18 Mins

Pradhan Mantri Jan Dhan Yojana (PMJDY) is a National Mission for the financial inclusion of the citizens of India. The Government of India launched the Pradhan Mantri Jan Dhan Yojana on 28th August 2014. The sole objective of the scheme is to ensure universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance, and pension. Basically, the intends to cover the category of people who are not covered under any other small savings scheme or banking services. Moreover, PMJDY provides a platform for other social security schemes as well. Such schemes are Pradhan Mantri Jeevan Jyoti Bima Yojana PMJJBY, Pradhan Mantri Suraksha Bima Yojana PMSBY, Pradhan Mantri Mudra Yojana PMMY, and Atal Pension Yojana APY

What is PMJDY?

Its aim is to ensure access to affordable financial services for individuals who do not hold any other account. These financial services include a basic savings bank account & deposit accounts, remittance, credit, insurance, and pension. Under PMJDY you can open a basic savings bank account in any bank branch or Business Correspondent (Bank Mitra) outlet. 

As per the Ministry of Finance, approximately 42.44 crore beneficiaries have been added under the scheme as of 2nd June 2021. Further, 31 crore Rupay debit cards have been issued since the initiation of the scheme.  

Further, the Government of India has extended the comprehensive PMJDY program beyond 28th August 2018. The Central Government has changed its focus of opening accounts for every household to every adult. Hence, the focus and reach are widened since the success of the first phase of the scheme.

The following entities are eligible under Pradhan Mantri Jan Dhan Yojana PMJDY to become a Bank Mitra:

  1. Retired bank employees
  2. Retired teachers
  3. Ex-servicemen
  4. Retired government employees
  5. Individual owners of Kirana/ medical/ fair price shops
  6. Individual Public Call Office (PCO) operators
  7. Agents of Small Savings Scheme of Government of India / Insurance companies
  8. The companies registered under the Indian Companies Act
  9. Non-Banking Financial Companies (NBFCs) that don’t take deposits.

Objectives of Pradhan Mantri Jan Dhan Yojana

The Pradhan Mantri Jan Dhan Yojana PMJDY has achieved its objectives using 3 approaches, namely, inter-departmental convergence, public-private partnerships, and Bank Mitra business correspondent. The intent is to cover those sections of the society that are not enrolled in the mainstream banking system. To ensure such coverage, Sub Service Areas (SSA) have been introduced. Under SSA 6 lakh villages in India have been mapped to each bank depending on the bank’s service area. Thereby covering 1000 to 1500 households in one bank outlet. 

The RBI approves a few entities and individuals along with banks to be a part of Bank Mitra. Such entities and individuals are unemployed youth, retired bank employees, self-help volunteering groups, civil society organizations, and non-deposit NBFCs. The Department of Finance monitors and oversees the activities and progress of Pradhan Mantri Jan Dhan Yojana

The following are the objectives of Pradhan Mantri Jan Dhan Yojana:

  1. Universal access to banking services
  2. Improvement in financial literacy, independence, and sustainability
  3. Pension facility for the unorganized sector in India
  4. Basic savings bank accounts 
  5. Access to need-based financial assistance and credit through an overdraft facility
  6. Reactivation of dormant accounts to revive the existing account holders
  7. Micro-insurance through accidental insurance coverage
  8. Ease to access to own funds through a Rupay debit card facility 

Features of PMJDY Pradhan Mantri Jan Dhan Yojana

  1. The PMJDY scheme provides one basic savings bank account for each and every unbanked person.
  2. No requirement of minimum balance for the basic savings bank account
  3. Interest income is payable on the deposits 
  4. The account holder will receive a Rupay debit card
  5. Bank Mitra is an individual or an organization that is a representative of a bank. They are authorized to offer basic banking services in rural as well as urban areas.
  6. The account holders are eligible for an overdraft facility up to Rs 10,000. However, your age must be between 18 years to 65 years. You can apply after the expiry of 6 months from the date of opening.
  7. Accidental insurance coverage is available along with the Rupay card to the account holder. The accidental coverage is available up to Rs  2 lakh if the account was opened after 28th August 2018. However, if the account was opened before 28th August 2018 then the coverage is limited to Rs 1 lakh.
  8. PMJDY account holders are eligible for other social security schemes as well. These schemes are Atal Pension Yojana APY, Direct Benefit Transfer DBT, Pradhan Mantri Jeevan Jyoti Bima Yojana PMJJBY, Pradhan Mantri Suraksha Bima Yojana PMSBY, Micro Units Development & Refinance Agency Bank MUDRA.
  9. The public sector banks, regional rural banks, and private sector banks provide financial services under the PMJDY scheme.
  10. An Indian citizen is eligible to open an account. Even a minor can open the account along with a guardian. 
  11. You can withdraw from your account up to Rs 10,000 using your Rupay debit card. Moreover, you can make up to 4 ATM withdrawal transactions in a month. 
  12. Usually, the interest rate on accounts under PMJDY scheme is 4%. However, this interest rate may vary from time to time.

Who can apply for a PMJDY account?

An individual must satisfy the following conditions to open a PMJDY account:

  1. A citizen of India. Even if you cannot prove your national identity with any document, you can open an account. However, here the bank must perform a thorough background check and categorize such an individual as ‘low risk’.
  2. A minor whose age is above 10 years. A guardian of such a minor will administer the account until the minor attains the majority. Moreover, there is no restriction on the issuance of the Rupay card to a minor. He/ she can use the Rupay card to withdraw any sum from ATMs.
  3. If you hold a savings account with any bank then you can easily link such an account with a PMJDY account to avail of other benefits.
  4. An individual who submits an identity proof which is duly authorized by gazette officers can open a PMJDY account

Documents Required to Open a Pradhan Mantri Jan Dhan Yojana Account

An eligible individual must submit the following documents to open a PMJDY account:

  1. Permanent address proof such as Aadhaar, passport, Voter ID, Driving License
  2. Valid identity proof such as Aadhaar, passport, Voter ID, Driving License, PAN, or Job card under the National Rural Employment Guarantee Act (NREGA).
  3. You need to present an identity document with a photograph. 2 passport size photographs.
  4. In case you do not possess any of the above documents then you can submit an authority letter from any gazetted officer in the country. Such an authority letter will act as proof of your national identity.
  5. However, in case you do not provide satisfactory documents then the Bank will conduct a thorough background check. The bank will process your account opening request only if it finds you to be of ‘low risk’. The bank will issue a temporary and small savings bank account for a period of 1 year. Within this period of 1 year, you must arrange and submit the necessary documents. On submission of the documents, the bank will convert your temporary account into a permanent account.

Which Banks provide Pradhan Mantri Jan Dhan Yojana?

You may also like to read about the Pradhan Mantri Awaas Yojana Gramin (PMAYG)

Private Sector BanksPublic Sector BanksPublic Sector Banks
Dhanalaxmi Bank Ltd.Oriental Bank of CommerceUnion Bank of India
YES Bank Ltd.State Bank of India (SBI)Dena Bank
Kotak Mahindra Bank Ltd.Bank of Baroda (BoB)Syndicate Bank
Karnataka Bank Ltd.Bank of MaharashtraPunjab and Sind Bank
ING Vysya Bank LtdPunjab National Bank (PNB)Vijaya Bank
IndusInd Bank Ltd.IDBI BankIndian Bank
Federal Bank Ltd.Union Bank of IndiaAndra Bank
HDFC Bank Ltd.Allahabad BankCorporation Bank
Axis Bank Ltd.Canara BankBank of India
ICICI Bank Ltd.Central Bank of India

Overdraft Facility Under PMJDY Scheme

An overdraft or general loan facility to the low-income groups and underprivileged account holders. The intent is to provide hassle-free credit to help account holders in meeting their financial emergencies without much insistence on security as collateral. 

Features of Overdraft facility

  1. The period of sanction is 36 months and it is subject to an annual review of the savings account
  2. No security or collateral
  3. The interest rate cannot exceed 2% above the base rate
  4. No processing fee on the loan or overdraft facility
  5. The sanctioning authority is the bank branch with which you hold the savings account
  6. Overdraft facility is available up to Rs 10,000. Moreover, an overdraft facility of Rs 2000 is available without any conditions
  7. You need to submit a loan application-cum-undertaking and an arrangement letter.
  8. During the period of the loan, the NPCI will seed the Aadhaar number of the account holder. The NPCI will restrict any move-out of Aadhaar for such accounts
  9. SBOD account will become the primary account to receive all subsidies/benefits. DBT should also be frozen to such accounts till the currency of the loan.
  10. NPCI will provide a repository of the Aadhaar Seeding for SBOD to the Banks to verify any earlier seeding.  Loan accounts will be subject to IRAC norms of RBI.
  11. You need to fill the Overdraft facility form and submit it to the bank. In the form, you must mention the basic details such as name, date of birth, Father’s/Husband’s name, mobile number, Aadhaar number, sources of income, existing liabilities. With respect to your family members, you must provide their names, relationship, whether dependant or not, and annual income. You must read the terms and conditions carefully before accepting them. 

Eligible Loan or Overdraft Amount

The following are the conditions for the amount of loan eligibility for an applicant. The system will provide a report on the eligible amount:

  • 4 times of Average monthly balance, or
  • 50% of credit summations in the account during the preceding 6 months, or
  • Rs 5000/- 

whichever is lower

Eligibility for Loan Under PMJDY Scheme

You must satisfy the following conditions or eligibility criteria before applying for a loan:

  1. For 6 months you must have operated the basic savings bank account satisfactorily. Hence, the loan is available only after the expiry of 6 months from the date of opening the account.
  2. The bank will grant overdraft facilities to the earning member of the family,  preferably the women of the house.
  3. There must be regular credits under the Direct Benefit Transfer for the LPG DBTL scheme or other verifiable sources
  4. You must link your Aadhaar number to the account to avoid any duplicate benefit of loan or overdraft
  5. You should not hold any other savings bank account with any Bank branch to ensure compliance with RBI directives. 
  6. The basic savings bank account holder’s age should be between 18 years to 65 years. Hence, it is evident that a minor cannot apply for a loan or overdraft facility
  7. More than one member of the family cannot apply for a loan.

Life Insurance Under PMJDY Scheme

During the launch of the PMJDY scheme on 28.08.14 in New Delhi, the Hon’ble Prime Minister announced a life cover of Rs. 30,000/- with the RuPay Card for all those who subscribe to a bank account for the first time during the period 15th August 2014 to 26th January 2015. Life Cover under Pradhan Mantri Jan Dhan Yojana will serve to give a life insurance cover on the death of the life assured, due to any reason, to the deceased’s family. The scheme aims to provide security to those families who cannot afford direct insurance, namely the urban poor and rural poor who are not covered under any social security scheme. 

Features of the Life Insurance Under PMJDY Scheme

  1. The insurance coverage of Rs 30000 is available in the case of death due to any cause on fulfillment of other conditions.
  2. You do not need any separate form for joining the scheme of the life insurance cover.
  3. The Government of India pays the entire life insurance premium for the coverage. The account holder need not pay any additional amount.
  4. Death caused by any reason is covered under the PMJDY scheme. Hence, death due to suicide is also covered under this scheme.
  5. The Life Insurance Corporation of India offers this insurance scheme
  6. The insurance benefit is not available to the nominee of the Aam Admi Bima Yojana (AABY) account holder.
  7. The claim amount is payable to the person who is a nominee in the bank account of the scheme holder. The LIC will pay the amount to the credit of the Bank account of the nominee through APBS (Aadhar Payments Bridge System) / NEFT only if APBS is not available.
  8. The nominee must provide his/ her bank details in the claim form. LIC will forward the intimation of claim settlement to the bank branch. 
  9. After receiving the claim form along with supporting documents LIC will settle the claim within a week from the date of receipt of the claim intimation. 
  10. There is no lien period. The insurance cover is available for the period from 15.08.2014 to 31.01.2015.
  11. The insurance is under a one-year term. Moreover, the insurance is automatically renewed on the renewal date. The risk cover will continue up to the exit of the member. 
  12. A member exits from the scheme on completing 60 years of age, closure of PMJDY scheme, failing to satisfy any eligibility conditions, or expiry of the validity of his/her RuPay Card. 

Eligibility for Life Insurance Under PMJDY Scheme

  1. Individuals opening the account for the first time, with RuPay Card in addition, during the period from 15th August 2014 till 31st January 2015
  2. The individual must be a member of the family. He/ she should be in the age group of 18 to 59. Hence, a minor and an individual who has turned 60 cannot apply.
  3. The account holder must have a RuPay Card and Bio-Metric Card linked to a bank account. If it is not already linked at least it must be in the process of being linked to a bank account. However, due to such a condition, the organization cannot deny a claim settlement.
  4. If you are holding more than one card or accounts, then the benefit will be available only under one card. This means every person is eligible for a single cover of Rs.30,000 on fulfilling the eligibility conditions.
  5. If you have yourself paid the insurance premium in full or partially to avail of any other Insurance Benefit linked with the same bank account then also you are eligible under the PMJDY scheme.
  6. In the case of a joint account under PMJDY, if the primary account holder is ineligible for risk cover then the risk cover will be available to the secondary account holder. However, the secondary account holder must satisfy the eligibility conditions for life cover of Rs 30,000.
  7. If a minor opens an account between the period from 15th August 2014 to 26th January 2015 then he will be eligible for Life Insurance Cover. However, he/ she will be eligible after attaining the age of 18 years within the period from 15.08.2014 to 31.01.2015

Accidental Insurance Under PMJDY Scheme

  1. Eligible account holders are eligible for personal accidental insurance under the PMJDY scheme.
  2. The accident cover is available for an amount up to Rs 1 lakh upon accidental death.
  3. The RuPay cardholder must have performed at least one successful financial prior to the date of the accident.
  4. Non-financial customer-induced transaction prior to the date of the accident is also acceptable
  5. The account holder must carry the transaction at any bank branch, bank Mitra, POS outlet, ATM, E-commerce, and so on. 
  6. In order to recognize a valid transaction a transaction on the day of the accident is also valid.
  7. Any transaction that takes place on both intra-bank and inter-bank channels is also valid for the insurance
  8. If you hold more than one account then the cover is available only for one account.

Who is Not Eligible for Insurance Cover?

The following individuals are not eligible for insurance coverage under the PMJDY scheme:

  1. An employee of the Central or Stage Government who is either in service or retired from their service. Moreover, even their family members are not eligible for insurance cover.
  2. An employee of Public Sector Banks, Public Sector Undertakings, entities owned by the Central or State Government or jointly held by State and Central Government either in service or retired. Moreover, even their family members are not eligible for insurance cover.
  3. A taxpayer whose annual income is taxable under the Income Tax Act, 1961. TDS have been deducted from their income or any of their family member’s income.
  4. An individual who either himself/ herself or any of their family member runs an occupation that is covered under the Aam Aadmi Bima Yojana.
  5. The account holder does not fulfill any or all of the eligibility criteria under the scheme. 
  6. Account-holders who have life insurance cover from any other scheme of the bank have the option to choose between the existing cover or the PMJDY cover. The holder can get benefits only from one scheme.

How to File a Claim for Insurance Under PMJDY Scheme?

The nominee must file the claim form to the bank branch where the basic savings bank account was held by the account holder. The nominee must file the following documents along with the claim form:

  1. In the claim form the nominee must accept the terms and conditions, sign and submit it. The claim form is available at any bank branch, LIC office, or LIC website
  2. An attested copy of the Aadhaar card or biometric and passbook of the deceased
  3. The original death certificate attested by the nominee
  4. In order to confirm the head of the family status, the nominee must submit the ration card or BPL card of the deceased
  5. An attested copy of the Aadhaar card or biometric and passbook of the nominee
  6. Attested copy of age proof i.e. Aadhaar card, extract from birth register, extract from school certificate, voter’s list or ration card.
  7. Attested copy of AABY membership certificate, if available.

Read also about the Pradhan Mantri Shram Yogi Mandhan

Frequently Asked Questions

Can I open a joint account under Pradhan Mantri Jan Dhan Yojana?

Yes, You can open a joint account under Pradhan Mantri Jan Dhan Yojana PMJDY scheme.

I have multiple bank accounts under PMJDY scheme, will I get insurance coverage for all account?

No, you will receive insurance civerage benefit on one account irrespective of multiple accounts under the PMJDY scheme.

Can I extend the amount of loan under PMJDY scheme?

Yes, you can apply for a higher loan amount under PMJDY scheme. However, the bank will perform satisfactory check before issuing the loan amount. You must maintain a regular repayments of your EMIs.

How much processing fees is applicable on loan under PMJDY scheme?

No processing fee is applicable on loan under PMJDY scheme.

Can a minor open an account with a bank under under PMJDY scheme?

Yes, a minor can open an account with a bank under under PMJDY scheme. The age of such a minor must be more than 10 years of age. Further, the account will be under the supervision of the guardian or parent of the minor.

I don’t have a valid residential proof. Can I open an account under PMJDY scheme?

Even if you do not have a valid residential proof you open an account under PMJDY scheme. Further, you must mandatorily submit an identity proof which is issued by the Government of India. If you do not possess a valid identity proof then you can open a temporary account and submit the documents within 1 years from the date of opening of the account.

Will I get a cheque book against my PMJDY savings bank account?

The basic savings bank account under PMJDY scheme is a zero balance account. If you want get a cheque book then you will have to maintain a minimum balance in your savings account with the bank.

What is the interest rate of accounts under PMJDY scheme?

Usually, the interest rate on accounts under PMJDY scheme is 4%. However, this interest rate may vary from time to time.

If I don’t use my Rupay card for 1 month will it become inactive?

No, even if you do not use your Rupay card for a period of one month it will be active. However, you must make a transaction within 45 days or else the Rupay card will become inactive. 

Can all the major members of the family join the Scheme? 

No. Only one person from the family who is the Head of the family can join the scheme. Moreover, he/ she must be between age 18 to age 60.

Will suicide be covered under the insurance cover from PMJDY scheme?

Yes, a death caused due to a suicide is covered under the insurance policy of PMJDY scheme. 

Will I have to make separate nomination for the life insurance under PMJDY scheme?

No, you don’t need to make a separate nomination for the life insurance under PMJDY scheme. The nomination made under the bank account and Rupay card will be considered for the purpose of insurance coverage. 

What will happen if no nominee has been added to my account under PMJDY scheme?

If no nominee has been added to the account under the PMJDY scheme then the insurance claim will be passed on to the legal heir of the deceased. For this purpose, the legal heir must submit an indemnity bond to dispense with legal evidence of title in the prescribed Format (C1 & C2) of LIC.