Knowledge nugget of the day: PM Jan Dhan Yojana (PMJDY)

Subject: Government Schemes and Economy

Why in news?

The Pradhan Mantri Jan Dhan Yojana (PMJDY) completes 10 years of implementation today.

Key takeaways

1. The government’s flagship financial inclusion programme Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched by Prime Minister Narendra Modi ten years ago on August 28, 2014.

2. It is a National Mission for Financial Inclusion to ensure access to financial services, namely, a basic savings & deposit accounts, remittance, credit, insurance, pension in an affordable manner.

3. The government aims to open more than 3 crore accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY) during the current financial year 2024-25, Finance Minister Nirmala Sitharaman said on Tuesday. 

4. The Finance Ministry said the PMJDY has been the foundation for people-centric economic initiatives. PMJDY has helped provide adults with a bank account which has helped in direct benefit transfers, COVID-19 financial assistance, PM-KISAN.

5. The JAM Trinity (Jan Dhan, Aadhaar, Mobile) has given a boost to the Direct Benefit Transfer programme and expanded its coverage from partial to ubiquitous, the Finance Ministry said. 

6. Under the PMJDY, there are no account opening charges, no account maintenance charges, and no minimum balance charges. Free RuPay debit card, with in-built accident insurance cover of Rs 2 lakh, and access to overdraft facility of up to Rs 10,000, are other major features of the scheme.

7. PMJDY accounts are eligible for Direct Benefit Transfer (DBT), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana (APY), Micro Units Development & Refinance Agency Bank (MUDRA) scheme.

Beyond the term

What is FI-Index?

The Financial Inclusion Index (FI-Index), which captures the extent of financial inclusion across the country, stood at 64.2 in March 2024 from 60.1 in March 2023, the Reserve Bank of India (RBI) said on Wednesday.

The index has been conceptualised as a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector in consultation with government and respective sectoral regulators.

The FI-Index comprises of three broad parameters Access (having a weight of 35 per cent in the index), Usage ( weight 45 per cent), and Quality ( weight 20 per cent) with each of these consisting of various dimensions, which are computed based on a number of indicators. The Index is responsive to ease of access, availability and usage of services, and quality of services, comprising in all 97 indicators.

The FI-Index has been constructed without any ‘base year’ and as such it reflects cumulative efforts of all stakeholders over the years towards financial inclusion.

Point to ponder:

What important interventions are needed to address the current barriers to financial inclusion?

(Refer: PM Jan Dhan Yojana has accelerated financial inclusion, reduced inequalities)

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