What is Pradhan Mantri Jan Dhan Yojana?

The scheme, which envisages every account holder gets a Repay debit card with a Rs.1 lakh accident cover, will see the nationalised banks target opening of one crore bank accounts.

"There is an urgency to this exercise as all other development activities are hindered by this single disability," he had said in a Twitter post.

By paying benefits directly into bank accounts, the scheme would seek to cut waste and corruption that inflate India's $43 billion subsidy bill, equivalent to more than 2 per cent of its GDP, for handouts of grain, fuel and fertiliser.

The push for greater financial inclusion would also diminish the influence of moneylenders and other informal financing channels who operate outside the ambit of the Reserve Bank of India (RBI), blunting its monetary policy tools.

Benefits of Jan Dhan Yojana

There are many benefits of Jan Dhan account for the Indians:

1. It is a zero balance savings account.
2. Account holder will receive a kit containing cheque book, financial literacy and pass book. However this would vary from bank to bank and account usage.
3. Every account holder will get RuPay Debit card (which is India’s domestic debit card) included in the welcome kit. You can read benefits of rupay card here. RuPay card can also be used for eCommerce transactions.
4. Person will also get Aadhar number on the spot.
5. Family of account holder will get accident insurance cover of Rs. 1,00,000.
6. Life cover of Rs. 30, 000 was declared as an incentive for those opening the account by 26 January 2015. This life cover would be provided by India’s largest insurance company – Life Insurance Corporation of India. Read more about the terms and conditions for availing insurance benefits
7. Overdraft (loan) facility of Rs. 5000 would be provided once account holder completes 6 months and has kept account active.
8. Loan amount would be increased to Rs. 15,000 if repayment is done on-time by the person. Ofcourse this would depend on each bank.
9. Overdraft facility would benefit individuals who had been relying on money lenders charging high interest rates.
10. However in order to avoid overdraft frauds, only Aadhar linked accounts would be eligible for overdraft facility.
11. Farmers dependency on money lenders would reduce as they’ve been relying on money lenders especially in rural areas. Once trapped by money lenders, whole family’s future is ruined.
12. Mobile banking would be available and technical platform will be built connecting all the banks and telecom operators so that customers can access mobile banking facility with ease.
13. Account holder will also get interest on deposit and access to pension and insurance products
14. Money transfer can be done across Indian bank