)
Earlier, a task force headed by Nandan Nilekani, former chairman of the Unique Identification Authority of India (UIDAI), recommended a commission of 3.14 per cent to be paid for all DBTs handled by banks and business correspondents. However, provision for such commission payment was not made in previous Budgets.
Now, the government is expected to make budgetary provisions for these expenses, as the department of financial services has already given a note to the expenditure department in the finance ministry.
Bankers claim that lenders have to incur several expenses while opening bank accounts. These costs include account opening expenses, hardware maintenance cost, advertisement expenses, debit card expenses, remuneration to business correspondents, etc.
“The account opening cost is Rs 140 per account. Also, we have to pay Rs 780 crore to the 120,000 business correspondents annually. In addition, there are other costs,” a top banker from a public sector bank said. He, however, added that with more transactions, the overall costs will come down, as some of the expenses (like account opening cost) are one time in nature.
The move will also lift banks’ fee income, which has been muted for past few quarters, following slowdown in corporate and investment banking activities in an uncertain macro-economic environment. While retail fees have been growing on the back of rising card spends and distribution of third-party products, the slowdown in corporate fees have capped the growth in banks’ fee and commission income.
Industry analysts said that receiving commissions for DBTs will also incentivise lenders to open accounts under the PMJDY scheme. Banks, nudged by the government, have opened more than 100 million accounts under this scheme. The PMJDY scheme was launched in August, 2014 with a target of opening 75 million accounts by January 26, 2015. However, 75 per cent of 100 million accounts opened still have no money.
Banks have also been directed to provide overdraft facility of Rs 5,000 if an account opened under the PMJDY scheme performs satisfactorily for six months. Bankers have requested the government to cover the overdraft facility under the credit guarantee scheme.
“It could happen that these loans could turn non-performing. So, we have asked that the loans should be covered under the credit guarantee fund trust,” said a senior executive from another public sector bank.
