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Public sector banks (PSBs) are finding a new problem with the Jan-Dhan Yojana accounts.
These come with low commission and high cost. The new challenge is a delay in commission payments. Bankers say that despite Direct Benefits Transfer, they are yet to get the commissions on these.
“We haven’t received any commission yet, despite the fact that the government has started transferring money through these accounts,” said a public sector banker.
As of now, banks get one per cent of the transaction amount, with a cap of Rs 10 a transaction, as commission. Nandan Nilakeni's task force on an Aadhaar-enabled unified payment structure had suggested the government bear a 'last-mile' transaction processing fee of 3.14 per cent, with a cap of Rs 20 a transaction. For interoperable transactions, it had said, 31 per cent of the fee could be paid to the issuing bank, 64 per cent to the acquiring bank and five per cent to the switch. Earlier, banks had also sought transaction cost plus one per cent commission in urban areas and the cost plus two per cent commission for rural areas. What banks are getting is only the transaction cost.
Earlier, the Indian Banks’ Association estimated banks would incur a cost of Rs 1,500-2,000 crore. Typically, bankers say, the cost of opening an account can be anywhere between Rs 75 and Rs 100. The cost of servicing the account from there on will vary —it depends on the balance amount kept, the number of transactions and the medium of transactions — via branches, ATMs, business correspondents, digital and so on.
IBA had earlier estimated that the average cost for banks opening Jan-Dhan accounts and maintaining these with benefits would be Rs 80 an account, then revised to Rs 140, putting further pressure on the viability.
“The government also want that it be a sustainable initiative, that we should not do it and then allow it to die because it is not commercially viable. Obviously, the government will have to think of ways and means to ensure these accounts, once they come, become commercial viable. We are working on those things,” said Arundhathi Bhattacharya, chairman, State Bank of India. The Reserve Bank of India (RBI)’s annual report also noted that banks weren’t being adequately compensated for opening these accounts. “We should recognise that PSBs undertake public interest activities (like the rollout of accounts under the Yojana) that are not always fully compensated. The government should endeavour to keep the competitive playing field level, by fully compensating banks for activities it wants undertaken in the public interest,” said RBI Governor, Raghuram Rajan.
Bankers agree that even without these commissions, these accounts can turn profitable if the amount of balance in these increases. This will take time, as it requires a change in the financial habits of consumers. According to the scheme's website, as of August 19, about 177 million accounts were opened under the scheme, of which 138.6 mn were opened by PSBs. These accounts have a total balance of Rs 22,647 crore. These PMJDY accounts have been opened to ensure financial inclusion.
