[Banking] PM Jan Dhan Yojana: Salient Features, Benefits, Limitations & truckload of criticism

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Mrunal's Economy Course
  1. Prologue
  2. Disturbing numbers
  3. PMJDY: Salient Features:
  4. Jan-Dhan: Benefits, Pro-Arguments
  5. Criticism / Anti-Arguments
    1. Multiple accounts to get more insurance
    2. Money laundering
    3. Insurance thuggary in small fonts
    4. BCA model is EPICFAIL
    5. DBT Epicfail => vicious cycle
  6. Mock Questions


Topics part of the [Current] series

  • August: scheme launched
  • September week3: Rajanbhai finds faults in Jan Dhan scheme while speaking in a seminar.  Taking cue from him, all the columnists have jumped in a competition – who can criticize this scheme more?

Disturbing numbers

Lack of financial inclusion in India
Only 59% Of Indian households have bank accounts (Census 2011)
50% Of the bank accounts are not operated at all. Most probably those accounts opened part of MNREGA and other campaigns.
~46,000 Villages have bank branches. (total villages are above 6 lakhs.)
3.3 lakh Villages have Banking Correspondent Agents (BCA) . But this model is epicfail, we’ll see it further in this article.
34% is the average loan interest charged by local money lenders.
55% Of Rural Dalit families have to borrow money from  local moneylenders / Shroffs.
  • Is the average loan-interest rate charged by Private microfinance institutions (MFIs).
  • by 2010, Microfinance agents even started ‘goondagiri’ to recover loan money, and this model began to decline.

It doesn’t mean Government and RBI haven’t nothing. Since independence, they have launched many initiatives for financial inclusion- Bank Nationalization, Regional Rural banks, cooperative banks, Banking correspondence agent, Swabhiman, Swavlamban, Microfinance, No-frills account, 25% rural branch rule, Bharatiya Mahila Bank and so on.
You can read more details about them under Mrunal.org/economy – particularly under the [Nachiket Mor] Committee article series. Anyways, moving on:

PMJDY: Salient Features:

Who Department of Financial Services under Finance ministry
When 15th August 2015
Purpose se Financial inclusion
Target Open bank accounts for 7.5 crore families in one year.
motto Meraa Khaataa Bhagya Vidhata
Prime minister Jan Dhan Yojana PM-JDY features pillars benefits

PMJDY scheme has 6 pillars in two phases


Phase 1: Three pillars (2014 to 2015, 15th August)
1.Service area
  • Country will be divided into sub-service areas (SSA)
  • Each SSA will cover 1000-1500 households
  • Each household will have a banking outlet within 5 km distance.
  • Each household will have atleast one bank account.
  • Even minors of 10 years and above age, can open.
  • With a Rupay debit card
  • Rs. 1 lakh accident cover per account.  Conditions:
    • 1 individual and multiple bank accounts = still maximum 1 lakh cover
    • 1 family, husband-wife separate accounts= each gets 1 lakh cover.
  • If you open account before 26th January 2015, you’ll get additional Rs.30,000 life insurance cover.
  • If your good credit history for first 6 months=>Rs.5,000 overdraft facility. If same family has multiple accounts then only 1 account gets this benefit- first preference to woman’s account.
3.Literacy Financial literacy programmes to make juntaa aware of benefits of saving and investing money properly.


Phase 2: Next Three pillars (2015 to 2018)
4.CGF Credit guarantee fund- to cover losses in overdrafts. (Because some villagers might use overdraft for desi liquor and then default in repayment)
5.Insurance If JDY account holder is interested, he can buy micro insurance product.
  • Earlier Government launched Swavalamban Yojana to make unorgnized sector workers join NPS scheme.
  • Those people will get NPS-pension directly in these Jan-Dhan accounts.
  • Government will also try for direct benefit transfer (DBT) i.e. sending scheme-subsidy money directly to beneficiaries’ jan-dhan accounts.

How to open Jan Dhan account?

  • if you already have a bank account, no need to apply again. Just get a “ruPay” debit card, and you get automatically enrolled into this system.
  • Jan Dhan accounts are put under Core Banking solution (CBS) platform, therefore it can be transferred from one branch to another, as per your request.
  • if you don’t have any account, open a new account with any one of the following documents: Aadhar Voters card, Driving licenses, PAN, Passport etc.

Small account

  • If a person doesn’t have any official documents, still bank can open its account- with just his photo and signature.
  • But such account will be called “Small account”. RBI has put following restrictions on them
  1. not more than 1 lakh rupee loan per year
  2. cannot withdraw more than 10,000 rupees per month.
  3. cannot deposit more than 50,000 rupees in account
  4. Valid for 12 month only.

Jan-Dhan Yojana: Benefits, Pro-Arguments

  • Will aid financial inclusion, will rescue villagers from the clutches of evil money lenders. You can cite those ‘disturbing numbers’ to justify your “pro” stand in the group discussion (GD) when other candidates (brainwashed by theHindu) try to create fish market in GD by criticizing everything under the sun.
  • Could boost household savings rate similar to Bank Nationalization in 1960s.
  • Direct Benefit transfer (DBT) money will flow into those accounts (and from there again as “loans” to other needy people.) Thus savings will turn into capital. Subsidy leakage will decline.
  • Will increase Insurance penetration.
  • Overdraft only after monitoring performance => win-win, rare chances of NPA/defaults.

Jan-Dhan Yojana: Criticism / Anti-Arguments

Prime Minister’s Jan Dhan Yojana (PMJDY) will fail because:

RBI Raghuram Rajan against PM Modi Jan Dhan Yojana

Rajan’s worry: money laundering and Multiple Accounts in Jan Dhan Yojana

Multiple accounts to get more insurance

Rajanbhai is concerned that:

  • Jan Dhan scheme gives Rs. 1 lakh insurance on each account.
  • To get large insurance or overdraft facility, same person might open multiple accounts in multiple banks- one with Aadhar card, one with PAN card, one with voters card.
  • Sarkaari banks may also overlook nuisance, in order to meet their ‘targets’. Recall the earlier article on PJ Nayak Committee. Since Government is the majority shareholder in sakaari banks=> Chairman and board of directors have pressure from Government => they pressurize bank staffs to enroll maximum bank accounts so that Modi can brag about it during his Madison square speech.
  • RBI suggestion: banks should establish a single information sharing system to weed out such multiple accounts.
  • Counter argument: State bank of India has made clear guidelines that even if multiple accounts of same person, he will get only 1 lakh cover. And since all accounts are put under Core banking solution (CBS) platform = duplication / mischief unlikely.

Money laundering

Rajanbhai is also worried that JDY accounts could be used for money laundering and Hawala operations.

  • Hawala Operators can spilt the whole amount (say 1 crore) into several small units into several JDY accounts
  • Then send money overseas without coming under the watchful eyes of Income tax or Enforcement directorate.
Money mules
  • Just like those “Drug mules” who ingest condom packed with narcotic drugs and deliver it to other country via airplanes.
  • Money mules= individuals with JDY accounts, who facilitate Hawala operators to send money via their account.

Insurance thuggary in small fonts

  • Jan Dhan gives you free accident insurance cover worth Rs.1 lakh.
  • But there is a secret condition- you must use RuPay debit card atleast once every 45 days.
  • This is not be possible for poor families in remote tribal areas. So, they’ll lose the benefit due to inactivity.

Why this secret condition?

  • Because insurance money doesn’t fall from sky. Even if you’re getting it for free, still someone has to pay the premium, right? In this case, Modi is not paying the premium. (Because he wants to keep fiscal deficit low).
  • Your premium is paid by NPCI. National Payments Corporation of India owns the rupay card system. Therefore, they want you to frequently use the card.


Jan Dhan Yojana BCA problem

Just like a coaching walla doesn’t finish syllabus if students are less, BCA will run away if commission is low

  • Jan Dhan aims to divide entry country into sub-service areas (SSA)
  • Within those SSA, each household will have a banking outlet within 5 km distance.
  • Since banks cannot open branches everywhere, Government aims to achieve this target via Banking Business Correspondence Agents (BCA) or Bank Mitra.

What’re the Problem with BCA model?

  1. They get 2% commission on each transaction. Monthly income ~2000 rupees.
  2. As a result, they quickly lose interest in this game, being some other side jobs. So, BCA are never available when customer needs them. 47% of the BCA are untraceable. (says RBI survey)
  3. Allegations of malpractice. For example
    1. For opening new account, they ask separate 100 rupees as ‘service charge’ (although no bank or RBI has authorized such payment).
    2. Some BCA ask separate commission / bakshish from illiterate villagers for withdrawing money from account (beyond the official 2%)
    3. For loan processing too, they demand separate commission, outside bank’s knowledge.

Jan-Dhan relies on the failed BC model=> Jan dhan will fail as well.

DBT Epicfail => vicious cycle

PMJDY aims to make all scheme-subsidy payments directly to Jan-Dhan bank accounts. But this Direct benefit transfer (DBT) itself is a failure because:

  • Aadhaar project is yet to cover all residents.
  • Aadhar project facing court cases, because UIDAI is not a statutory body, backed by any law.
  • UPA Government had to admit in court that “Aadhar-number” is not compulsory get Sarkaari-scheme benefits=> Juntaa won’t be motivated to get Aadhar cards=> Jan Dhan will have trouble transferring money.
  • AT BCA level, Biometric authentication (finger scan) = showing 25-30% errors. So citizens will have difficulty in withdrawing money even if they’ve Aadhar card.
Now if you join the dots
Dot-A BCA will get 2% commission on transaction
Dot-B DBT will fail = junta won’t get much money in Jan-Dhan accounts and there are fingerprint problem=less transactions.
  • Prime Minister Modi believes in free-market economy and minimum governance.
  • Similarly state governments too, will reduce their subsidy burden to comply with FRBM act.
  • Gradually, less subsidies on food, fertilizer and fuel. So, even if DBT works fine, juntaa won’t get much money in their accounts =less transaction= less commission to Bank Mitra.
  • Join Dots A+B+C = BCA (Bank Mitra / Banking correspondence agent) will get very low commission, he’ll lose interest and service quality will declining- just like those coaching wallas, who don’t finish syllabus if batch strength is low.
  • Bad customer experience= People can’t use Ru-pay cards every 45 days = insurance protection also gone = further negative experience = Jan Dhan accounts will become dormant. Households will again resume saving money in gold or wasting on desi liquor.

Misc. Anti arguments

  1. JDY is just old wine (no frills account) in new bottle (Jan Dhan Account). when earlier scheme didnot improve financial inclusion, there is no chance, new one will succeed.
  2. Systematic and well planned reforms necessary- as recommended by Nachiket Mor Committee- payment banks, wholesale banks, UEBA etc. But Government is in haste to capture media attention.


  • Rural incomes will improve because of other Government schemes- skill India, make in India etc.
  • So, People will use bank accounts, even if Government gives them no subsidies / DBT / MNREGA.
  • With penetration of mobile, internet banking and digital literacy, people will be able to make transactions online. BCA will become irrelevant.

Therefore, even if Aadhar card, DBT or BCA model fails, it is not necessary that Jan Dhan will automatically fail.

Mock Questions about PM Jan Dhan Yojana


  • In bank and RBI exams- MCQs about trivial facts and figures. Example-
    • On which day was JDY launched?
    • How many accounts will be opened in one year?
    • How much overdraft offered?
    • What is the motto of this scheme etc.
  • In CSAT-2015: they’ll give you a few statements about JDY’s salient features. You’ll have to find correct of them. Only 1 and 2; only 1, 2 and 4….and so on.


Answer following in 200 words each

  1. “Though ambitious, PMJDY faces certain operational difficulties.” Elaborate
  2. Discuss the initiatives taken since the independence, for the financial inclusion of rural families.
  3. Enumerate the salient features and benefits of PMJDY.

Interview/ GD: PMJDY- pro and anti-arguments. And what steps should be taken to ensure its success.

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167 Comments on “[Banking] PM Jan Dhan Yojana: Salient Features, Benefits, Limitations & truckload of criticism”

  1. Sir,
    Just for curiosity from where did you get truck load of information.
    I want to study about this matter in detail.
    Plz tell me the source of this information.

  2. Sir,
    Just for curiosity from where did you get truck load of information.
    I want to study about this matter in detail.
    Plz tell me the source of this information.
    Thanks in advance.

  3. there is a que about cds exam n i m confused abt dis plzz reply if anybody knows…there are 120 ques and 100marks then wat about maks distribution each que carry equal mark..

  4. To all user any one knows about nicl , any recruitment .

  5. failed in first attempt but not get disheartened…pls guide how to start preparation… presently at 28, still 4 attempts to go….which basic books should i start with..

  6. how to study sir after getting bank hectic job

  7. thnks 4 giving suggestions regards preparations

  8. Congrats to everyone who made it to mains .all d best .
    Though I haven’t cleared wat m really surprised to see the roll no ahead of me like mine was 41 n d one m talking abt was 40 in d list.but I wonder how can this happen cause he / she was absent.:( infact two seats in front of me were vacant.

  9. Sir,
    I wanna know which months’ current affairs to prepare for prelims 2015 and how to deal with the hindu for mains 2015-editorials etc
    M done with my ncerts

  10. Congratulations to all MY FRIENDS ,who successfully completed prelims-2014


  11. after a lot struggle I succeeded to open a jan dhan yojna account in hdfc bank in delhi.Now when I went their to deposit money they are telling that I can only deposit Rs10,000 in my account in a year.Is it true or else they are making me fool.and if it is true then what is the use of this account where we can’t deposit money.

    1. a days transaction amount cannot be greater than 10000/- a day
      log complaint with local branch or get the contact from bank website

  12. thank you a lot sir
    this topic helped me a lot

  13. hello sir
    i need ur help regarding geography -physiography of INDIA

  14. sir u have said that if husband and wife have seperate accounts they would get benifited individually .but at the sametime u have mentioned that if a family has multiple accounts only one account will get benifitted.can u please clarify

    1. can i register my account number which is already opened to the said PMJDY? if yes how and where will i submit ? is there facility of submitting through net without rushing to the bank

  15. Sir, I’ll love to get guidance from u

  16. I went to SBI Bank Bhopal to convert my running saving acc. by PMJDY Acc. but they refused to do so neither they telling me the elgibility 4 opening the PMJDY Acc. I don’t understand then 4 whom the PM is giving scheme benefits if not to a unemployed like me.Then how i will get the returned(expected) blackmoney which PM told to induced in the Indian Citizens Bank Acc.

    1. brother PMJDY is basically for those people who doesnt have access to banking yet . Those people who are still not able to access the banking service..the target group is BPL and people who are daily wages workers,labourers,painters,artisans etc.
      to provide them direct benifits under various govt schemes to directly to there accounts avoiding the corruption in between.
      U already hold a saving account thats why bank has refused to open another saving account for you under this scheme.

  17. Sir, my name is a sharanabasapp i am work is a bc, csp or bank mitra only i am a worker not a emplay. Only work work work not a sallary or payment or commision. Please take you my requst sir. Ima bc in pkgb hattikuni pr// Bandalli, tq/dt// yadagir, state//karnataka, my csp id is a 5852020013.

  18. Sir ur explanation is simple. one can get it easily.. keep it up sir.. cn u guide me for how to start with GS3 ie economy and geography optional………..
    Love u sir

  19. I succeeded to open a Jan Dhan Yojna Account in State Bank of India at Khardah, Kolkata-700117.Now when I went their to deposit money they are telling that I can only deposit Rs10,000/- in my account in a year. Is it true or else they are making me fool. if it is true then what is the use of this account where we can’t deposit money. Is there any provision to convert this account into Savings Bank Account in the same bank otherwise make sure that there should not be any restriction or ceiling for deposit .

  20. I want Become a Banking correspondence agent for Jan dhan yojana.. pleas help us what is the procedure

  21. Sir, I have a question for which I could not find sufficient points to write. The question is- Inspite of criticisms can Jan Dhan Yojana achieve what other Financial Inclusion schemes from RBI and Govt. earlier have failed to do ? If yes then why and how? If not then what should be the approach ?
    Kindly help.

  22. after opening account if we want to shift to other village or place can we transfer the account and can we avail the benefits

  23. sir,what is benefits to students & unemployed persons

  24. Sir mai prathmabank Ujhari branch(Amroha)me BCA hu .pmjdy ke antrgat bankmitra ki salary 5000/month kab take hojayegi tell me.abhi to 1000/month mil rhi hai.

  25. Sir,my self Ankit Agrawal ,and I want to open c.s.p.
    So I met the b.c.
    He take all the papers and processing it
    And after that he gave me a file
    For completing the police verification and s.b.I. manager satisfaction
    I did this
    And after a long time
    (5 months) i dont get any response after that
    Plz give me some guidance, i will be very thank ful to u.

  26. Dears, I am one of the banking correspondent agent (BCA) of Odisha Gramya bank (odisha).
    I think the peoples are opening bank accounts easily under prime minister Jan dhan yojana and but this scheme was also past but that hasn’t got popularity.
    As a BCA, I am getting just 3000 per month, it’s more difficult to alive in this days for not only me but also for all the BCA in India.
    So i request to the government of india to increase our salary then we will be more happy and interest to do more.
    Thanks, please reply you all

  27. sir’ l am from Jammu and Kashmir & I also the CSP but we r not getting any salary what is the reason?

  28. Thank You very much sir for ‘EASY TO DIGEST’ Elaboration :)

  29. Dear sir.in pmjdy :salient feature, the date of the scheme is 15 Aug 2015 but as far as I know the date is 15 Aug 2014 ( may be I am not right)

  30. sir,I enrolled 1600+ account under BGVB and deposit @ wdl is done regular basis .but i could not get salary properly in every month.what is the reason?

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