Context: The Finance Ministry has tweaked prevention of money laundering (PML) norms with the aim to make all inoperative accounts functional so that cash transfers by the government under the COVID-19 relief package can reach beneficiaries.

Background: As a part of the Prime Minister Garib Kalyan Yojna (PMGKY) scheme, the government has decided to transfer ₹500 per month for three months to the poor and vulnerable sections of the society whose livelihood has been impacted due to the nationwide lockdown. 

About the new norms

  • Those Pradhan Mantri Jan Dhan Yojana accounts, basic savings account and small accounts which have become inoperative due to various reasons like non-completion of know your customer (KYC) requirements have become functional.

Benefits: To ensure that beneficiaries do not face any difficulty on this ground and are able to withdraw the money transferred to them by the government without any problems or requirement of additional documentation.

Other directives: The Finance Ministry had also requested the Home Ministry for adequate security personnel at bank branches and with the business correspondents to maintain law and order, and social distancing, in view of the higher customer footfall expected.

Pradhan Mantri Jan Dhan Yojana(Ministry of Finance)

Aims and objectives: It envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension.

About the scheme: 

  •  "Pradhan Mantri Jan-Dhan Yojana (PMJDY)" under the National Mission for Financial Inclusion was launched  on 28th August 2014.
  • PMJDY has provided a platform for the three social security schemes viz. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana (APY) and Pradhan Mantri Mudra Yojana (PMMY).
  • Account can be opened in any bank branch or Business Correspondent (Bank Mitr) outlet. Accounts opened under PMJDY are being opened with Zero balance. However, if the account-holder wishes to get a cheque book, he/she will have to fulfill minimum balance criteria.
  • As informed by banks, out of 35.99 crore accounts opened under PMJDY as on 26.06.2019, 29.54 crore accounts are operative accounts.

Benefits under the scheme

  • Interest on deposit.
  • Accidental insurance cover of Rs. 2 lakhs
  • No minimum balance required.
  • The scheme provides life cover of Rs. 30,000/- payable on death of the beneficiary, subject to fulfillment of the eligibility condition.
  • Easy Transfer of money across India
  • Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts.
  • After satisfactory operation of the account for 6 months, an overdraft facility will be permitted
  • Access to Pension, insurance products.
  • The Claim under Personal Accidental Insurance under PMJDY shall be payable if the Rupay Card holder has performed minimum one successful financial or non-financial customer induced transaction at any Bank Branch, Bank Mitra, ATM, POS, E-COM etc. 
  • Overdraft facility upto Rs. 10,000/- is available in only one account per household, preferably lady of the household.

Phase I - 15 August 2014 - 14 August 2015

  • Universal access to banking facilities for all households across the country through a bank branch or a fixed point Business Correspondent (BC) within a reasonable distance.
  • To cover all households with at least one basic banking account with RuPay Debit Card with inbuilt Rs 1 lakh accident insurance cover.
  • Financial literacy programme to be taken to the village level.
  • Expansion of Direct Benefit Transfer under various government schemes through bank accounts of the beneficiaries.
  • Issuance of Kisan Credit Card is also proposed

Phase II - 15 August 2015 - 14 August 2018

  • Providing microinsurance to the people.
  • Unorganised sector pension schemes like Swavalamban through the Business Correspondents.

Phase III - beyond 14 August 2018

  • The flagship financial inclusion program (PMJDY) will focus on opening accounts from "every household to every adult".
  • Existing Overdraft (OD) limit of Rs 5,000 to be raised to Rs 10,000.
  • There will not be any conditions attached for OD upto Rs 2,000.
  • Age limit for availing OD facility to be revised from 18-60 years to 18-65 years.


About Business Correspondents 

  • They are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. 
  • Banks are required to take full responsibility for the acts of omission and commission of the BCs that they engage and have, therefore, to ensure  thorough due diligence and additional safeguards for minimizing the agency risk. 
  • Basically, BCs enable a bank to expand its outreach and offer limited range of banking services at low cost, as setting up a brick and mortar branch may not be viable in all cases. 
  • Their activities include identification of borrowers, collection and preliminary processing of loan applications including verification of primary information/data, creating awareness about savings and other products, education and advice on managing money and debt counseling, processing and submission of applications to banks, promoting, nurturing and monitoring of Self Help Groups/ Joint Liability Groups, post-sanction monitoring, follow-up of recovery.