Newly launched Schemes for Financial Inclusion by Govt. and RBI

1. Pradhan Mantri Jan Dhan Yojana (PMJDY).

2. Pradhan Mantri Suraksha Bima Yojna,

3. Pradhan Mantri Jeevan Jyoti Bima Yojana

4. Atal Pension Yojna.

5. Payment Banks.

6. Small Finance Banks.

7. MUDRA Bank.

8. Kisan Vikas Patra (KVP) (Re-Introduced):

9. Sukhanya Samridi Account, and

10. The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016.

1. Pradhan Mantri Jan Dhan Yojana (PMJDY):

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking / Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.

Account can be opened in any bank branch or Business Correspondent (Bank Mitr) outlet. PMJDY accounts are being opened with Zero balance. However, if the account-holder wishes to get cheque book, he/she will have to fulfill minimum balance criteria.

Special Benefits under PMJDY Scheme

• Interest on deposit.

• Accidental insurance cover of Rs.1.00 lac

• No minimum balance required.

• Life insurance cover of Rs.30,000/-

• 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.

• Accidental Insurance Cover, RuPay Debit Card must be used at least once in 45 days.

• Overdraft facility upto Rs.5000/- is available in only one account per household, preferably lady of the household.

HIGHLIGHTS:

• scheme for comprehensive financial inclusion launched by the Prime Minister of India, Narendra Modi on 28 August 2014

• Run by Department of Financial Services, Ministry of Finance

• inauguration day, 1.5 Crore bank accounts were opened under this scheme

• By 28 January 2015, 12.58 crore accounts were opened, with around ₹10590 crore

2. Pradhan Mantri Suraksha Bima Yojna :

Under the PMSBY, the insurance subscriber will get annual life insurance in case of accidental death, partial disability or full disability.

Eligibility: Available to any person in the age group 18 to 70 years. Any person having Aadhaar number linked bank account can join the scheme. He/she must give a simple form to the bank every year before 1st of June. In the form name of nominee also must be given.

Risk Coverage: For accidental death and full disability– 2 Lakh rupees For partial disability – 1 Lakh rupees.

Payment Mode of premium: 12 rupees per annum will be directly auto-debited by the bank from the subscribers account in case of long-term option.

Implementation of Scheme: Will be offered by all Public Sector General Insurance Companies and all other insurers who are willing tie-up with banks for the purpose of joining the scheme.

3. Pradhan Mantri Jeevan Jyoti Bima Yojana:

Under the PMJJBY, the insurance subscriber will get an annual life insurance in case of death.

Eligibility: Available any person in the age group of 18 to 50 years having a bank account. Risk Coverage: 2 Lakh rupees in case of death due to any reason.

Payment Mode of premium: 330 rupees per annum will be directly auto-debited by the bank from the subscribers account.

Implementation of Scheme: Will be offered by Life Insurance Corporation (LIC) and all other life insurers who are willing tie-up with banks for the purpose of joining the scheme.

4. Atal Pension Yojna :

Under APY scheme, the pension subscribers will receive a fixed minimum monthly pension ranging from 1,000 rupees to 5,000 rupees at the age of 60 years. The fixed minimum monthly pension will be depending on the contributions subscribers.

Contribution: Union Government will co-contribute 50 percent of the total contribution of subscriber for a period of 5 years.

Eligibility: Subscribers must have bank account and should not be members of any statutory social security scheme and or Income Tax payers.

The minimum age of joining: 18 years and maximum age is 40 years. Focus of APY: To target unorganised sector workers.

Coverage: The pension will also be available to the spouse on the death of the subscriber and thereafter, the pension corpus would be returned to the nominee.

Subscriber and Enrolment Payment: It will auto-debited from the accounts account holders depending upon selected monthly pension range.

Enrolment agencies: Subscribers will be enrolled through institutional architecture of National Pension System by all Points of Presence (Service Providers) and Aggregators under Swavalamban Scheme.

Operational Framework of APY: It will be administered by the Pension Fund Regulatory and Development Authority (PFRDA).

5. Payment Banks :

These are new stripped-down type of banks, which are expected to reach customers mainly through their mobile phones rather than traditional bank branches.

They are allowed to undertake only certain restricted banking functions that the Banking Regualtion Act of 1949 allows.

RBI in its guidelines says

 “The objectives of setting up of payments banks will be to further financial inclusion by providing  (i) Small savings accounts (ii) Payments/remittance services To migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users”.

Birth of the Concept - The Nachiket Mor Committee

Features :

• Rs 100 Cr is the minimum capital required for payment banks. (It is Rs 500 Cr for a commercial bank)

• Can only accept CASA deposits.

• Cannot sanction loans or accept fixed deposits.

• Limit of Rs 1 Lakh per customer.

• Can issue debit cards.

• Can offer FOREX services.

• Can offer services such as automatic payments of bills, and purchases in cashless, chequeless transactions through a phone.

• FDI in Payment banks is same as that in commercial banks (74%)

• Usha Thorat committee was setup for approval and screening.

 How do they earn?

• Since Payment banks are not allowed to extend loans to the public and are yet expected to give interest rates at par with the commercial banks to remain competitive, the question being asked is how these new banks will be able to survive in absence of income from lending.

• RBI has allowed these banks to invest 75% in Government Securities and 25% as deposit in other banks.

         

6. Small Finance Banks :

The small finance banks shall primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganized sector entities.

The Small Finance Banks will be mandated to:

• Give 75% of their total credit to priority sectors (PSL) as against 40% mandatory requirement for other commercial banks, and

• Ensure that 50% of their loan portfolio constitutes advances/loans of just up to Rs. 25 lakhs.

Both payment banks and small finance banks are niche or differentiated banks i.e. specialized in certain banking functions and not universal.

7. MUDRA Bank :

MUDRA (Micro Units Development and Refinance Agency Ltd) Bank will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana.In lending, priority will be given to SC/ST enterprises.

It would be responsible for regulating and refinancing all Micro-finance Institutions (MFI) which are in the business of lending to micro/small business entities engaged in manufacturing, trading and services activities.

The  Bank would partner with state level/regional level co-ordinators to provide finance to Last Mile Financer of small/micro business enterprises.

The MUDRA Bank would be responsible for :

1)    provide policy guidelines for micro/small enterprise financing business

2)    Registration of MFI entities

3)    Regulation of MFI entities

4)    Accreditation /rating of MFI entities

5)    Laying down responsible financing practices to ward off indebtedness and ensure proper client protection principles and methods of recovery

6)    Development of standardised set of covenants governing last mile lending to micro/small enterprises

7)    Promoting right technology solutions for the last mile

8)    Formulating and running  a Credit Guarantee scheme for providing guarantees to the loans which are being extended to micro enterprises

9)    Creating  a good architecture of Last Mile Credit Delivery to micro businesses under the scheme of Pradhan Mantri Mudra Yojana.

As per NSSO Survey of 2013, there are close to 5.77 crore small-scale business units, mostly sole proprietorships, which undertake trading, manufacturing, retail and other small-scale activities.

Compare this with the organised sector and larger companies that employ 1.25 crore individuals. Clearly, the potential to harness and nurture these micro businesses is vast and the government recognises this.

Today, this segment is unregulated and without financial support or cover from the organised financial banking system.

MUDRA Bank has launched three loan instruments:

Shishu: covers loans upto Rs 50,000/-

Kishor: covers loans above Rs 50,000/- and upto Rs 5 lakh

Tarun: covers loans above Rs 5 lakh and upto Rs 10 lakh .

8. Kisan Vikas Patra (KVP) (Re-Introduced):

The re-launched Kisan Vikas Patra (KVP) will be available to the investors in the denomination of Rs. 1000, 5000, 10,000 and 50,000, with no upper ceiling on investment.

The certificates can be issued in single or joint names and can be transferred from one person to any other person / persons, multiple times.

The facility of transfer from one post office to another anywhere in India and of nomination will be available.

The certificate can also be pledged as security to avail loans from the banks and in other case where security is required to be deposited.

Initially the certificates will be sold through post offices, but the same will soon be made available to the investing public through designated branches of nationalised banks.

Kisan Vikas Patras have unique liquidity feature, where an investor can, if he so desires, en cash his certificates after the lock-in period of 2 years and 6 months and thereafter in any block of six months on pre-determined maturity value.

The investment made in the certificate will double in 100 months.

 INTEREST RATE - 8.7%.

9. Sukhanya Samridi Account :

This small-deposit scheme is subpart of Beti Bachao campaign.

(Minor) bank account for girl child below the age of 10.

She can withdraw 50% of the money after reaching age of 18 e.g. for higher education.

18 years deadline will also help preventing child-marriages. (Although scheme is silent- on whether account money will be forfeited if child marriage done.)

For initial account opening, minimum deposit Rs.1000 required.

Later, any amount in multiple of 100 can be deposited, but maximum Rs. 1.5 lakh per year.

Interest rate: 9.1% compounded annually. No income tax for this year.

Account can be opened via post office or commercial banks, Account will remain operative until she reaches 21 age.

10. The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 :

The Bill intends to provide for targeted delivery of subsidies and services to individuals residing in India by assigning them unique identity numbers, called Aadhaar numbers.

for more details please do visit us on : http://www.vetriias.com/