 "Jan Dhan accounts see surge in deposits: Here's all you need to know about the flagship scheme")
Jan Dhan Accounts have seen a near 50 per cent surge in deposits, to Rs 21,000 crore, since Prime Minister Narendra Modi on November 8 announced the government's demonetisation policy. (Read more)
The surge in deposits, as reported earlier, has also sparked concerns that black money holders might be using small accounts to deposit their money.
According to an earlier Business Standard report, the total balance in the 255 million Jan Dhan accounts in the country now stands at Rs 66,637 crore, against Rs 45,637 crore on November 9.
Black money concerns
The finance ministry had on November 15 set an upper limit of Rs 50,000 for deposits into these accounts. (Read more)
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"Some people are using Jan Dhan accounts to deposit black money. Up to Rs 50,000 can be deposited in Jan Dhan accounts," the Economic Affairs Secretary Shaktikanta Das had told reporters back then.
What is the Jan Dhan Yojna?
The Prime Minister’s Jan Dhan Yojana (PMJDY) was launched by the Modi government on August 28, 2014. The purpose behind the scheme is to increase banking penetration and promote financial inclusion of the poor so that each household has at least one Jan Dhan account.
Under the scheme, an account can be opened in any bank branch or business correspondent (Bank Mitr) outlet. PMJDY accounts can be opened with zero balance.
However, if the account-holder wishes to obtain a cheque book, the he or she would have to fulfil minimum balance criteria.
The enticements used to entice people into becoming account holders included an in-built accident insurance cover of Rs 100,000, an overdraft facility of Rs 2,000, extendable up to Rs 5,000, and a Rs 30,000 life insurance cover.
The Direct Benefit Transfer (DBT) scheme for subsidies is also linked to the Jan Dhan Yojana. Beneficiaries of DBT receive the benefit in these accounts.
RuPay cards, a domestic brand in the card space which is owned and developed by National Payments Corporation of India, have also been given to all the accounts started under the PMJDY scheme.
The scheme is also part of the government's ambitious Jan Dhan-Aadhaar-Mobile (JAM) trinity, which was first proposed in the Economic Survey 2014-15.
Addressing the nation during one of his Man Ki Baat programmes, the prime minister had outlined how JAM would move India towards a cashless society, make transactions transparent and reduce the menace of black money. (Read more)
Inclusion or exclusion
However, what the scheme has promised to deliver does not always match up with the situation on the ground.
As reported earlier, the life cover of Rs 30,000 announced under PMJDY for all those opening a bank account under the scheme will now exclude many. (Read more)
The finance ministry has put several riders for defining one's eligibility for a life insurance policy under PMJDY. In the guidelines issued to banks in late November this year, the ministry said the insurance would be provided only to one person in a family for accounts opened between August 15, 2014, and January 26, 2015.
Those filing income tax returns, serving and retired central and state government employees, employees of central and state public sector entities, and people already covered under the Aam Aadmi Bima Yojna have been excluded. The families of the individuals in all these categories will also be ineligible for it.
Re 1 balance
While every single rupee is precious; however, media reports had emerged in September this year that Re 1 or more was deposited into Jan Dhan accounts by bankers themselves to bring down the number of zero balance accounts. The quarterly meeting of public sector banks' heads with Finance Minister Arun Jaitley in September reportedly discussed the issue. (Read more)
It appears to have been a hit in UP in West Bengal
It appears that in areas where access to formal banking is the lowest, it is in such areas that the scheme seems to have done best.
As reported earlier, the PMJDY seems to have more takers in Uttar Pradesh and West Bengal than any other state. Data show that the two states account for more than one-fourth of deposits accrued in accounts under the scheme till May this year. (Read more)
As of May 18, 2016, accounts under the scheme had received deposits of around Rs 37,775 crore. Of this, the share of Uttar Pradesh was Rs 5,916 crore, while West Bengal’s was Rs 4,932 crore. Thus, the two states accounted for nearly 29 per cent of deposits amassed till that date.
Also, Uttar Pradesh and West Bengal accounted for 24 per cent of total accounts opened under the scheme.
