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PROJECT REPORT
ON
PRADHAN MANTRI JAN-DHAN YOJNA

SUBMITTED TO: BY:MS. MANJULA SHASTRI

B06

SUBMITTED
RIYA SINGHAL =
MEHAK DAWAR= B32
ANKITA SEJWAL= B06
MATTA VAMSI KRISHNA RAJU = B21

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TABLE OF CONTENTS
SERIAL
NO.
1.
2.
3.
4.
5.
6.
7.
8.

PARTICULARS
Executive summary
Introduction
Objectives
Strategies
Mechanism
Challenges
Function
Recommendations

PAGE
NO.
3-4
5
6
7-8
9
10
11-12
13

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EXECUTIVE SUMMARY
1. Current status of financial
Inclusion in the country:
In order to ensure financial inclusion various initiatives were taken up by RBI/ GoI like
Nationalization of Banks, Expansion of Banks branch network, Establishment & expansion of
Cooperative and RRBs, Introduction of PS lending, Lead Bank Scheme, Formation of SHGs and
State specific approach for Govt. sponsored schemes to be evolved by SLBC etc.
RBI vide Mid-term Review of Annual Policy Statement for the year 2005-2006, advised Banks
to align their policies with the objective of financial inclusion. Banks were advised to make
available a basic banking 'No frills' account either with 'nil' or very minimum balances as well as
charges that would make such accounts accessible to vast sections of population. Besides, it has
been emphasized upon by the RBI for deepening and widening the reach of Financial Services so
as to cover a large segment of the rural & poor sections of population.
RBI in the year 2006, with the objective of ensuring greater financial inclusion and increasing
the outreach of the banking sector, decided in public interest to enable the banks to use the
services of NGOs/SHGs, MFIs and other Civil Society Organizations as intermediaries in
providing financial and banking services through use of "Business Facilitator and Business
Correspondent Model".
Census 2011 estimated that out of 24.67 crore households in the country, 14.48 crore (58.7%)
households had access to banking services. Of the 16.78 crore rural households, 9.14 crore
(54.46%) were availing banking services. Of the 7.89 crore urban households, 5.34 crore
(67.68%) households were availing banking services.
In the year 2011, Banks covered 74,351 villages, with population more than 2,000 (as per 2001
census), with banking facilities under the "Swabhimaan" campaign with Business
Correspondents as explained later. However the programme had a very limited reach and impact.
The present banking network of the country (as on 31.03.2014) comprises of a bank branch
network of 1, 15,082 and an ATM network of 1, 60,055. Of these, 43,962 branches (38.2%) and
23,334 ATMs (14.58%) are in rural areas. Moreover, there are more than 1.4 lakh Business
Correspondents (BCs) of Public Sector Banks and Regional Rural Banks in the rural areas. BCs
are representatives of bank to provide basic banking services i.e. opening of basic Bank
accounts, Cash deposits, Cash withdrawals, transfer of funds, balance enquiries, mini statements
etc. However actual field level experience suggests that many of these BCs are not actually
functional.
Public Sector Banks (PSBs) including RRBs have estimated that by 31.05.2014, out of the
13.14 crore rural households which were allocated to them for coverage, about 7.22 crore

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households have been covered (5.94 crore uncovered). It is estimated that 6 Crore households in
rural and 1.5 Crore in urban area needs to be covered.

2. The task at hand:

To provide Bank Account to every household in the country and make available the basic
banking services
facilities i.e. (I) Opening of Bank Account with RuPay Debit Card & Mobile Banking facility,
(ii) Cash Withdrawal & Deposits,
(iii) Transfer, (IV) Balance Enquiry & (v) Mini Statement. Other services are also to be provided
in due course in a time bound manner apart from financial literacy which is to be disseminated
side by side to make citizens capable to use optimum utilization of available financial services.
To provide these banking services banking outlets to be provided within 5 KM distance of every
village. Necessary infrastructure also needs to be placed to enable e-KYC for account opening
and AEPS for withdrawal of cash based biometric authentication from UIDAI data base.
Putting the PSBs and RRBs numbers together implies that about 5.92 crore rural households
are yet to be covered. Considering field level data mismatches in some instances, it is estimated
that there are about 6 crore uncovered households which would need to be covered in the rural
areas.
Assuming a minimum of one account per family, this translates into opening of 6 crore
accounts in villages.
In addition account opening of uncovered households in urban areas would also be required.
These households are estimated at 2.55 crore as per Census, 2011. However, the exact number of
households without bank accounts are not available but estimated to be 1.5 crore implying
opening of about 1.5 crore accounts in urban areas.

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INTRODUCTION
Objective of "Pradhan Mantri Jan-Dhan Yojana (PMJDY)" is ensuring access to various
financial services like availability of basic savings bank account, access to need based credit,
remittances facility, insurance and pension to the excluded sections i.e. weaker sections & low
income groups. This deep penetration at affordable cost is possible only with effective use of
technology.
Hon'ble Prime Minister, Sh. Narendra Modi the on 15 August, 2014 announced "Pradhan Mantri
Jan-Dhan Yojana (PMJDY)" which is a National Mission for Financial Inclusion. The task is
gigantic and is a National Priority. This National Mission on Financial Inclusion has an
ambitious objective of covering all households in the country with banking facilities and having
a bank account for each household. It has been emphasized by the Hon'ble PM that this is
important for including people left-out into the mainstream of the financial system.
The Pradhan Mantri Jan-Dhan Yojana will be the launched on 28 August, 2014, across the nation
simultaneously. It will be launched formally in Delhi with parallel functions at the state level and
also at district and sub-district levels. Camps are also to be organized at the branch level. The
Pradhan Mantri Jan-Dhan Yojana lies at the core of development philosophy of "Sab Ka Sath
Sab Ka Vikas".
With a bank account, every household would gain access to banking and credit facilities. This
will enable them to come out of the grip of moneylenders, manage to keep away from financial
crises caused by emergent needs, and most importantly, benefit from a range of financial
products. As a first step, every account holder gets a RuPay debit card with a ` 1, 00,000/accident cover. Further, they will be covered by insurance and pension products. There is need to
enroll over 7.5 crore households and open their accounts. Earlier efforts by the Government of
India includes setting up a committee on financial inclusion under the chairmanship of Dr. C.
Rangarajan. The committee finalized its report in early 2008. As is evident from the preamble of
the report, the committee interpreted financial inclusion as an instrumentality for social
transformation. "Access to finance by the poor and vulnerable groups is a prerequisite for
inclusive growth. In fact, providing access to finance is a form of empowerment of the
vulnerable groups. Financial Inclusion denotes delivery of financial services at an affordable cost
to the vast sections of the disadvantaged and low-income groups.
The various financial services included credit, savings, insurance and payments and remittance
facilities. The objective of financial inclusion is to extend the scope of activities of the organized
financial system to include within its ambit people with low incomes. Through graduated credit,
the attempt must be to lift the poor from one level to another so that they come out of poverty."

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Mission Mode Objectives

(6 Pillars):
PMJDY to be executed in the Mission Mode, envisages provision of affordable financial services
to all citizens within a reasonable distance. It comprises of the following six pillars:a. Universal access to banking facilities:
Mapping of each district into Sub Service Area (SSA) catering to 1000-1500 households in a
manner that every habitation has access to banking services within a reasonable distance say 5
km by 14 August, 2015. Coverage of parts of J&K, Himachal Pradesh, Uttarakhand, North East
and the Left Wing Extremism affected districts which have telecom connectivity and
infrastructure constraints would spill over to th the Phase II of the program (15 August, 2015 to
15 August, 2018)
b. Providing Basic Banking Accounts with overdraft facility and RuPay Debit card to all
households: The effort would be to first cover all uncovered households with banking facilities
by August, 2015, by opening basic bank accounts. Account holder would be provided a RuPay
Debit Card. Facility of an overdraft to every basic banking account holder would be considered
after satisfactory operation / credit history of six months.
c. Financial Literacy Programme: Financial literacy would be an integral part of the Mission in
order to let the beneficiaries make best use of the financial services being made available to
them.
d. Creation of Credit Guarantee Fund:
Creation of a Credit Guarantee Fund would be to cover the defaults in overdraft accounts.
e. M i c r o - I n s u r an n c e: Top r o v i d e micro- insurance to all willing and eligible persons
by 14 August, 2018, and then on an ongoing basis.
f. Unorganized sector Pension schemes like Swavalamban: By 14 August, 2018 and then on
an ongoing basis.
Under the mission, the first three pillars would be given thrust in the first year.

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STRATEGY FOR
ACHIEVEMENT OF OBJECTIVES

Timeline for Financial Inclusion Plan:

Comprehensive Financial Inclusion of the excluded sections is proposed to be achieved
By 14 August, 2018 in two phases as under:
Phase I (15 Aug, 2014 - 14 Aug, 2015)
Universal access to banking facilities in all areas except areas with infrastructure and
connectivity constrains like parts of North East, Himachal Pradesh, Uttarakhand, J&K and 82
Left Wing Extremism (LWE) districts.
Providing Basic Banking Accounts and RuPay Debit card which has inbuilt accident insurance
cover of ` 1 lakh. Aadhaar number will be seeded to make account ready for DBT payment.
Financial Literacy Programme Phase II (15 Aug, 2015 - 14 Aug, 2018)
Overdraft facility up to ` 5000/- after six months of satisfactory operation / history
Creation of Credit Guarantee Fund for coverage of defaults in A/Cs with overdraft limit up to `
5,000/-.
Micro Insurance
Unorganized sector Pension schemes like Swavalamban
Some of the Phase II activities would also be carried out in Phase I.
In addition, in this phase, coverage of households in hilly, tribal and difficult areas would be
carried out. Moreover, this phase would focus on coverage of remaining adults in the households
and students.

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Strategy for achievement of Objectives:

In order to achieve the above objectives, a broad collaborative strategy with all stake holders is
proposed. It is proposed to encourage Public-Private partnerships. Moreover, inter-department
convergence and synergies will be gainfully utilized. The existing rural infrastructure of post
offices having Gramin Dak Sewaks would be optimally utilized to become Bank Mitr (Business
Correspondent) of the Banks.
One of the key strategies will be deployment of online fixed point Bank Mitr (Business
Correspondent) to deliver basic banking services near to the customer doorstep. There are 1.26
lakh Common Service Centers, out of which only 12,000 are BCs of the Banks.
The strategy is to take forward the Bank Mitr (Business Correspondent) model for expansion of
banking services by modifying it to ensure both operational flexibility and viability of the Bank
Mitr (Business Correspondent). Technological innovations like RuPay card and mobile banking
would be made use of. Banks will use the RBI's scheme for subsidy on rural ATMs and UIDAI's
scheme for subsidy on micro ATMs to augment their resources at the village level.
Convergence with the National Rural Livelihood Mission (NRLM) in rural areas and National
Urban Livelihood Mission (NULM) in urban areas would be sought for in covering each
household with bank accounts. The expansion plans of the Department of Telecom to provide
telecom connectivity in difficult areas would be effectively utilized for the provision of banking
facilities in these areas. Department of Telecom has been requested to ensure that problems of
poor and no connectivity are resolved on priority.

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Challenges identified in the implementation of the Mission:

Telecom connectivity:
The feedback from the Banks is that in tribal and hilly areas of the country, the telecom network
is not reliable and therefore setting up Bank Mitr (Business Correspondent) in these areas and
ensuring opening of bank accounts is going to be difficult. A meeting was held with
representatives of the Department of Telecom (DoT) and BSNL in this regard and it was assured
that the ongoing telecom connectivity problems would be resolved by mutual consultation. It was
also informed that DoT is separately seeking the Government approval to cover all villages in the
North East and difficult areas with telecom connectivity. Banks would also work to utilize the
National Optical Fibre Network (NOFN) when it reaches the Panchayat level.
Keeping the accounts "Live":
It is essential that all Government benefits - Central, State or local should flow to these accounts
as it has been observed that a lot of duplicacy exists in this area and sometimes States have not
followed the service area approach and allocated areas to some banks other than service area
banks creating avoidable confusion. The DBT schemes especially MNREGA need to be pushed
and DBT in LPG needs to be restarted. The list of DBT schemes at present may be seen in
Annexure 6.
Brand awareness and sensitization:
In order to achieve a "demand" side pull effect, it would be essential that there is Branding and
awareness on Bank Mitr (Business Correspondent) model for providing basic banking services,
Banking Products available at Bank Mitr (Business Correspondent) outlets and RuPay Cards.
Customers to be made aware that overdraft of up to ` 5,000/- to be provided in their account is a
credit facility which needs to be repaid in order to get fresh limits and is not a grant.
Commission to Bank on Direct Benefit Transfer (DBT):
A task force on Aadhaar Enabled Unified Payment infrastructure headed by Sh. Nandan N i l e k
a n i i n i t s r e p o r t F e b, 2 0 1 2 recommended that last mile transaction cost of 3.14 % with a
cap of ` 20/- per transaction be budgeted for various EBT, DTS and last mile payments through
Micro-ATMs and ATMs. The commission applicable for DBT should also cover DBTL (DBT of
LPG). MGNREGA may also be included in Direct Benefit Transfer.
Coverage of difficult areas:
Parts of North East, Himachal Pradesh, Uttarakhand, J&K and 82 Left Wing Extremism (LWE)
districts face challenges of infrastructure besides Telecom connectivity. All households in such
areas may not be fully covered under the campaign. Coverage of some of the areas might,
therefore, spill over to Phase-II.

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Launch Function:
a. Simultaneous launch in Delhi, State capitals and Districts
b. Unveiling of the logo and merchandise of the campaign
c. Low cost mobile banking (USSD) display with all telecom providers
d. Highlighting of RuPay Card to be provided to the beneficiaries
Timeline for Implementation:
S.No. Activities Timeline
1) Launch 28/08/2014
2) Coverage of SSAs (Opening of 50,000 Bank Mitr (Business Correspondent) outlets in rural
areas and additional ones as necessary in Urban areas) 10,000 15/08/2014 15,000 (Aggregate
25,000) 30/11/2014 15,000 (Aggregate 40,000) 31/03/2015 10,000 (Aggregate 50,000)
30/06/2015
3) Opening of accounts (estimated at 7.5 crore)
25% 30/11/2014
50% 31/03/2015
75% 30/06/2015
100% 14/08/2015

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RECOMMENDATIONS
COMMISSION YOJNA
MP, MLA & others looking for election tickets should be made
Responsible for opening family account in their constituency
During SSC or HSC, a bank account should be created for every child by the
education board