Jan Dhan Yojana Progress and the Roadblocks



Pradhan Mantri Jan Dhan Yojana is the flagship financial inclusion plan of the NDA Government. The Finance Ministry rolled out this scheme to enable each household in the country to have access to at least one bank account. All Indian citizens can now avail of a bank account despite the lack of KYC documentation. These bank accounts are valid for a year within which account holders must furnish proof of having applied for valid documents required to comply with KYC norms. The idea of this scheme was first announced by Prime Minister Narendra Modi in his Independence Day speech and it was later launched on August 28, 2014. The bank accounts opened under the scheme come with a RuPay debit card and accident insurance cover. Holders of accounts opened before January 26, 2015 are also provided with a premium-free life insurance cover.

Pradhan Mantri Jan Dhan Yojana gets a website

The Government of India launched a website for the Pradhan Mantri Jan Dhan Yojana (PMJDY) on October 27, 2014. The portal is available in two languages – English and Hindi. The Union Finance Ministry launched the dedicated portal in keeping with the Digital India ambitions of the Government enabling technology to facilitate the implementation of all Government schemes. G S Sandhu, Secretary of Department of Financial Services, launched the website in New Delhi. “The website will provide easy access to information on the Yojana, administrative structure created for monitoring, progress of the scheme, availability of account opening forms and financial literacy to the urban and rural population”, he said on the occasion of the launch. Apart from the contact details of all the various mission directors and the nodal officers, the portal also contains all scheme-related details including the Government circulars, media campaigns, and event-related update. Currently the site features the following sections – Circulars, Progress Report, Press Release, and Who’s Who. It also showcases the national toll free numbers and allows for a direct contact with the Ministry of Finance. The site has also been linked up with the scheme’s Social Media fronts.

Unprecedented success

According to official statements from the Finance Ministry, the Pradhan Mantri Jan Dhan Yojana has met with unprecedented success. On the first day of the launch over 1.5 crore accounts were opened in banks under the scheme – setting a record of sorts. By October 22, 2014, reports suggest that 6.47 crore bank accounts have been opened under the scheme. On an average about a lakh accounts are still being opened every day. A total amount of INR 4,813.59 cr has been mopped up from the market in the form of deposits by the scheme. Prior to the launch of the scheme, this money would have remained out of the scope of the mainstream banking sector.

Gearing up for Phase II

On January 26, 2015, Phase I of the Pradhan Mantri Jan Dhan Yojana is set to come to an end and Phase II will be launched. In the run-up to this phase, the Finance Ministry has asked the Life Insurance Corporation (LIC), India’s largest life insurance provider, and all other State-owned general insurance companies to finalise the details of the products to be sold to all the bank account holders under the scheme. Anoop Wadhwa, Joint Secretary, Insurance, at the Ministry of Finance, held a meeting in October to review the progress on the preparations for the Phase II plans. About 15 micro-insurance products have been identified for Phase II. These will be sold to the PMJDY account holders. Some of them like crop insurance are targeted at the rural sector while life insurance may be applicable to all account holders. While the rollout of Phase II is scheduled for January, news reports say that a number of State insurance providers have already started selling these micro-insurance products in small quantities to the PMJDY account holders.

More delays and concerns

After a very successful launch, the PMJDY seems to have run into delays, and concerns about the effective implementation of the scheme. By early October, about 5.29 crore accounts had been opened while only 1.78 RuPay cards had been issued. The RuPay debit card is a major highlight of the scheme and is key to providing the account holders the promised life and accident insurance covers. A lack of supply of debit cards has been blamed and authorities are trying to hasten the process of issuing debit cards, say news reports. If supply constraints persist, the problem could, however, spiral out of hand as estimates suggest that the scheme will require about 10 crore debit cards by 2015.

Another major concern that has come up is that of duplication of accounts. The lack of KYC regulations make it easy for account holders to open multiple accounts in different banks to avail of multiple insurance policies. Provision of overdraft facility without adequate documentation is another worry. These concerns have not been addressed yet. Linking the accounts to Aadhar cards looks like the only feasible solution and banks are working in this direction.


  • As Pradhan Mantri Jan-Dhan Yojana is coming to an end in August this year, the government is all set to extend it with doubling of the overdraft amount under the scheme and utilizing it to give loans to promote entrepreneurship.
  • The scheme currently provides an overdraft of Rs 5,000 after satisfactory operation of the account for six months. There is a possibility of doubling the amount to Rs 10,000 to provide easy emergency funds.
  • The beneficiaries amounted to 310 million 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.

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