Financial Inclusion Schemes in India

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inclusion.html
The Government of India has been introducing several exclusive schemes for the purpose of
financial inclusion. These schemes intend to provide social security to the less fortunate sections of
the society. After a lot of planning and research by several financial experts and policymakers, the
government launched schemes keeping financial inclusion in mind. These schemes have been
launched over different years. Let us take a list of the financial inclusion schemes in the country:
 Pradhan Mantri Jan Dhan Yojana (PMJDY)
 Atal Pension Yojana (APY)
 Pradhan Mantri Vaya Vandana Yojana
 Stand Up India Scheme
 Pradhan Mantri Mudra Yojana
 Pradhan Mantri Suraksha Bima Yojana (PMSBY)
 Sukanya Samriddhi Yojana
 Jeevan Suraksha Bandhan Yojana
 Credit Enhancement Guarantee Scheme (CEGS) for Scheduled Castes (SCs)
 Venture Capital Fund for Scheduled Castes under the Social Sector Initiatives
 Varishtha Pension Bima Yojana (VPBY)

Objectives of Financial Inclusion

 Financial inclusion intends to help people secure financial services and products at economical
prices such as deposits, fund transfer services, loans, insurance, payment services, etc.
 It aims to establish proper financial institutions to cater to the needs of the poor people. These
institutions should have clear-cut regulations and should maintain high standards that are existent
in the financial industry.
 Financial inclusion aims to build and maintain financial sustainability so that the less fortunate
people have a certainty of funds which they struggle to have.
 Financial inclusion also intends to have numerous institutions that offer affordable financial
assistance so that there is sufficient competition so that clients have a lot of options to choose
from. There are traditional banking options in the market. However, the number of institutions that
offer inexpensive financial products and services is very minimal.
 Financial inclusion intends to increase awareness about the benefits of financial services among
the economically underprivileged sections of the society.
 The process of financial inclusion works towards creating financial products that are suitable for
the less fortunate people of the society.
 Financial inclusion intends to improve financial literacy and financial awareness in the nation.
 Financial inclusion aims to bring in digital financial solutions for the economically underprivileged
people of the nation.
 It also intends to bring in mobile banking or financial services in order to reach the poorest people
living in extremely remote areas of the country.
 It aims to provide tailor-made and custom-made financial solutions to poor people as per their
individual financial conditions, household needs, preferences, and income levels.
 There are many governmental agencies and non-governmental organisations that are dedicated
to bringing in financial inclusion. These agencies are focussed on improving the access to
receiving government-approved documents. Many poor people are unable to open bank accounts
or apply for a loan as they do not have any identity proof. There are so many people who live in
rural areas or tribal villages who do not have knowledge about documents such as PAN, Aadhaar,
Driver’s License, or Electoral ID. Hence, they cannot avail many of the services offered by
governmental or private institutions. Due to lack of these documents, they are unable to avail any
form of subsidies offered by the government that they are actually entitled to.

Pradhan Mantri Jan Dhan Yojana

From Wikipedia, the free encyclopedia

Pradhan Mantri Jan-Dhan Yojana(P.M.J.D.Y), Prime Minister's People Money Scheme is India's
National Mission for Financial Inclusion to ensure access to financial services, namely Banking
Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.
This financial inclusion campaign was launched by the Prime Minister of India Narendra Modi on 28
August 2014[1] He had announced this scheme on his first Independence Day speech on 15 August
2014.
Run by Department of Financial Services, Ministry of Finance, on the inauguration day, 1.5 Crore
(15 million) bank accounts were opened under this scheme.[2][3] Guinness World Records
Recognises the Achievements made under PMJDY, Guinness World Records Certificate says "The
most bank accounts opened in 1 week as a part of financial inclusion campaign is 18,096,130 and
was achieved by Banks in India from 23 to 29 August 2014". By 7 February 2018, over 31 crore (310
million) bank accounts were opened and over ₹745 billion (US$12 billion) were deposited under the
scheme.[4]

History[edit]
The scheme was launched by PM Narendra Modi on 15 August 2014. Slogan of
the Scheme is "Mera Khatha, Bhagya Vidhatha ( it means "My Account brings
luck to me" )[5]
Investments[edit]
Pradhan Mantri Jan-Dhan Yojana statistics as on 7 March 2018 (All Figures
in Crores)[4]

Number of Accounts
Number
Bank
Balance in Accounts of RuPay Card
Type Urba Femal
Rural Total s
n e

Public
13.6 25.3
Sector 11.70 13.26 ₹61,156.01 19.01
0 0
Banks

Regiona
l Rural 4.24 0.78 5.02 2.75 ₹12,780.86 3.67
Banks

Private
0.60 0.39 0.99 0.52 ₹2,180.01 0.92
Banks

18.4 31.3 ₹76,116.88 crore(US$12 billio

Total 12.87 16.53 23.60
3 1 n)

Purpose[edit]
In a run up to the formal launch of this scheme, the Prime Minister personally
mailed to Chairmans of all PSU banks to gear up for the gigantic task of enrolling
over 7.5 crore (75 million) households and to open their accounts.[6] In this email
he categorically declared that a bank account for each household was a "national
priority".[citation needed]
The scheme has been started with a target to provide 'universal and clear access
to banking facilities' starting with "Basic Banking Accounts" with overdraft facility
of ₹5,000(US$77)[7] after six months and RuPay Debit card with inbuilt accident
insurance cover of ₹1 lakh (US$1,500) and RuPay Kisan Card. As many as
1,767 claims were settled toward accidental insurance to RuPay Card holders
under the government's flagship financial inclusion programme Pradhan Mantri
Jan Dhan Yojana (PMJDY) as said by PM on 15 August 2017. In next phase,
micro insurance & pension etc. will also be added.[1]
Under the scheme:[8]

1. Account holders will be provided bank accounts with no minimum balance.

2. RuPay debit cards will be issued.
3. Accidental insurance cover of ₹1 lakh (US$1,500).
4. After six months of opening of the bank account, holders will be eligible
for ₹5,000 (US$77) overdraft from the bank.[9]
5. With the introduction of new technology introduced by National Payments
Corporation of India (NPCI), a person can transfer funds, check balance
through a normal phone which was earlier limited only to smart phones.
6. Mobile banking for the poor would be available through National Unified
USSD Platform (NUUP) for which all banks and mobile companies have
come together

Introduction of the Atal Pension Yojana

The Government of India is extremely concerned about the old age income
security of the working poor and is focused on encouraging and enabling them to
join the National Pension System (NPS). To address the longevity risks among the
workers in unorganised sector and to encourage the workers in unorganised sector
to voluntarily save for their retirement, who constitute 88% of the total labour
force of 47.29 crore as per the 66th Round of NSSO Survey of 2011-12, but do not
have any formal pension provision, the Government had started the Swavalamban
Scheme in 2010-11. However, coverage under Swavalamban Scheme is inadequate
mainly due to lack of clarity of pension benefits at the age after 60.

2. The Finance Minister has, therefore, announced a new initiative called Atal
Pension Yojana (APY) in his Budget Speech for 2015-16. The APY will be
focussed on all citizens in the unorganised sector, who join the National Pension
System (NPS) administered by the Pension Fund Regulatory and Development
Authority (PFRDA) and who are not members of any statutory social security
scheme. Under the APY, the subscribers would receive the fixed pension of Rs.
1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs.
5000 per month, at the age of 60 years, depending on their contributions, which
itself would vary on the age of joining the APY. The minimum age of joining APY
is 18 years and maximum age is 40 years. Therefore, minimum period of
contribution by the subscriber under APY would be 20 years or more. The benefit
of fixed pension would be guaranteed by the Government. The Central
Government would also co-contribute 50% of the subscriber’s contribution or Rs.
1000 per annum, whichever is lower, to each eligible subscriber account, for a
period of 5 years, i.e., from 2015-16 to 2019-20, who join the NPS before
st
31 December, 2015 and who are not income tax payers. The APY would be
launched from 1st June, 2015. The existing subscribers of Swavalamban Scheme
would be automatically migrated to APY, unless they opt out.
3. A copy of the Note on APY is enclosed.
Note on Atal Pension Yojana

Benefit of APY: Fixed pension for the subscribers ranging between Rs. 1000 to
Rs. 5000, if he joins and contributes between the age of 18 years and 40 years. The
contribution levels would vary and would be low if subscriber joins early and
increase if he joins late.
Eligibility for APY: Atal Pension Yojana (APY) is open to all bank account
holders who are not members of any statutory social security scheme.
Age of joining and contribution period: The minimum age of joining APY is
18 years and maximum age is 40 years. Therefore, minimum period of contribution
by the subscriber under APY would be 20 years or more.
Focus of APY: Mainly targeted at unorganised sector workers.
Enrolment and Subscriber Payment: All bank account holders under the
eligible category may join APY with auto-debit facility to accounts, leading to
reduction in contribution collection charges.
Enrolment agencies: All Points of Presence (Service Providers) and
Aggregators under Swavalamban Scheme would enrol subscribers through
architecture of National Pension System.
Operational Framework of APY: It is Government of India Scheme, which is
administered by the Pension Fund Regulatory and Development Authority. The
Institutional Architecture of NPS would be utilised to enrol subscribers under
APY.
Funding of APY: Government would provide (i) fixed pension guarantee for the
subscribers; (ii) would co-contribute 50% of the subscriber contribution or Rs.
1000 per annum, whichever is lower, to eligible subscribers; and (iii) would also
reimburse the promotional and development activities including incentive to the
contribution collection agencies to encourage people to join the APY.
Age of Joining, Contribution Levels, Fixed Monthly Pension and Return of
Corpus to the nominee of subscribers
The Table of contribution levels, fixed monthly pension to subscribers and his
spouse and return of corpus to nominees of subscribers and the contribution period
is given below. For example, to get a fixed monthly pension between Rs. 1,000
per month and Rs. 5,000 per month, the subscriber has to contribute on monthly
basis between Rs. 42 and Rs. 210, if he joins at the age of 18 years. For the same
fixed pension levels, the contribution would range between Rs. 291 and Rs.
1,454, if the subscriber joins at the age of 40 years.
Table of contribution levels, fixed monthly pension of Rs. 1,000 per month to
subscribers and his spouse and return of corpus to nominees of subscribers
and the contribution period under Atal Pension Yojana
Age of Years of Indicative Monthly Pension Indicative Return of
Joining Contribution Monthly to the subscribers Corpus to the
Contribution and his spouse nominee of the
(in Rs.) (in Rs.) subscribers (in Rs.)
18 42 42 1,000 1.7 Lakh
20 40 50 1,000 1.7 Lakh
25 35 76 1,000 1.7 Lakh
30 30 116 1,000 1.7 Lakh
35 25 181 1,000 1.7 Lakh
40 20 291 1,000 1.7 Lakh

Table of contribution levels, fixed monthly pension of Rs. 2,000 per month to
subscribers and his spouse and return of corpus to nominees of subscribers
and the contribution period under Atal Pension Yojana
Age of Years of Indicative Monthly Pension Indicative Return of
Joining Contribution Monthly to the subscribers Corpus to the
Contribution and his spouse nominee of the
(in Rs.) (in Rs.) subscribers
(in Rs.)
18 42 84 2,000 3.4 lakh
20 40 100 2,000 3.4 lakh
25 35 151 2,000 3.4 lakh
30 30 231 2,000 3.4 lakh
35 25 362 2,000 3.4 lakh
40 20 582 2,000 3.4 lakh

Table of contribution levels, fixed monthly pension of Rs. 3,000 per month to
subscribers and his spouse and return of corpus to nominees of subscribers
and the contribution period under Atal Pension Yojana

Age of Years of Indicative Monthly Pension Indicative Return of

Joining Contribution Monthly to the subscribers Corpus to the
Contribution and his spouse nominee of the
(in Rs.) (in Rs.) subscribers
(in Rs.)
18 42 126 3,000 5.1 Lakh
20 40 150 3,000 5.1 Lakh
25 35 226 3,000 5.1 Lakh
30 30 347 3,000 5.1 Lakh
35 25 543 3,000 5.1 Lakh
40 20 873 3,000 5.1 Lakh

Table of contribution levels, fixed monthly pension of Rs. 4,000 per month to
subscribers and his spouse and return of corpus to nominees of subscribers
and the contribution period under Atal Pension Yojana
Age of Years of Indicative Monthly Pension Indicative Return of
Joining Contribution Monthly to the subscribers Corpus to the
Contribution and his spouse nominee of the
(in Rs.) (in Rs.) subscribers (in Rs.)
18 42 168 4,000 6.8 Lakh
20 40 198 4,000 6.8 Lakh
25 35 301 4,000 6.8 Lakh
30 30 462 4,000 6.8 Lakh
35 25 722 4,000 6.8 Lakh
40 20 1164 4,000 6.8 Lakh

Table of contribution levels, fixed monthly pension of Rs. 5,000 per month to
subscribers and his spouse and return of corpus to nominees of subscribers
and the contribution period under Atal Pension Yojana
Age of Years of Indicative Monthly Pension Indicative Return
Joining Contribution Monthly to the subscribers of Corpus to the
Contribution and his spouse nominee of the
(in Rs.) (in Rs.) subscribers (in
Rs.)
18 42 210 5,000 8.5 Lakh
20 40 248 5,000 8.5 Lakh
25 35 376 5,000 8.5 Lakh
30 30 577 5,000 8.5 Lakh
35 25 902 5,000 8.5 Lakh
40 20 1,454 5,000 8.5 Lakh