A Jan Dhan account is a zero-balance account with a free RuPay card carrying ₹2 lakh accident cover
Background
The Press Information Bureau records that the Pradhan Mantri Jan Dhan Yojana was launched by the Prime Minister on 28th August 2014 as the National Mission for Financial Inclusion.
The scheme ensures that every unbanked adult has access to a basic bank account, with zero balance requirements and no maintenance charges.
Each account comes with a free RuPay debit card offering an accident insurance cover of ₹2 lakh.
Account holders are eligible for an overdraft facility of up to ₹10,000.
A fully KYC compliant account is a BSBD account with no restriction on balances or on the number and value of deposits in a month.
A minimum of four free withdrawals a month, including ATM withdrawals at any ATM, is provided, after which banks may charge.
The scheme sits at the core of the Jan-Dhan-Aadhaar-Mobile trinity, described as a diversion-proof mechanism for subsidy delivery.
In plain words
BSBD account Basic Savings Bank Deposit account — A no-frills savings account with no minimum balance requirement.
JAM Jan-Dhan-Aadhaar-Mobile — The combination of bank account, Aadhaar and mobile number used to deliver benefits directly.
Overdraft Overdraft facility — Permission to draw more than the balance in an account, up to a set limit.