PM JANMAN Scheme, Objectives, Focus Areas and Challenges(GS2)

Objectives

1. Universal Access to Banking Facilities: Ensure that every household in India has access to banking services and at least one bank account.
2. Financial Literacy: Enhance financial literacy among the economically weaker sections to enable them to make informed financial decisions.
3. Direct Benefit Transfer (DBT): Ensure seamless transfer of government benefits and subsidies directly into the beneficiaries' bank accounts.
4. Insurance and Pension Schemes: Provide accidental insurance cover, life insurance cover, and pension schemes to ensure social security.
5. Credit Facilities: Facilitate access to credit facilities for the poor and underprivileged to promote entrepreneurship and economic activities.

Focus Areas

1. Bank Account Opening: Opening zero-balance bank accounts for unbanked individuals and households.
2. Rupay Debit Card: Issuance of Rupay debit cards to account holders to enable easy access to banking services.
3. Financial Literacy Programs: Conducting financial literacy programs to educate people about financial products and services.
4. Micro Insurance: Providing accidental insurance coverage of Rs. 1 lakh and life insurance coverage of Rs. 30,000 for eligible beneficiaries.
5. Overdraft Facility: Offering an overdraft facility of up to Rs. 10,000 to account holders based on their account performance and transaction history.
6. Direct Benefit Transfer (DBT): Ensuring that government subsidies and benefits reach beneficiaries directly through their bank accounts to reduce leakages and corruption.

Challenges

1. Infrastructure Issues: Lack of banking infrastructure, especially in remote and rural areas, poses a challenge to achieving universal financial inclusion.
2. Digital Literacy: Low levels of digital and financial literacy among the target population hinder the effective utilization of banking services.
3. Operational Challenges: Banks face operational challenges in opening and managing a large number of new accounts, including verification of documents and KYC norms.
4. Dormant Accounts: Many accounts opened under the scheme remain inactive, with little or no transactions, which affects the overall effectiveness of the program.
5. Awareness and Trust: Building trust among the rural population in banking systems and creating awareness about the benefits of the scheme is a significant challenge.
6. Technological Barriers: Ensuring reliable internet and mobile connectivity in remote areas to facilitate digital banking transactions is a persistent issue.
7. Sustainability: Ensuring the long-term sustainability and maintenance of accounts, particularly in terms of transaction activity and minimal balance requirements, is crucial for the scheme's success.

Despite these challenges, the PMJDY has made substantial progress in increasing financial inclusion in India, with millions of bank accounts opened and a significant amount of funds deposited. The scheme continues to evolve to address the emerging needs and challenges in achieving comprehensive financial inclusion.