PM launches Pradhan Mantri Jan-Dhan Yojana; About 1.5 crore accounts expected to be opened on day one

New Delhi, 28 August 2014

Financial Inclusion is one of the top most priorities of the Government. Exclusion of a large number of people from any access to financial services inhibits the growth of our country. There is evidence that financial inclusion is crucial to poverty reduction.

The earlier campaign on financial inclusion started in 2011 had a limited objective. The focus was on the coverage of villages with population of 2000 or more with banking services. Coverage of individual households with bank accounts was not the focus. Out of the 5.92 lakh villages in the country, only 74000 villages could be covered.

The Prime Minister launched the Pradhan Mantri Jan DhanYojana at a National level function here today. Besides the launch function at Delhi, simultaneous launch functions of the Yojana were also held in the Capital and other major centres of the State and at all district Headquarters.

The Finance Minister Shri Arun Jaitley, Minister of State for Finance Ms Nirmala Sitharaman, Principal Secretary to Prime Minister Shri Nripendra Misra, Cabinet Secretary Shri Ajit Seth, Governor, RBI Dr Raghuram Rajan and other senior dignitaries were present on the occasion.

The Prime Minister said that the target to cover 7.50 crore households with at least one account under the Yojana will be achieved by 26th January, 2015. Elaborating the benefits under PMJDY, the Prime Minister said this was not a mere bank account, but had other benefits including an RuPay debit card, Rs 1 lakh accident insurance cover, and an additional Rs. 30,000/- life insurance cover for those opening bank accounts before January 26th, 2015. Speaking on the occasion, the Finance Minister said that efforts will be made to ensure that no household is left without a bank account.

About 1.5 crore accounts are expected to be opened on the day of the launch and 77,892 camps are being organized for this purpose. Preparatory work was started from 16/08/2014 and stepped-up from 25/08/2014.

Banks have been asked to organize mega account opening camps on the day of the launch and thereafter at each rural and urban branch in the district in coordination with District Authorities for opening of bank accounts. Every Saturday has been fixed for special campaign from 8.00 AM to 8.00 PM.

The major shift in this programme is that households are being targeted instead of only villages as targeted earlier. Moreover both rural and urban areas are being covered this time as against only rural areas targeted earlier. The present plan pursues digital financial inclusion with special emphasis on monitoring by a Mission headed by the Finance Minister.

Financial literacy has been accorded high priority under the Yojana. A standardized Financial Literacy material has been prepared in vernacular languages to create awareness about the Yojana.

A platform has been built by National Payment Corporation of India (NPCI) that connects all the banks and all the telephone network operators in the country. The platform helps a customer or any bank to access his/ her account with any type of mobile handset. Costly smart phone is not necessary. Even with an ordinary handset, services like balance enquiry and money transfer is possible. The business correspondent of banks can also use the services to support cash deposit and cash withdrawal. 26 Public Sector Banks and 3 Private Sector Banks have joined this platform. Other would also join soon. Full range of banking services would now be possible thorough ordinary mobile phones.

The Yojana will be implemented in two phases:-

Phase-I from 15th August 2014:

-Universal access to banking facilities for all households across the country through a bank branch or a fixed point Business Correspondent (BC) called Bank Mitra within a reasonable distance except areas with infrastructure & connectivity constraints.
-To cover all households with atleast one Basic Banking Account with RuPay Debit card having inbuilt accident insurance cover of Rs.1 lakh. Further an overdraft facility upto Rs.5000 will also be permitted to Adhaar enabled accounts after satisfactory operation in the account for 6 months.
-Financial literacy programme which aims to take financial literacy upto village level.
-The Mission also envisages expansion of Direct Benefit Transfer under various Government Schemes through bank accounts of the beneficiaries of.
-The issuance of Kisan Credit Card (KCC) as RuPay Kisan Card is also proposed to be covered under the plan.

Phase-II :

-Providing micro –insurance to the people.

-Unorganised sector Pension schemes like Swavalamban through the Business Correspondents.

The Yojana is being monitored in a Mission Mode with the Finance Minister being the Head of the Mission.

It is estimated to cover 7.50 crore households with at least one account under the Yojana and also a large number of dormant accounts would be activated

Electronic Transfer of subsidies under various schemes of Government would be enabled.

Prime Minister speaks

The Prime Minister, Shri Narendra Modi, today declared the beginning of the end of financial untouchability in India, with the opening of an estimated 1.5 crore bank accounts across the country, in an exercise unprecedented in scale in economic history.

Formally launching the Pradhan Mantri Jan Dhan Yojana (PMJDY) at a function broadcast across the nation from Vigyan Bhawan in New Delhi, the Prime Minister described the occasion as a festival to celebrate the liberation of the poor from a poisonous cycle. (Vish-chakra se gareebon ki aazaadi ka parv)

Expressing satisfaction at a number of records being broken today, the Prime Minister said the nationwide success of the enrolment drive today would give confidence not just to the officials of the Department of Financial Services and banking sectors, but also to officers across the Union Government, that they can successfully achieve the goals that they set for themselves. “Never before would insurance companies have issued 1.5 crore accident insurance policies in a single day. Never before in economic history would 1.5 crore bank accounts have been opened in a single day. Never before has the Government of India organized a programme of such scale – over 77,000 locations – with the participation of so many Chief Ministers, Union Ministers, Government and bank officials.” He said the success is an inspiration for achieving new heights.

The Prime Minister said that though the initial target of PMJDY was to open bank accounts for 7.5 crore families in one year, he had exhorted the concerned officials to complete the task before the next Republic Day.

Elaborating the benefits under PMJDY, the Prime Minister said this was not a mere bank account, but had other benefits including an RuPay debit card, Rs 1 lakh accident insurance cover, and an additional Rs. 30,000/- life insurance cover for those opening bank accounts before January 26th, 2015. He said the account performance would be monitored and overdraft facility would be given. The Prime Minister said he had sent 7.25 lakh bank employees, exhorting them to help reach the target of 7.5 crore bank accounts, and bring freedom from financial untouchability.

The Prime Minister referred to the five beneficiary couples who had received account opening kits in today`s event at Vigyan Bhawan, and said the ladies appeared to have dressed for a festival. He said they knew that there could be no bigger festival than the opening of a bank account for empowering women.

The Prime Minister said when banks were nationalized in 1969, it was done with the objective of bringing people into the economic mainstream. But that objective had not been achieved till date. After 68 years of independence, not even 68% of India`s population had access to banking, he added. He said it is easy for the rich to get a loan at low interest rates. But the poor are forced to seek loans from money-lenders at five times the rate charged to the rich. Is it not the responsibility of the banking industry to provide banking access to the poor, the Prime Minister asked.

The Prime Minister illustrated his point through the example of a mother saving money and being forced to hide it somewhere within the house. He said the bank officials who had opened an account for such a mother, had been blessed today.

He said a breakthrough was required to overcome the vicious cycle of poverty and debt, and that breakthrough had been achieved today. He said there were similarities between the poor getting access to mobile telephones, and getting access to debit cards. They both had the effect of instilling confidence and pride among the poor, he added.

The Prime Minister referred to the ancient Sanskrit verse: Sukhasya Moolam Dharma, Dharmasya Moolam Artha, Arthasya Moolam Rajyam – which puts the onus on the state to involve people in economic activity. “This Government has accepted this responsibility,” the Prime Minister said.

The Prime Minister said Indians had a habit of saving, and thinking about the future of their children.

The Prime Minister also distributed awards to winners of the Name and Logo contest for this scheme. He observed that those who won prizes were predominantly from non-Hindi speaking states, but had won prizes for coining a name and slogan in Hindi. This is an example of national integration, he said.

Speaking on the occasion, the Finance Minister said PMJDY would be taken forward in Mission Mode, and the first target of reaching 7.5 crore unbanked families would be achieved by January 26th, 2015.

The Minister of State for Finance, Smt. Nirmala Sitharaman, said the lady of the house had been given priority in the PMJDY. She said this scheme would touch the lives of everyone in a positive and constructive way.