FinMin may bring cheques, credit cards, higher overdrafts in PMJDY 2.0

The official said that the government believes that these upgrades will also help reduce the number of inoperative accounts

The finance ministry is working on introducing new features under the Pradhan Mantri Jan-Dhan Yojana (PMJDY), including the provision of chequebook issuance and an enhanced overdraft facility, according to sources. 

“Since we have already achieved the basic objective of establishing banking touchpoints for the unbanked population, the next step is to enhance the range of services available to Jan-Dhan account holders,” a senior official said. 

The official further said that the government believes these upgrades will also help reduce the number of inactive accounts. By December 2024, more than one in every five PMJDY accounts had turned inoperative, despite the finance ministry’s push to make them operational by fast-tracking the verification process. This translates into roughly 110 million inoperative accounts. 

Launched by Prime Minister Narendra Modi on August 28, 2014, PMJDY aims to provide universal access to banking facilities for all households across the country. 

The official further indicated that the government is exploring the possibility of introducing low-value credit cards with a small credit limit for eligible Jan-Dhan account holders in the future. 

“We have already achieved our main objective of bringing people into the banking system. Now, we are looking to take the next step forward by adding more features to the scheme. We are also considering increasing the overdraft limit, but these proposals are still under discussion with stakeholders, including banks and microfinance institutions,” the official added. 

An email query sent to the finance ministry remained unanswered until the time of going to press. 

  Public-sector banks (PSBs) have performed well when it comes to opening new PMJDY accounts. As of December 2024, Uco Bank exceeded its 2024-25 target, achieving 1 million accounts, or 110 per cent of its target. Punjab National Bank, Bank of Baroda, and State Bank of India also performed well, reaching 98 per cent, 89 per cent, and 86 per cent of their targets, respectively. In total, banks collectively opened 23.6 million accounts, or 79 per cent of the overall target of 30 million. 

“Many recipients may not even be aware of the benefits available to them under PMJDY, leading to a lack of account usage. Once funds are deposited, many beneficiaries withdraw the money immediately, rendering the accounts inactive. These factors contribute to the high number of inactive accounts,” said Subhash Chandra Garg, former finance secretary of India. 

According to government data, total deposits under PMJDY accounts stood at ₹2.31 trillion as of August 2024, with an average deposit of ₹4,352 per account. 

In June 2024, Business Standard reported that the finance ministry had instructed PSBs to activate inoperative PMJDY accounts. “We have been directed to focus on inactive PMJDY accounts as part of our financial inclusion efforts,” said a senior banker. 

“Most PMJDY accounts are primarily used for direct benefit transfers. While we have improved banking penetration, there is still a lack of engagement with other financial instruments,” said Charan Singh, chief executive officer and founder director of EGROW Foundation. 

Widening the net 

*  New tools target 110 million dormant Jan Dhan accounts 

  *  Govt explores possibility of introducing low-value credit cards

  *  In 2024, PSBs collectively opened 23.6 million PMJDY accounts

  *  Total deposits under PMJDY accounts stood at ₹2.31 trillion as of August 2024