JAMMAI: Empowering India Financially

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serialises that focuses on the development in . An initiative of the present government, it’s an ambitious project. We hope that the blueprint on paper matches the political will of the Modi government. Here’s the first part of the six-part article; Anirban reports.

JAM or PMJDY, Aadhar and Mobile are taking the development of India to new heights. However, JAMMAI is different and an extension of JAM. Here, JAMMAI stands for

  1. Jan Dhan Yojna– It is the concept of financial inclusion, along with a proper insurance, also known as the Pradhan Mantri Jan Dhan Yojana (PMJDY).

  2. Aadhar Card– It is a unique index of a person involved in direct benefit transfer (DBT).

  3. Mobile– It is a handset for receiving vernacular messages, based on geographical location.

  4. MGNREGA– A social scheme that guarantees unskilled labor guaranteed minimum wages.

  5. Agro Card– Soil Card or the Crop Card that help a farmer produce the best of the rotating crop schedule.

  6. Index of Economic Strata based on economic and social conditions for labour migration.

We will dwell on each of the above mentioned topics in the JAMMAI series and elaborate on it. Here’s the first topic, PMJDY.

Pradhan Mantri Jan Dhan Yojana (PMJDY) is a national mission for financial Inclusion to ensure access to financial services, namely savings and deposit accounts, remittance, credit, insurance, and pension in an affordable manner. This financial inclusion campaign was launched by the Prime Minister Narendra Modi, on August 28, 2014. He had announced this scheme during his first Independence Day speech on August 15, 2014.

PMJDY is a social welfare scheme started in 2014, which allows direct transfer of subsidies, wages, direct benefits in terms of money, after an account is opened at zero balance involving minimal overdraft. Till December 31, 2015, 19.84 crore accounts were opened. The total number of deposits were 29,225.56 crore, 9.23 crore were made, 2.96 crore Jeevan Jyoti Bima Policies were completed. PMJDY focuses on coverage of households as against the earlier plan that focused on coverage of villages.

It focuses on coverage of rural as well as urban areas. The earlier plan targeted only villages above 2000 population, while under PMJDY the entire country is to be covered by extending banking facilities in each sub-service area consisting of 1000 –1500 households such that facility is available to all, within a reasonable distance, say about 5 Km.

As stated earlier, PMJDY focuses on coverage of households as against the earlier plan that focused on coverage of villages. Its salient feature is that it dwells on coverage of rural as well as urban areas. The mobile number of the account holder is entered in customer’s account in Core Banking System (CBS) by the bank on the basis of information given in the account opening form. Also, for existing accounts, banks permit seeding through ATM, SMS from registered mobile, net-banking or on making a request in the branch (there may be variations depending on the bank). Overdraft facility up to Rs. 5000/- would be available to an account holder of PMJDY, per household, after six months of satisfactory conduct of the account. To avoid duplication Aadhaar number will also be required. If Aadhaar number is not available then bank would seek declaration from the beneficiary.

(i) If Aadhaar Card/Aadhaar Number is available then no other documents is required. If the address has changed then a self certification of current address is sufficient.

(ii) If Aadhaar Card is not available, then any one of the following officially valid documents (OVD) is required: voter ID card, driving license, PAN card, passport and NREGA Card. If these documents has the address of the account holder, it would serve both as a proof of identity and that of the address.

(iii) If a person does not have any of the OVD mentioned above, but is categorised as ‘low risk’ by the bank, then he/she may open a bank account by submitting any one of the following documents:

a) Identity Card with applicant’s photograph issued by the central / state government departments, statutory/regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks and public financial institutions;

b) Letter issued by a gazette officer, with a duly attested photograph of the person. Reserve Bank of India (RBI) vide its Press Release dated 26.08.2014, has further clarified, “Those persons who do not have any of the ‘officially valid documents’ can open ‘Small Accounts’ with banks. A ‘Small Account’ may be opened on the basis of a self-attested photograph and putting his/her signatures or thumb print in the presence of an officials of the bank. Such accounts have limitations regarding the aggregate credits (not more than Rupees one lakh in a year), aggregate withdrawals (nor more than rupees ten thousand in a month) and balance in the accounts (not more than Rupees fifty thousand at any point of time). These accounts would be valid normally for twelve months. Thereafter, such accounts would be allowed to continue for a further period of twelve more months, if the account holder provides a document showing that he/she has applied for any of the OVD, within 12 months of the opening the small account.

Special benefits attached to the scheme are:

  • i. on deposit.
  • ii. Accidental insurance cover of Rs.1.00 lakh.
  • iii. No minimum balance required. However, for withdrawal of money from any
  • iv. Life insurance cover of Rs.30,000/-
  • v. Easy Transfer of money across India
  • vi. Beneficiaries of government schemes will get direct benefit transfer (DBT) in
  • vii. After satisfactory operation of the account for six months, an overdraft
  • viii. Access to pension, insurance products.


What about people who already have a Bank Account?

No grants are given under PMJDY. You only get an accident insurance cover of Rs 1 Lakh and a medical insurance cover of Rs 30,000. There are also no withdrawal limits on your savings account. An overdraft will be made available only after six months if your account is found to be active and has a minimum balance.

Conditions to avail Insurance under PMJDY

  •  The insurance is given along with the RuPay Debit Card and only if your card is active,will your insurance claim be honored.
  •  The RuPay Card will be considered active only if you have swiped it within the stipulated time limit of 45 days before making the claim. Thus, to keep your account and card active you will be required to use it at-least once a month.

The various phases of the ambitious scheme are:

Phase-I (15th August, 2014-14th August, 2015)

  •  Universal access to banking facilities
  •  Providing Basic Banking Accounts with overdraft facility of Rs.5000 after six months and RuPay  Debit Card with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan Card
  •  Financial Literacy Programme

Phase-II (15th August 2015-15th August,2018)-

  •  Creation of Credit Guarantee Fund for coverage of defaults in overdraft A/Cs
  •  Micro Insurance
  •  Unorganised sector pension schemes like Swavlamban

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.

All the rural and semi urban areas of the country is proposed to be mapped into the sub

service area (SSA) comprising 1000-1500 households with an average three to four villages with relaxation in NE/ Hilly states.

It is also proposed that looking at the viability of each centre, around 74000 villages with population more than 2000, which were covered by business correspondents under Swabhiman campaign would be considered for conversion into full fledged brick and mortar branches with staff strength of 1+1/1+2 in the next three years.

All six lakh villages across the entire country are to be mapped according to the service area of each bank to have at least one fixed point banking outlet catering to 1000 to 1500 households, called as sub service area (SSA). It is proposed that SSAs shall be covered through a combination of banking outlets that is branch banking and branch less banking. Branch banking means traditional brick and mortar branches. Branchless banking comprises of fixed point business correspondents agents, who as representative of the bank to provide basic banking services.

The implementation strategy of the plan is to utilise the existing banking infrastructure as well as expand the same to cover all households. While the existing banking network would be fully geared up to open bank accounts of the uncovered households in both rural and urban areas, the banking sector would also be expanding itself to set up an additional 50,000 business correspondents (BCs), more than 7000 branches and more than 20,000 new ATMs in the first phase.

The comprehensive plan is necessary considering the learning from the past where a large number of accounts opened remained dormant, resulting in costs incurred for banks and no benefits to the beneficiaries.

The plan, therefore, proposes to channel all government benefits (from Centre/State/Local body) to the beneficiaries to such accounts and pushing the direct benefits transfer (DBT) scheme of the Union Government, including restarting the DBT in LPG scheme. MGNREGS sponsored by Ministry of Rural Development (MoRD, GoI) is also likely to be included in the DBT scheme.

Keeping the stiff targets in mind, in the first phase, the plan would focus on first three pillars in the first year starting from 15th August, 2014.

The target for setting up additional 50,000 BCs is quite challenging given the constraints of telecom connectivity.

In order to achieve this plan, phase wise and state wise targets for banks have been set up for the period 15th August, 2014 to 14th August, 2015.

In order to achieve a demand side pull effect, it would be essential that there is branding and awareness of business correspondent model for providing basic banking services, banking products available at BC outlets and RuPay Cards. A media plan for the same is being worked out in consultation with banks.

A Project Management Consultant/Group would be engaged to help the department implement the plan.

It is proposed to launch the programme simultaneously at national level in Delhi, at every state capital and all the district headquarters.

A web-portal would be created for reporting/monitoring of progress.

Roles of various stakeholders like other departments of the central government, state governments, RBI, NABARD, NPCI and others have been indicated.

Gram Dak Sewaks in rural areas are proposed as Business Correspondent of Banks.

Department of Telecom has been requested to ensure that problems of poor and no connectivity are resolved. They have informed that of the 5.93 lakh inhabited villages in the country (2011 census) only about 50,000 villages are not covered with Telecom connectivity.




Anirban Kar

Anirban Kar is a technology and business consultant, who has earned his education degree in two continents, the USA and from India. His work started from 2003 in TCS, and comprised
of various clients ranging across geographies. His area of interest is business modeling,
enterprise architecture and investment analysis.