India Looks To Provide Insurance Cover To All Jan Dhan Account Holders
India is looking at providing free life and accident insurance cover to Jan Dhan account holders, as part of a push to bring such individuals under a social security net.
The government’s flagship Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana would be extended to eligible Jan Dhan account holders, and soon expanded to cover all operational 34.81 crore accounts, a government official told BloombergQuint on the condition of anonymity.
The measure is being proposed to coincide with the sixth anniversary of the Pradhan Mantri Jan Dhan Yojana.
The PM Jeevan Jyoti Bima Yojana provides life insurance cover worth Rs 2 lakh at Rs 330 per annum to all account holders aged between 18 to 50 years. The PM Suraksha Bima Yojana provides accident cover of Rs 2 lakh at Rs 12 per annum to account holders aged 18 to 70 years.
The government is weighing whether the social security cover to these account holders should be paid by the government for a limited number of years to nudge them to opt for the insurance cover, the official cited earlier said. As on Aug. 19, there were about 40.35 crore Jan Dhan account holders with Rs 1.31 lakh crore in deposits, according to data on the website of Department of Financial Services.
That could cost the government up to Rs 12,000 crore annually—if it provides accident and insurance cover to all 34.81 crore operational accounts.
Jan Dhan account holders at present earn interest on deposit, are provided with a Rupay debit card and enjoy accident insurance cover of Rs 1 lakh which was enhanced to Rs 2 lakh to Jan Dhan accounts opened after August 2018. Those who opened their accounts between August 2014 and January 2015 were also provided life insurance cover of Rs 30,000. The government has also linked these accounts for direct benefit transfer, Atal Pension Yojana, micro units development and refinance agency bank scheme.
The government is also planning to provide access of micro credit to Jan Dhan account holders through ‘Kashi’ or cash over internet—in which banks can lend against direct benefit transfers, the official said. It’s also planning micro-investment schemes for Jan Dhan account holders in the form of flexi-recurring deposit— against which a loan or overdraft facility can be availed—which is offered many state-run banks, the official said.