made to ensure the accuracy of the details, there may be occasional errors or omissions. If you find any discrepancies or incorrect information, kindly inform us so we can make the necessary corrections. Thank you for your understanding and cooperation.