PMJDY Overdraft process should be fully digitised. No Paperwork please

The detailed guidelines on the overdraft process for PMJDY accounts has been hosted on the PMJDY website.

The players involved in the overdraft process are the Bankers, account holders and government functionaries.

As this is the first time that such a massive overdraft program without any collateral is being rolled out, the process is completely through Paper applications.

There is much scepticism  in the social media that this would be a failure and there would be huge defaults by the PMJDY account holders.

In my belief, we Indians especially the marginalised class are trustworthy and the defaults would be minimum.

Adequate safeguards have been built in the process to ensure that the account holder can be tracked in the banking sector.

 The overdraft facility is available only to Aadhaar number holders. NPCI has built a repository wherein the PMJDY account and the Aadhaar number is linked. Once an overdraft is granted in an account, appropriate flagging is done in NPCI database.

This flagging in the database ensures that no multiple overdrafts are allowed in the same PMJDY account.

A process review after 3 months would be great. The whole process should be digitised, with out the need for paper forms.

Below is the proposed process flow:

01) Any PMJDY account with credits from DBT/DBTL Scheme/scholarship/verifiable sources should be eligible for the overdraft facility.

1. The overdraft facility tobe a) 4 times of the average monthly balance b) INR5000/- whichever is lower.
2. PMJDY holders can approach any branch of the bank where the account is held. No need to approach the base branch only.
3. The OD request to be attested through Aadhaar finger-print verification. No need to fill in any forms or provide any income certificate.
4. The respective bank branch officials to validate the request digitally only. No paperwork is envisaged.
5. Once the bank branch officials authorises the transaction in the CBS (Core Banking System), the overdraft facility to be enabled.
6. System to generate alerts in case there are no credits for 30 days.