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Friday, November 21, 2014

Finance Ministry finds holes in Jan Dhan Yojana; banks to open 3.7 crore more accounts

The finance ministry has identified several gaps in the Pradhan Mantri Jan Dhan Yojana, which it flagged to bankers on Thursday, asking them to rectify them.

In an eight-page note, the ministry has said banks need to open 3.75 crore additional accounts. The study pointed out that there are at least 33 districts where the coverage is under 50%. A majority of these districts are in under-developed states.

In fact, in Arunachal only 29% of the households have been covered, while the level in Andaman & Nicobar Islands is 38%. Apart from accounts, there is also concern over account balances as 5.7 crore of the over 7.5 crore, over three-fourths of the Jan Dhan accounts, have zero balances.

"There is a need to ensure transaction in these accounts," the ministry told bankers.What is adding to the worry is a slowdown in deposit growth although overall deposits are close to the Rs 6,000 crore level. The other problem is the issue of debit cards as 4.4 crore RuPay cards have been issued, resulting in a 43% gap. Only 1.5 crore cards have been activated.

Now, in the absence of activation through non-financial transactions, the accident cover will not be activated. As a result, banks have not just been asked to step up card issuance but also educate account holders about activation.

There are other glitches too. For instance, against a target of 1.3 lakh business correspondents, 1.15 lakh sub-service areas — each covering 1,000-1,500 households -have been covered. But there are over 14,000 uncovered SSAs of which one-fifth are facing connectivity problems.

Source : Economic Times


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