Prime Minister Mr.Narendra Modi has launched his dream financial inclusion project Jan Dhan Yojana(JDY) on the 68th Independence Day, 15th August,2014. The objective of the drive is ensuring access to various financial services like availability of basic savings bank account, access to need based credit, remittance facility and insurance to the weaker and lower income groups. The scheme allows customers-
i) to open a zero bank account
ii) to get a RuPay debit card
iii) Life insurance policy of Rs.1,00,000
iv) Accident insurance of Rs.30,000
v) Overdraft facility up-to Rs.5000.
The scheme aims to open a bank account at-least for one member in a family. As of 29th November,2014 around 8 crores of bank accounts (both rural and urban) have been opened.
How will it benefit the economy?
India is a country with over 1.2 billion people. A bank account with a minimum balance of at-least 1 Re will enable the government to pool funds. These funds can in turn be used by the government for the development of the country.
Will JDY perform better than the previous financial inclusion drives?
The success of JDY depends on the economical viability for the banks. It is estimated that for a bank it takes Rs.50 to maintain a zero balance account. Apart from this banks have to spend Rs.300-400 to open a bank account with a debit card attached to it. For banks maintaining these accounts will not be viable.
The banks were under pressure to meet the targets. However, the quality of bank accounts opened is questionable. There has been incidents of multiple bank accounts being opened. Mainly, two problems are likely to dodge JDY- i) Easy and reliable access to bank ii) the need for relevant financial products. There has been reports of restricted access. The earlier financial inclusion by the UPA govt. has proved the bank accounts opened under the scheme lie dormant. A booklet of JDY describes that the overdraft facility will be availed only after 6 months of satisfactory operation, insurance is claimable only if it has been swiped 45 days prior to the claim.
Only time can prove the success of Jan Dhan Yojana.
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