Pradhan Mantri Jan Dhan Yojana-Banking Manual

December 27, 2014

Introduction

Financial inclusion has been one of the greastest challenges India is facing for years. The term financial inclusion means ensuring economic accessibility to the weaker section of the society. Or we can say delivery of financial services at affordable costs to all the classes of the society. Be it lending to individuals, business groups or microfinance lending, the banking sector plays an important role in all these financial activities. Therefore it invites RBI’s guidance when it comes to financial inclusion. In other words RBI regulates the financial inclusion process in our country. Still more people are untouched by the economic stream despite many successful attempts. The reason is in a densely populated country like India success ratio becomes smaller as compared to the number of people. To remove this economic untouchability union government came up with a possible solution named “Pradhan Mantri Jan Dhan Yojana”.

About Pradhan Mantri Jan Dhan Yojana

The Pradhan mantri jan dhan yojana was launched on 28th august 2014 under the leadership of PM Narendra Modi. The objective of the program is – Eradication of financial apartheid from the country by providing basic banking facility to every poor.

Jan Dhan Yojana at a glance

Slogan – Mera khata bhagya vidhaata

1. Benefits

1) No minimum balance required to maintain bank account. Means it is a zero balance account.
2) Rupay Kisan debit Card for ATM transactions.
3) Inbuilt accident insurance coverage of 1lakh. In the second phase these account-holders will get life insurance and pension products.
4) Overdraft facility upto Rs 5000 will be available after six months of regular maintenance of bank account. Only adhar linked accounts would be eligible for overdraft facility.
Unlike previous schemes it emphasises on households instead of villages. Both rural and urban areas are targeted.

2. Drawbacks of Jan dhan yojana

Many people (having savings accounts) will open no-frills account to avail overdraft facility. After getting overdraft money they will stop maintaining these account, thus leaving banks with large number of inoperative accounts. As a result banks will be overloaded with NPA burden. Their credit ratings will come down. Finally it will affect Indian economy in foreign market.

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