The government is all set to extend the Pradhan Mantri Jan-Dhan Yojana, possibly doubling the overdraft amount under the scheme and using it to give loans to promote entrepreneurship. The second phase of the financial inclusion scheme that seeks to provide a bank account to everyone ends in August.
An announcement regarding PMJDY’s extension is expected in this year’s budget, a senior government official said. “The government is going to build upon this scheme and bundle other financial products to the financially excluded,” he said, adding that there could also be an increase in the overdraft amount. Finance minister Arun Jaitley will announce the budget on February 1.
The scheme currently provides an overdraft of Rs 5,000 after satisfactory operation of the account for six months. This is available only for one account per household, preferably that of the woman of the household. The amount may be doubled to Rs 10,000 to provide easy emergency funds.
“This is being discussed and it may be doubled for those accounts which are receiving direct benefit transfer through one or more schemes,” the official added. The government is also looking to promote entrepreneurship and may push lenders to further this goal through the good operative accounts. Part of the National Mission for Financial Inclusion, PMJDY seeks to make sure that at least one person in every household has a bank account. This is “to ensure access to financial services, namely, banking/ savings & deposit accounts, remittance, credit, insurance, pension in an affordable manner”, according to the PMJDY website. Banks were tasked with undertaking the drive. Accounts can be opened with a zero balance although a minimum balance is needed in order to have cheque book facilities.
There were close to 310 million beneficiaries under PMJDY with total deposits of Rs 73,689.72 crore as of January 17, according to data on the PMJDY website. About 240 million account holders also have Rupay debit cards. “The second phase of the scheme was to achieve complete financial inclusion by providing micro-insurance and pension schemes like Swavlamban.
We have made good inroads and there is a huge potential to build upon this base,” the official said. PMJDY was recognised by the Guinness World Records in 2015 for opening the most bank accounts — about 18 million — between August 23 and 29, 2014, as part of the financial inclusion campaign. After PMJDY, the government started two insurance schemes under its social security drive billed as Jandhan se Jansurakhsa.
About 53 million people are currently insured under the Pradhan Mantri Jeevan Jyoti Bima Yojana, which offers a renewable one-year term life cover of Rs 2 lakh for an annual premium of Rs 330.