Context: NITI Aayog has organised an international webinar recently to discuss and share lessons from India’s successful cash support payments to the most vulnerable during the Covid-19 pandemic.

More on the news:

  • Panellists for the webinar included delegates from NITI Aayog; World Bank; National Payments Corporation of India (NPCI); Bill and Melinda Gates Foundation (BMGF) amongst others.
  • As 65% of India’s population have personal bank accounts in public sector banks, the provision of financial services to these citizens during the pandemic was easily facilitated through efficient functioning of 62,000 Bank Mitras.

India’s robust digital financial infrastructure:

  • The role of India’s digital financial infrastructure in successfully making direct transfers to targeted groups in a timely manner and making vital financial assistance available to the vulnerable during the ongoing Covid-19 pandemic. 
  • This was made possible only due to a robust digital financial infrastructure established over the past five years acting as a model worth replicating by other developing countries. 
  • A big step towards customer centricity and establishing a direct connection of the government with the people was enabled by the Pradhan Mantri Jan Dhan Yojana (PMJDY)
  • The Yojana successfully enabled zero-cost, zero-balance bank accounts. 
    • It is equally noteworthy that of the 380 million PMJDY bank accounts opened to date, around 53% are in the names of women.
    • Technology has been a great enabler, especially in the Aspirational Districts of India. For example, In April 2020, close to a billion UPI and 403 million AePS transactions were recorded, he said.

How was this digital infra created?

  • The creation of India’s robust digital infrastructure has not been an overnight process but a sustained effort to lay its foundational layers: 
    • Building digital infrastructure, 
    • Targeted G2P transfer initiatives, 
    • Public Financial Management System (PFMS) linkage and NPCI’s role in enabling digital payments.
  • India’s decision to adopt a deliberate design choice of building digital infrastructure as a public good has been the key to its success. 
  • The three crucial elements for building a robust digital financial infrastructure: digital identity, digital database and digital payment.

Looking towards the future:

  • The One Nation One Card system is a step in the right direction and India must tread that path while continuing to focus on financial literacy and bolstering cybersecurity.
  • There is also a scope for rolling out the (emergency) cash support transfers, covering both Cash-in Cash-out (CICO) agents.

Pradhan Mantri Jan Dhan Yojana 

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).
  • Accounts can be opened in any bank branch or Business Correspondent (Bank Mitra) 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.

One Nation, One Ration Card system

  • It will enable migrant workers and their family members to access PDS benefits from any Fair Price Shop in the country.
  • Existing system of foodgrains distribution by States/UTs to own beneficiaries remains same/ unaltered, as this system intends to largely benefit the migratory beneficiaries under NFSA who frequently change their place of dwelling in search of employment, etc. across the country.
  • The new system, based on a technological solution, will identify a beneficiary through biometric authentication on electronic Point of Sale (ePoS) devices installed at the FPSs, and enable that person to purchase the quantity of foodgrains to which she is entitled under the NFSA.