Jan Dhan Yojana – Overdraft Facility

According to India prime minister Shri Narendra Modi, over 11 crore accounts have been opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) which is way ahead of the target set by the government of 7 crore. The financial inclusion scheme was started with a sole objective of providing bank account to every household especially low income family groups in India irrespective of religion, location, financial condition. And adding to this success, number of accounts opened in rural area is on a higher side compared to urban areas. Amongst the many benefits which are offered under PMJDY, one of these is overdraft of up to Rs. 5000 depending on the account performance.

So what is an overdraft account

In basic terms, overdraft means account holder can withdraw more money than what is available in his/her bank account.

Let’s understand this with a very simple example:

Suppose you open account under Jan Dhan Yojana after submitting all the necessary documents in the month of September 2014 and it has a savings balance of Rs.1000 in the month of March 2015. And bank provides you Rs.5000 overdraft. So you have total Rs. 6000 in your account which can be withdrawn fully or partially. So if you withdraw, let’s say the whole amount of Rs.6000 then your balance would be shown as negative Rs. 5000. i.e. you owe bank this amount to the bank. And a small interest rate would be charged by the bank where account has been opened.

So next time let’s say you deposit Rs. 3000 in your account, it will be adjusted to the overdraft amount and your balance will become –Rs.2000. And this negative balance will be displayed until repayment of the entire Rs.5000 is done.

You can also open small account under PMJDY if you don’t have valid documents. You can also get all the benefits without even opening new account under PMJDY.

Benefits of PMJDY Overdraft Facility

• Normally people from rural areas take loan from credit lenders who charge heavy interest along with property etc. in their control.
• In case of any emergency overdraft facility can be availed.
• Eligible account holder may also be offered loan facility upon successful and timely repayment of overdraft along with the interest.
• In addition to this, overdraft limit will also be extended based on account transaction history.

Eligibility

• Account holder should be an active user of the account i.e. he/she must regularly do transactions using RuPay card issued at the time of opening the account. RuPay card has many benefits, check out this detailed post. Also see how to get RuPay debit card.
• Bank balance should be maintained in the range of Rs. 5000-6000 to avail overdraft facility

For more details on PMJDY there are two national toll free numbers dedicated: 1800 11 0001 and 1800 180 1111.