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Financial Inclusion Schemes
Financial Inclusion is the latest buzzword that has captured attention of policymakers, development
agencies, banks, etc. across geographies primarily in the developing and the under-developed
countries. A large section of the population, in these countries have remained outside the formal
banking channel. As a result, these people have neither been able to participate nor enjoy the fruits of
economic growth. This has been realized by all the stakeholders. Financial Institutions, Telecom
companies, Information Technology Service Providers and many other ancillary organizations are
playing a proactive role for Financial Inclusion. Reserve Bank of India decided to adopt the Business
Correspondent (BC) Model which made the basic banking services, with liberalized norms, more
accessible to the financially excluded segment. Government of India instructed banks to adopt villages,
following with the State Level Bankers Committees (SLBC) began with allotting 74,414 villages with
population of more than 2000, to various banks to be covered under Financial Inclusion by March
2012. Accordingly, IDBI Bank has been allotted 120 villages. Various other models like kiosk
banking, mobile banking, small format branches, etc. have also been adopted by the banks to deliver
banking services to the excluded people in rural as well as urban areas. Banking services that are
provided through these channels are Savings Account, Fixed Deposit, Recurring Deposit, Micro-
insurance, Remittance and various types of loans. Government of India for the financial stability of
the country took a major step by launching Jan Dhan Yojana for the common people of India, under
which every Indian was requested to open a bank account
Pradhan Mantri Jan-Dhan Yojana (PMJDY)
This is the National Mission for Financial Inclusion to ensure access to financial services, namely,
Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable
manner. The mission was launched to have maximum population under the Banking arena and so that
the various subsidies and government schemes being launched for the downtrodden and the needy
population reaches them directly. Thus, minimising the various intermediaries and avoid any leakages
in making the subsidies reach the poor. IDBI Account can be opened in any bank branch or Business

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Correspondent (Bank Mitre) outlet. PMJDY accounts are being opened with Zero balance and with
minimum Know Your Customer (KYC) documents.
Some of the features that PMJDY accounts offered are as below:
1. Account opening with minimum KYC requirement.
2. Accidental insurance cover of Rs.1.00 lac
3. No minimum balance required
4. Life insurance cover of Rs.30, 000/
5. Easy Transfer of money across India
6. Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts
7. After satisfactory operation of the account for 6 months an overdraft facility will be permitted
8. Access to Pension, insurance products. Accidental Insurance Cover
9. RuPay Debit Card
10. Overdraft facility up to Rs.5000/- is available in one account per household, preferably lady of
the household
The PMJDY mission intends to cover all the unbanked households and open at least one account per
branch. The government roped in the banks to ensure that maximum accounts get opened in a short
span of time. The target for opening the PMJDY accounts were distributed to various Banks. The
Banks in turn had taken up this on a mission mode and distributed the targets to their branches. To
ensure smooth and speedy account opening IDBI Bank also made certain changes in their back office
process and systems. Government had allotted wards and social service areas to the banks for opening
the accounts of the unbanked population. Ahmedabad Region of IDBI Bank was allotted 77446
households through 14 wards and 4 SSAs, which in turn was distributed across its 48 branches. Daily
monitoring was carried out to assess the number of accounts opened by various branches.
The branch officers had been camping at various slums, market places, villages etc… to get these
accounts opened. Ahmedabad Region of IDBI Bank has opened 23344 accounts with account
balances of Rs 19 lakhs approximately. At some places, the officials tied up with the corporates with

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whom they were dealing with to open the accounts of their factory workers and labourers. In villages,
the grampanchyats had been helpful and the officials explained the benefits of these schemes to the
sarpanch and the other influential people in the village. Since this project was a huge success they
started 3 new schemes along with that Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri
Jeevan Jyothi Bima Yojana, and Atal Pension Yojana. The penetration of the insurance sector is
merely 2%. The lack of availability of the affordable insurance schemes has deprived the poor and
needy population of the benefits of the insurance coverage. The 2 insurance schemes - Pradhan Mantri
Suraksha Bima Yojana and Pradhan Mantri Jeevan Jyothi Bima Yojana would help in bridging this
gap.
Pradhan Mantri Suraksha Bima Yojana is an Accident Insurance Scheme offering accidental death
and disability cover for death or disability on account of an accident, The scheme offers an accidental
cover of Rs 2 lac at Rs 330 per annum. Any member between the age group 18 to 50 years is eligible
for this scheme. This is a one year scheme cover and is renewable from year to year, The Benefits of
Sum Insured in case of following situations are as below:
a) Death - Rs. 2 Lakh
b) Total and irrecoverable loss of both eyes or loss of use of both hands or feet or loss of sight of
one eye and loss of use of hand or foot - Rs. 2 Lakh
c) Total and irrecoverable loss of sight of one eye or loss of use of one hand or foot - Rs. 1 Lakh
Eligibility Conditions:
The savings bank account holders of the Bank aged between 18 years (completed) and 70 years (age
nearer birthday) who give their consent to join / enable auto-debit, as per the above modality, will be
enrolled into the scheme.
Scope of coverage:
1. All savings bank account holders in the age 18 to 70 years in the Bank will be entitled to join.

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2. In case of multiple saving bank accounts held by an individual in one or different banks, the
person would be eligible to join the scheme through one savings bank account only.
3. Aadhar would be the primary KYC for the bank account.
As of May 11, 2015 the total enrolments under this scheme have been 4.89 crore as per the Jan
Suraksha website, Department of Financial Services.
Pradhan Mantri JeevanJyothi Bima Yojana is life insurance scheme which is administered by the
bank. The scheme offers a life insurance cover of Rs 2lac at Rs 12 per annum. Any members between
the age group 18-70 is eligible for this scheme. This insurance will cover all permanent disablement
that is caused due to accident. . As per the scheme Rs.2 lakhs is payable on member’s death due to any
reason
Eligibility Conditions:
a) The savings bank account holders of the Bank aged between 18 years (completed) and 50 years (age
nearer birthday) who give their consent to join / enable auto-debit, as per the above modality, will be
enrolled into the scheme.
b) Individuals who join after the initial enrolment period extending up to 31st August 2015 or 30th
November 2015, as the case may be, will be required to give a self-certification of good health and
that he / she does not suffer from any of the critical illnesses as mentioned in the applicable Consent
cum Declaration form as on date of enrolment or earlier.
Scope of coverage:
1. All savings bank account holders in the age 18 to 50 years in the Bank will be entitled to join.
2. In case of multiple saving bank accounts held by an individual in one or different banks, the
person would be eligible to join the scheme through one savings bank account only.
3. Aadhar would be the primary KYC for the bank account.

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As of May 11, 2015 the total enrolments under this scheme have been 1.44 crore as per the Jan
Suraksha website, Department of Financial Services.
Government of India has launched Atal Pension Yojana to focus on all citizens in the unorganised
sector entitling them to a pension up to Rs 5000 per month after 60 years of age. Government
announced the introduction of universal social security schemes in the Insurance and Pension sectors
for all Indians, specially the poor and the under-privileged, in the Budget for the year 2015-16. The
pension facility is available only for the public sector employees and there is a whole lot of private
and unorganised sector which is deprived of the pension benefits. There is major population which is
left with no choice after the completion of the employment. Therefore, it has been announced that the
Government will launch the Atal Pension Yojana (APY), which will provide a defined pension,
depending on the contribution, and its period. 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). Under the APY, the subscribers would receive the
fixed minimum 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 be based 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 any subscriber under APY
would be 20 years or more. The benefit of fixed minimum pension would be guaranteed by the
Government. The APY would be introduced from 1st June, 2015.
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
Atal Pension Yojana (APY) is open to all bank account holders. The Central Government would also
co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, to each eligible

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subscriber account, for a period of 5 years, i.e., from Financial Year 2015-16 to 2019-20, who join the
NPS between the period 1 st June, 2015 and 31st December, 2015 and who are not members of any
statutory social security scheme and who are not income tax payers. However the scheme will continue
after this date but Government Co-contribution will not be available. The Government co-contribution
is payable to eligible PRANs by PFRDA after receiving the confirmation from Central Record
Keeping Agency at such periodicity as may be decided by PFRDA.
Age of joining and contribution period
The minimum age of joining APY is 18 years and maximum age is 40 years. The age of exit and start
of pension would be 60 years. Therefore, minimum period of contribution by the subscriber under
APY would be 20 years or more.
All bank account holders under the eligible category may join APY with auto-debit facility to accounts,
leading to reduction in contribution collection charges. The subscribers should keep the required
balance in their savings bank accounts on the stipulated due dates to avoid any late payment penalty.
Due dates for monthly contribution payment is arrived based on the deposit of first contribution
amount. In case of repeated defaults for specified period, the account is liable for foreclosure and the
Government of India co-contributions, if any shall be forfeited. Also any false declaration about
his/her eligibility for benefits under this scheme for whatsoever reason, the entire government
contribution shall be forfeited along with the penal interest. For enrolment, Aadhar would be the
primary KYC document for identification of beneficiaries, spouse and nominees to avoid pension
rights and entitlement related disputes in the long-term. The subscribers are required to opt for a
monthly pension from Rs. 1000 - Rs. 5000 and ensure payment of stipulated monthly contribution
regularly. The subscribers can opt to decrease or increase pension amount during the course of
accumulation phase, as per the available monthly pension amounts. However, the switching option
shall be provided once in year during the month of April. Each subscriber will be provided with an
acknowledgement slip after joining APY which would invariably record the guaranteed pension
amount, due date of contribution payment, PRAN etc. As of May 11, 2015 the total enrolments under
this scheme have been 41,124 as per the Jan Suraksha website, Department of Financial Services.

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Conclusion:
Considering the efforts to bring the unbanked population on the banking platform and provide various
social security schemes, the results would be visible in coming years. This is the necessity of the hour
and if all the institutions including the banks, insurance companies and various NGOs are aligned to
the objective of financial inclusion, the mission would be a great success.