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Understanding the Zero Balance Account under Pradhan Mantri Jan Dhan Yojana

Zero Balance Account through Pradhan Mantri Jan Dhan Yojana
The Pradhan Mantri Jan Dhan Yojana (PMJDY) was initiated by the Government of India in 2014. This initiative aims to bring financial services within the reach of the economically disadvantaged who can’t afford to maintain a regular savings account. Offering a Zero Balance Account is one of the significant benefits of this scheme, ensuring no minimum balance requirement.

Here’s an overview of the benefits and features this innovative banking solution brings to the table:

  1. Universal Access: The scheme allows you to open a zero balance account with any participating bank, such as Axis Bank.
  2. No Additional Charges: This account allows you to deposit, withdraw, or transfer funds without incurring any additional charges.
  3. Mobile Banking Facility: Account holders can avail themselves of the mobile banking facility without incurring extra costs, thus enabling banking right at their fingertips.
  4. Issuance of RuPay Debit Card: Along with the account, you get a RuPay debit card. This card enables you to carry out transactions just as you would with a regular savings account debit card.
  5. Insurance Coverage: This scheme provides a free life cover of Rs. 30,000 along with an accidental cover of Rs. 1 lakh per account, thus providing a safety net to the economically disadvantaged sections.
  6. Financial Literacy Programs: PMJDY promotes financial literacy by offering programs that help individuals understand and manage their finances better.
  7. Relaxed Documentation: The scheme also allows for the opening of a “small savings account” even in the absence of standard required documents like Voter ID or ration card.
  8. ATM Withdrawals: Account holders can enjoy up to 4 free withdrawals per month at other Nationalised Bank ATMs.

By providing such benefits and features, the PM Jan Dhan Yojana is playing a significant role in promoting financial inclusion and empowering individuals by granting them access to essential banking services.

Features of the Zero Balance Account under PM Jan Dhan Yojana
The Pradhan Mantri Jan Dhan Yojana (PMJDY) extends beyond basic banking facilities with a spectrum of added features.
Here is a deeper look at the additional features and benefits provided by the scheme:

Bank of Choice: Under the PMJDY, you have the freedom to open a zero balance account with any participating bank, be it Bank of Baroda, IDFC First Bank, or any other participating institution.

Overdraft Facility: The scheme provides an overdraft facility up to Rs. 10,000 to account holders. This provides financial flexibility, especially in times of emergencies. There are specific conditions tied to this provision.

Insurance Covers: Account holders under this scheme are eligible for an accident insurance cover of Rs. 2 lakhs, provided for new accounts opened after August 28, 2018. Moreover, there’s a life cover of Rs. 30,000 per account, ensuring a safety net for the account holder’s family.

Access to Government Schemes and Subsidies: PMJDY account holders also have direct access to various government schemes and subsidies. This allows individuals to benefit directly from the welfare schemes introduced by the government.

Inclusive Banking: A noteworthy feature of the PMJDY is the provision for “small savings accounts”. These accounts can be opened even if the individual doesn’t have sufficient required documents like a Voter ID or ration card, thus promoting financial inclusion.

How to Open a Zero Balance Account: Eligibility and Document Requirements
Pradhan Mantri Jan Dhan Yojana (PMJDY) provides an opportunity for Indian citizens to avail themselves of banking services by opening a Zero Balance Account. Below is the list of qualifications and necessary paperwork:

Eligibility Criteria:

  1. Nationality and Age: You need to be an Indian citizen and at least 10 years old.
  2. Bank Account: You should not already have a bank account. If you do, you would not be eligible to open a zero balance account under this scheme.
  3. Participating Banks: You can open a zero balance account with any bank participating in the scheme, such as ICICI Bank or Axis Bank.

Document Requirements:

  1. Identity Proof: You’ll need to fill out an application form and provide a valid identity proof. Acceptable forms of identity proof include:
  • Passport
  • Driving licence
  • PAN card
  • Aadhaar card
  • Voter’s identity card
  • An NREGA job card endorsed by an officer from the state government.
  • ID card with a photograph issued by Central/State Government departments, Statutory/Regulatory Authorities, Public Sector Undertakings, scheduled commercial banks, and public financial institutions
  • An officially attested letter bearing the individual’s photograph, issued by an officer of Gazetted rank.
  1. Address Proof: You are also required to provide an address proof, which can be the same as the identity proof if it contains your current address.
  2. Small Savings Account: For those who do not possess any valid documents, a “small savings account” can be opened by submitting a self-attested photo and signing or giving a thumbprint in the presence of a bank official.

By meeting these criteria and providing the necessary documents, Indian citizens can take advantage of PMJDY’s Zero Balance Account, further encouraging financial inclusivity and empowerment.

Steps to Open a Zero Balance Account Under PM Jan Dhan Yojana
Opening a Zero Balance Account through Pradhan Mantri Jan Dhan Yojana (PMJDY) is a straightforward process. Below are the necessary steps to facilitate the account opening process:

  1. Find a Participating Branch or Outlet: Firstly, you need to locate the nearest bank branch or business correspondent, also known as Bank Mitr, participating in PMJDY. This could be an institution like Bank of Baroda or IDFC First Bank.
  2. Obtain the Application Form: Once at the branch or outlet, request the Pradhan Mantri Jan-Dhan Yojana application form. You also have the option to download the form from the official website.
  3. Fill and Submit the Form: After obtaining the form, fill it out carefully. Ensure that you provide all necessary details accurately. Upon completion, submit the form to the respective bank officer along with the required documents. These documents include identity proof, address proof, and a passport size photo.
  4. Receiving the RuPay Debit Card: Once the account is successfully opened, the bank will issue a RuPay debit card to you. This debit card can be used for everyday transactions.
  5. Availing Additional Facilities: After your account has been activated, you can also avail additional banking services like mobile banking, internet banking, and a passbook facility.

By following these steps, you can easily open a Zero Balance Account under PMJDY and start your journey towards financial empowerment.

Advantages of Zero Balance Accounts Through Pradhan Mantri Jan Dhan Yojana
The Pradhan Mantri Jan Dhan Yojana (PMJDY) has brought a revolution in financial inclusion and literacy for many Indian citizens who couldn’t afford a regular savings bank account. A Zero Balance Account through PMJDY brings a wide array of advantages that are transformative and empowering for the account holders:

  1. Financial Inclusion and Literacy: The most significant advantage of these accounts is that they serve as a platform for financial inclusion and literacy. They bring the unbanked population into the fold of formal banking systems, enabling them to understand and use financial services effectively.
  2. Access to Basic Banking Services: These zero-balance accounts provide access to basic banking services such as deposits, withdrawals, transfers, and balance checks without any additional charges, ensuring that banking is affordable for everyone.
  3. Provision of a RuPay Debit Card: Account holders receive a RuPay debit card that can be used for cashless transactions and ATM withdrawals. This promotes digital transactions and reduces dependency on cash.
  4. Insurance Cover: PMJDY also provides a free life cover and an accidental cover to the account holders, providing a safety net in case of emergencies. These insurance covers act as a financial shield during unforeseen circumstances.
  5. Overdraft Facility: Account holders can avail themselves of the overdraft facility up to Rs. 10,000. This facility can act as a lifesaver during times of immediate financial need, offering a cushion to meet short-term requirements.
  6. Direct Transfer of Government Schemes and Subsidies: One of the standout features of these accounts is that they facilitate the direct transfer of benefits from various government schemes and subsidies. This direct transfer not only improves transparency but also accelerates the empowerment and welfare of the account holders.

In conclusion, the PMJDY is an initiative that stands as a testament to the power of financial inclusion. By offering Zero Balance Accounts, it has made banking accessible and beneficial for those who were previously excluded, ushering in a new era of financial empowerment.

Challenges Associated with Zero Balance Accounts Under Pradhan Mantri Jan Dhan Yojana
While the Pradhan Mantri Jan Dhan Yojana (PMJDY) has been instrumental in driving financial inclusion in India, it does face some challenges that limit its potential. Here are some of the notable drawbacks:

  • Inactivity and Zero Balance Accounts: A substantial number of accounts opened under the scheme remain inactive or maintain a zero balance. This implies a lack of transactions or savings by the account holders. This situation may arise due to a variety of reasons, including lack of awareness, duplication of accounts, erroneous details, or immediate withdrawal of funds once they are deposited.
  • Slow Adoption of Rupay Debit Cards: Despite the provision of Rupay debit cards, their uptake remains slow among the PMJDY account holders. This indicates that many are not utilizing the advantages of cashless transactions or ATM withdrawals. This limited adoption can be attributed to factors such as insufficient infrastructure, connectivity issues, or concerns about security.
  • Operational and Logistical Issues: Implementing the PMJDY on a national scale involves significant operational and logistical challenges. These include extending the reach of services to remote areas, verifying the validity of documents, maintaining updated records, and ensuring quality service. These tasks are complicated by factors such as a lack of adequate manpower, insufficient resources, or poor coordination among different stakeholders involved in the implementation of the scheme.

In conclusion, while the PMJDY has been a milestone in promoting financial inclusion in India, these challenges underline the need for continual improvements and reinforcements in the system to ensure it fully achieves its potential.

Steps to Close, Transfer, and Link Aadhaar in a Zero Balance Account under PM Jan Dhan Yojana

Closing Your Account:
Closing a Zero Balance Account under the Pradhan Mantri Jan Dhan Yojana (PMJDY) requires a visit to your bank branch. There, you’ll need to submit a written application along with your passbook, debit card, and any other documents the bank requires. Prior to closing, ensure any remaining balance in your account has been withdrawn or transferred elsewhere.

Transferring Your Account:
To transfer your account to another branch, again, visit your current bank branch. Submit a written application, your passbook, debit card, and other required documents. Make sure to include the details of the branch where you wish to transfer your account. The bank will process your request and inform you when the transfer has been completed.

Linking Aadhaar with Your Account:

The Aadhaar number can be linked with your PMJDY account using several methods:

  1. Branch Visit: Head to your bank branch or a business correspondent (Bank Mitr) outlet, and submit a copy of your Aadhaar card along with a linking form.
  2. ATM: Visit an ATM and insert your debit card, entering your PIN. Select the “Service” option, then the “Link Aadhaar” option. Enter your Aadhaar number twice and confirm it.
  3. SMS: Send an SMS from your registered mobile number to the number specified by your bank. Note that the SMS format can vary between banks.
  4. Online: Visit the official website of the Pradhan Mantri Jan Dhan Yojana. After logging in with your ID and password, select the “Link Aadhaar with Bank Account” option. Enter your Aadhaar number, select the bank where you have your account, and confirm.

By following these steps, you can conveniently manage your Zero Balance Account under the PMJDY

How to Avail Overdraft Facility from a Zero Balance Account under PM Jan Dhan Yojana
For individuals who have a Zero Balance Account under the Pradhan Mantri Jan Dhan Yojana (PMJDY), an overdraft facility is available under specific conditions. Here is the process and eligibility criteria for availing this facility:

Criteria for Eligibility:

  1. Satisfactory Operation of the Account: The account holder should have been operating the account satisfactorily for a minimum of six months.
  2. Aadhaar Linkage: The account should be linked with the account holder’s Aadhaar number.
  3. Usage of RuPay Debit Card: The RuPay debit card provided with the account should have been used at least once in the past 90 days.
  4. Exclusivity of Overdraft Facility: The overdraft facility is only available to households that do not have access to any other overdraft facilities.

If an account holder meets all these criteria, they are eligible to apply for the overdraft facility.
Application Process:
The application for the overdraft facility can be made at the bank branch or through a business correspondent, also known as a Bank Mitr outlet. The bank will evaluate the application based on the account holder’s repayment capacity and credit history. If approved, the overdraft limit is set at Rs 10,000 per account.
The overdraft amount can be repaid in easy instalments over a specified period, which makes it a convenient solution for those who need to address short-term financial needs.

Zero Balance Account through Pradhan Mantri Jan Dhan Yojana: Frequently Asked Questions (FAQs)

Can you define the Zero Balance Account under PM Jan Dhan Yojana?

The Zero Balance Account under PM Jan Dhan Yojana is a government initiative designed to ensure financial inclusion. This scheme aims to extend banking facilities to those unable to afford regular savings accounts. Account holders enjoy the privilege of depositing, withdrawing, and transferring funds without any charges. Additional features include the provision of a RuPay debit card and mobile banking facilities.

Who can avail the Zero Balance Account under PM Jan Dhan Yojana?

The Zero Balance Account through Pradhan Mantri Jan Dhan Yojana is available to any Indian citizen over the age of 10 who does not currently possess a bank account. To apply, individuals need to provide any available personal documentation, which can include Voter ID, ration card, and others.

What is the procedure for opening a Zero Balance Account under PM Jan Dhan Yojana?

To open a Zero Balance Account, interested applicants need to approach the nearest participating bank. Bank officials will guide them through the process which includes filling out an account opening form and submitting necessary documentation. Upon successful opening of the account, the new account holder will receive a RuPay debit card and a passbook.

What are the benefits of a Zero Balance Account under PM Jan Dhan Yojana?

Account holders can access essential banking services at no charge through a Zero Balance Account. An overdraft facility of up to Rs 10,000 is available after six months of satisfactory account operation. Other benefits include a free life cover of Rs 30,000 and an accidental cover of Rs 1 lakh per account. Additionally, account holders can take part in financial literacy programs and avail themselves of various social security schemes.

How does a Zero Balance Account differ from a Small Account?

A Zero Balance Account adheres to complete Know Your Customer (KYC) compliance, while a Small Account accommodates those lacking sufficient documentation through relaxed KYC norms.

There are some restrictions with a Small Account:
● The account balance cannot exceed Rs 50,000 at any point.
● The total annual credit cannot be more than Rs 1 lakh.
● Monthly withdrawal and transfer cannot be more than Rs 10,000.
● The account has a validity of 12 months, extendable by another 12 months with updated KYC.

How can I view the balance of my Zero Balance Account under PM Jan Dhan Yojana?

Account holders can monitor their balance through several methods:
● Head to your bank’s local branch for your passbook to be updated.
● Use the provided RuPay debit card at any ATM or POS machine.
● Access mobile banking by dialing *99# from the registered mobile number.
● Send an SMS ‘BAL’ to 9223766666 from the registered mobile number.

How can I transfer money from a Zero Balance Account under PM Jan Dhan Yojana?

Funds can be transferred using several methods:
● Visit the bank branch and fill out a withdrawal slip or a fund transfer form.
● Utilize the RuPay debit card at any ATM or POS machine.
● Access mobile banking by dialing *99# from the registered mobile number and follow the prompts.
● Use the Aadhaar Enabled Payment System (AEPS) by supplying your Aadhaar number and biometric authentication at any bank branch or business correspondent.

Can I convert my existing savings account into a Zero Balance Account under PM Jan Dhan Yojana?

Yes, existing savings accounts can be converted into a PMJDY account by submitting an application at the bank where the account is held. This conversion allows the account holder to enjoy the benefits of the PMJDY scheme.

Is it possible to open a PMJDY account online?

While the general process requires the individual to visit a bank branch physically, some banks might offer an online account opening option for PMJDY accounts. Check the respective bank’s website or contact the bank’s customer service for accurate information.

Can I open a Zero Balance Account under PM Jan Dhan Yojana at any bank?

No, only banks participating in the PMJDY scheme can open a Zero Balance Account under PM Jan Dhan Yojana. This includes most public sector banks, some private banks, and rural banks.

What happens if I don’t use my PMJDY account for a long time?

If a PMJDY account remains inoperative for a prolonged period, it may become dormant as per the bank’s policy. However, the account can be reactivated by visiting the bank branch and submitting a reactivation request.

Can a person have more than one PMJDY account?

No, a person cannot open more than one PMJDY account. The government scheme allows only one account per individual.

Is the PMJDY scheme applicable to Non-Residential Indians (NRIs)?

No, PMJDY is not applicable to Non-Residential Indians (NRIs). The scheme is intended to provide financial inclusion for residents of India only.

How can I close my PMJDY account?

To close a PMJDY account, you must visit your bank and fill out an account closure form. Remember to carry your passbook, chequebook, and debit card as the bank might require these during the process.

Which documents are necessary to initiate a PMJDY account?

Typically, to open a PMJDY account, you would require an Aadhaar Card or any other proof of identity such as a Voter’s ID card, Driving License, PAN Card, or Passport. For people without officially valid documents, banks may still open accounts based on a self-attested photograph and putting their signature or thumb print in the presence of a bank official.

What is the withdrawal limit for PMJDY account?

The withdrawal limit for a PMJDY account can vary depending on the bank and the type of debit card issued. Generally, most banks allow daily cash withdrawal of up to ₹10,000.

Can I deposit any amount in my PMJDY account?

Yes, you can deposit any amount in your PMJDY account. However, if the balance exceeds ₹50,000 at any point, you would need to provide full KYC documents to the bank.

Is there any tax benefit associated with PMJDY?

No, PMJDY accounts do not offer any specific tax benefits. However, the life and accident insurance cover associated with PMJDY accounts can provide a tax deduction under Section 80C and 80D of the Income Tax Act.

Can a minor open a PMJDY account?

Yes, minors above 10 years of age can open a PMJDY account but they will not be eligible for the overdraft facility until they turn 18.

Can a PMJDY account be operated jointly?

Yes, PMJDY accounts can be opened jointly with your spouse.

Can I transfer money from my PMJDY account to other accounts?

Yes, you can transfer money from your PMJDY account to other bank accounts.

Can I get a cheque book with my PMJDY account?

Yes, a cheque book can be issued in case of a PMJDY account. However, it would convert the zero balance account to a normal savings account with minimum balance requirements.

Is the PMJDY scheme available in rural areas?

Yes, PMJDY is available in both urban and rural areas. It aims to provide financial services to all, especially those in remote locations.

What happens to the money in the PMJDY account if the account holder dies?

In the event of the account holder’s death, the money in the PMJDY account is passed on to the nominee. If a nominee is not designated, the money will be given to the legal heirs.

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