The Pradhan Mantri Jan Dhan Yojana (PMJDY) is a National Mission on Financial Inclusion, launched by Prime Minister Narendra Modi on August 28, 2014, after being announced on August 15, 2014. The scheme was created to solve the problem of limited access to formal financial services, as only about 50% of adults had bank accounts before 2014. Its core objective is to provide universal access to banking facilities, ensuring every unbanked adult has a basic savings bank account, thereby bringing the financially excluded into the development mainstream.
The mechanism of PMJDY centers on opening a Basic Savings Bank Deposit Account (BSBDA), which can be a zero-balance account, meaning no minimum balance is required. Key provisions include the issuance of a RuPay debit card to the account holder. This card comes with an inbuilt accidental insurance cover, which was initially ₹1 lakh but was enhanced to ₹2 lakh for accounts opened after August 28, 2018. Eligible account holders can also avail an overdraft facility of up to ₹10,000 after six months of satisfactory account operation.
The scheme is fundamentally connected to the Direct Benefit Transfer (DBT) mechanism, which routes government subsidies and welfare payments directly into the beneficiaries' bank accounts, eliminating leakages and middlemen. PMJDY accounts serve as the platform for other social security schemes, including the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), and the Atal Pension Yojana (APY). The scheme was initially targeted at every household but was extended in 2018 to focus on covering every unbanked adult. The overdraft limit was also increased from ₹5,000 to ₹10,000 in the same year.