Few overdrafts, fewer insurance claims

With the opening of more than 215 million accounts in less than two years, the Pradhan Mantri Jan-Dhan Yojana has been a roaring success, at least on paper. Has the scheme been able to provide intended benefits to the people? Not much, if you look at the number of people who have availed of overdraft facilities (OD) or insurance claims.

According to data on the official website of the scheme, of the 215 million new accounts opened, only 1.8 million have availed of overdraft facilities. That works out to just 0.8 per cent of the accounts opened under the scheme. An amount of Rs 255 crore was made available as OD to these beneficiaries. That works to an average of slightly more than Rs 1,400 for every account, way less than the promised OD of Rs 5,000.

As per the data compiled till April 8, 2016, nearly 6.2 million accounts were offered OD facility. Of these, only 1.8 million accountholders made use of the facility. Bankers attribute this to a number of factors, including multiplicity of accounts. "At the time of opening these accounts, there was a lot of pressure on us to achieve the target. We did not check whether the person had accounts in other banks or not. As a result, many people ended up opening multiple accounts. We do not have a system in place to identify multiplicity of accounts," said a middle-level officer in a public sector bank, on request of anonymity.

Multiplicity also means that a large number of such accounts remained idle with zero or negligible transactions. One of the criteria for availing OD facilities is that the account should have regular transaction. The reduction in percentage of accounts with zero balance to little under 27 per cent of all accounts shows that some transactions indeed have taken place. But lack of regular transactions in specified period is the reason why a majority of accounts are ineligible for OD facility, say bankers.

"The amount of OD offered is calculated on the basis of average deposit in the last three months. On the basis of this, each branch is informed about the number of eligible accounts and also the amount to be offered to each of them. The amount ranges from Rs 500 to Rs 5,000, most of them near the lower end," said another banker.

While Canara Bank has offered the highest amount of overdraft at Rs 51 crore to 293,047 account holders, the State Bank of India, largest network of branches, has offered a measly Rs 27 crore as overdraft, as per the latest data available.

The other benefit of the Jan Dhan Yojana was two insurance schemes offered at a premium of Rs 12 and Rs 330, respectively. On this count too, data show that the scheme is yet to take off. According to available data, under the death claims, only 2,593 cases have been reported so far. Of these, 2,233 claims have been settled and 344 rejected.

The number of reported cases under the accident claims stands at just 558, of which 219 were rejected. In most cases, claims were rejected because of "absence of ATM/e-com/POS transaction during the last 45 days prior to the date of loss." Bankers say awareness about the insurance benefits of the scheme is quite low.

NO DHAN TO JAN YET

• 215 million
  Number of accounts opened
   
• 177 million
  Number of RuPay cards issued
   
• 95 million
  Number of Aadhaar-seeded accounts
   
• 26.63
  Percentage of zero-balance accounts
   
• 6.2 million
  Number of accounts offered overdraft
   
• 1.8 million
  No of accounts availing overdraft
  

 

Rs 255 crore
Total amount offered as overdraft

(Source: http://www.pmjdy.gov.in/)
(Note: status as on 08.04.2016)