Pradhan Mantri Jan-Dhan Yojana

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is the flagship financial inclusion scheme of the Government of India, launched on August 28, 2014. It set out in mission mode to provide at least one basic bank account for every household (later extended to every adult), thereby integrating the poorest of the poor into the formal banking system.

The slogan for PMJDY was “Mera Khata, Bhagya Vidhata” (“My account, the creator of my destiny”), emphasizing that having a bank account can be a gateway to prosperity. This scheme is a cornerstone of the broader “JAM Trinity” (Jan-Dhan, Aadhaar, Mobile) which aims to deliver government services and subsidies efficiently through linked bank accounts.

Key Features of PMJDY Accounts

Zero-Balance Basic Savings Account

Beneficiaries can open a savings bank account without any minimum balance requirement. These are no-frills accounts with no account maintenance charges. (If an account holder wants a checkbook, they may need to fulfill minimum balance norms, but otherwise it’s not required to keep any balance.)

RuPay Debit Card

Each Jan-Dhan account comes with a RuPay debit card. This card allows account holders to withdraw cash at ATMs, make deposits or transfers at BC points, and make digital payments at shops.

Accidental Insurance Cover

The RuPay debit card issued under PMJDY has an in-built accident insurance cover. Initially, this was ₹1 lakh for accidental death or permanent total disability. In 2018, the cover was increased to ₹2 lakh for new accounts opened after that date. To be eligible for the claim, the card must have been used at least once in the 90 days prior to the incident.

Life Insurance Cover

As an incentive for early adoption, a one-time life insurance cover of ₹30,000 was offered by the government for accounts opened within the first few months of the scheme (by January 26, 2015). This coverage, provided through LIC, was payable to the nominee in case the account-holder (age 18-59) died (with certain exclusions).

Overdraft Facility

PMJDY accounts are eligible for a small overdraft (OD) or credit facility after six months of satisfactory transaction history. Initially, one account per household (preferably held by a female member) could get an OD up to ₹5,000. This was later enhanced to ₹10,000 per account (with up to ₹2,000 available without condition of six-month operation). The OD is like a small credit line: the account holder can draw more money than they have (up to the limit) and must repay it over time with interest. The age limit for availing OD was also extended from 18-60 to 18-65 years.

Direct Benefit Transfer Ready

All Jan-Dhan accounts are seeded with Aadhaar (where available) and enabled for direct receipt of government payments. This makes them a ready conduit for subsidies, scholarships, pensions, etc. to flow directly to beneficiaries, eliminating middlemen.

Mobile Banking & UPI

PMJDY accounts are on core banking systems, so they can be accessed via mobile banking, UPI, USSD-based services on feature phones, etc. Basic USSD banking (*99# service) in multiple languages was promoted for Jan-Dhan users without smartphones, allowing them to check balance or send money using any mobile phone.

Objectives and Benefits

Universal Banking Access

The immediate goal was to end financial untouchability by providing every household with a bank account. This enables even the poorest person (like a landless laborer or urban slum dweller) to safely save money, send/receive payments, and escape the clutches of cash-only living.

Plugging Leakages in Subsidies

By ensuring each household has an account and linking it with Aadhaar, the government could route welfare benefits straight to bank accounts (DBT). This significantly reduces leakage, duplication, and corruption in welfare schemes. For example, subsidies for LPG (cooking gas) under PAHAL, or payments under the PM-KISAN income support, go directly to beneficiary accounts, ensuring the full amount reaches the target.

Financial Empowerment

The scheme particularly focused on marginalized groups – more than half of the accounts are held by women, and a significant portion are in rural areas. Owning a bank account in her name gives a woman more control over finances. It also integrates rural poor with the formal financial system, enabling them to access credit and insurance in the future. The availability of an overdraft means an account-holder has a safety net for emergencies instead of turning to a moneylender.

Promotion of a Savings Culture

Jan-Dhan accounts come with interest on deposits (like regular savings accounts). This encourages poor families to save even small amounts, knowing it is secure and yields a return. Over time, this can build a fund for education, marriage, or old age. Previously, many poor kept savings at home or in physical assets (gold, cash) which were vulnerable to theft or erosion.

Gateway to Other Services

The Jan-Dhan account was conceived as the first step for a financially excluded person. Once the account exists, the person can be “plugged in” to other services: they can buy micro-insurance (PMSBY, PMJJBY premiums can auto-debit from the account), contribute to pensions (APY auto-debits), take small loans (banks have data on transactions to assess creditworthiness). It basically creates a financial identity and transaction history, which can be the basis for formal credit scoring in the future.

Unprecedented Scale and Achievements

PMJDY was implemented in a mission mode with scheduled camps and top oversight. The achievements have been record-breaking:

 Mass Account Opening Drive

On the inauguration day, over 1.5 crore accounts were opened nationwide. Bank staff, aided by local officials and volunteers, organized thousands of camps in every corner of the country. Within the first year, over 17 crore accounts were opened, earning PMJDY a Guinness World Record for most bank accounts opened in a week (over 18 million from Aug 23-29, 2014).

Accounts Opened

As of 2025, the scheme has brought over 55 crore individuals into the banking system (this includes new adults as they come of age). This is a dramatic increase from pre-2014, when an estimated 30-40% of households lacked access to banking. Now almost every adult in India can have a bank account.

Deposits and Usage

Initially many Jan-Dhan accounts were zero-balance (no money in them). However, over time, the usage improved. By 2023-24, less than 10% of Jan-Dhan accounts were zero-balance. People began using them to save and transact. Total deposits in these accounts have crossed ₹2 lakh crore, reflecting not only government transfers but also personal savings. The average balance per account has steadily risen.

Rural and Women Focus

About 67% of Jan-Dhan accounts are in rural and semi-urban areas. Women hold roughly 55% of the total PMJDY accounts. This indicates that the scheme successfully penetrated target demographics. Special efforts (like involving local Anganwadi workers, self-help groups) were made to reach women in villages and get them to open accounts.

RuPay Card & Insurance

More than 30 crore RuPay debit cards were issued under PMJDY. Apart from enabling digital transactions, these cards provided the accident insurance cover. There have been thousands of cases where accident victims’ families received the ₹1 lakh compensation due to the RuPay insurance, a benefit they wouldn’t have had otherwise.

Direct Benefits and Emergency Aid

The power of PMJDY accounts was evident during crises. For example, during the COVID-19 pandemic in 2020, the government announced cash relief to 20+ crore poor women (₹500 per month for three months). Thanks to Jan-Dhan, this money was directly credited into their accounts quickly and safely. Similarly, farmers receive ₹6,000 a year under PM-KISAN directly in bank accounts, and Jan-Dhan ensured even small and marginal farmers had accounts to get this benefit.

Major Developments & Extensions

In 2018, PMJDY was extended beyond its initial 4-year phase, with a shift from “every household” to “every adult” (including minors above 10 with guardian’s consent) having a bank account. The focus also shifted to opening zero-balance accounts for every remaining unbanked adult and encouraging usage.

• The OD limits and insurance features were upgraded (as mentioned, OD doubled to ₹10k, accident cover doubled for new accounts).
• Banks were urged to leverage Jan-Dhan accounts for extending credit.

Some public sector banks introduced special micro-loan or OD products for PMJDY customers beyond the basic OD, to help in starting micro ventures.

Technology Use

The Jan-Dhan program piggybacked on technological advances – eKYC using Aadhaar drastically cut down documentation hassles; the digital linking meant that by the 2020s, many Jan-Dhan customers started using UPI and mobile banking (often aided by younger family members or banking correspondents). This helped India’s push towards a digital economy, with inclusive participation (for example, UPI transactions are not just an urban phenomenon; even small merchants in rural areas started accepting UPI QR code payments into their Jan-Dhan accounts).

Challenges and Way Forward

Dormancy & Activation

While much progress has been made, ensuring active usage of all accounts remains a challenge. Some accounts see little activity after the initial incentive (insurance) wears off. Banks and government are working to activate these through continuous engagement, encouraging account holders to make at least a few transactions (even if small) every month.

Financial Literacy

First-time users often need guidance on using ATMs or UPI, and managing finances. Ongoing financial literacy programs are crucial so that having an account translates into effective use. Many rural bank branches and BCs conduct village meetings to demonstrate digital banking and safe banking practices (like not sharing PIN, etc.).

Fraud Prevention

With millions of new entrants to banking, there’s vulnerability to fraud (like phishing calls asking for OTPs, etc.). Customer protection and awareness measures need further strengthening to protect Jan-Dhan customers.

Long-Term Sustainability for Banks

Banks incur costs to maintain these accounts (for example, RuPay card issuance, BC commissions, etc.), and many accounts have minimal balances. The government has provided some compensation, and the hope is as the economy grows, today’s Jan-Dhan customers will become viable customers for banks (taking loans, buying other products). Meanwhile, bundling basic products (insurance, pension) has helped partially monetize these accounts and also benefit customers.

Beyond Access – Usage for Growth

Merely having an account is a starting point. The vision forward is to link these accounts to livelihood opportunities. This could mean enabling small overdrafts to become micro-loans for enterprise, linking account holders to skill development programs and then to bank credit (like Mudra loans), etc. Also, promoting a shift to digital payments even at the last mile (so that every Jan-Dhan account holder can send/receive money easily) will increase account activity and improve their economic integration.