Banks are likely to ask the National Payments Corporation of India (NPCI) to get the Master Policy relating to provision of accident insurance cover to Pradhan Mantri Jan Dhan Yojana (PMJDY) account holders suitably amended so that they are eligible for the cover even if they transact via other digital modes and not just RuPay debit cards.

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Issuance of RuPay debit card by banks to new PMJDY customers has been hit due to global semiconductor chips’ shortage and plastic card suppliers demanding higher price.

Repercussion of non-issuance of RuPay cards

In view of the aforementioned situation, bankers’ say even if a PMJDY account holder transacts via Unified Payments Interface, Aadhaar Enabled Payment System, and Immediate Payment Service, it should be reckoned as a transaction for getting accident insurance cover.

Currently, one of the criteria for accidental death/ permanent total disability claim is associated with RuPay debit card usage.

As a part of claims processing, a bank has to certify that its PMJDY customer is holding a RuPay card and that he/she has performed minimum one successful financial or non-financial transaction within 90 days prior to date of accident.

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Since there is a delay in issuing RuPay debit card to new PMJDY customers, they will not get the accident insurance cover under PMJDY scheme.

Out of the total 46.46 crore PMJDY account holders, 32 crore had been issued RuPay debit cards as on August 31, 2022. So, there are 14.46 crore PMJDY account holders who have not been issued RuPay debit cards and are without accident insurance cover under PMJDY scheme.

PMJDY scheme

Under the PMJDY scheme, accident insurance cover of up to ₹1 lakh is provided for RuPay PMJDY cardholders of old PMJDY accounts and up to ₹2 lakhs for RuPay PMJDY cardholders of new PMJDY accounts opened after 28th August 2018.

“The Master Policy agreement that NPCI had entered into with its insurance partner needs to be modified in view of the extraordinary situation caused by the semiconductor chips shortage. This will be in the interest of new PMJDY account holders,” said a senior public sector bank official.

A Master Policy is an insurance contract issued to a policyholder, which combines what would have been several separate policies into one, according to RuPay is the indigenous card payment system developed by NPCI.

PMJDY is a national mission on Financial Inclusion encompassing an integrated approach to bring about comprehensive financial inclusion of every unbanked adult in the country. The plan envisages universal access to banking facilities with basic banking account for every unbanked adult, financial literacy, access to credit, insurance, and pension facility.