PM ‘Jan Dhan’ Yojana launched; 1.5 crore bank accounts opened in a day

NEW DELHI: The government rolled out its ambitious financial inclusion programme, the Pradhan Mantri Jan Dhan Yojana (PMJDY), and said about 1.5 crore accounts were opened on Thursday through thousands of camps, exceeding the firstday target of 1 crore accounts.
The programme is Prime Minister Narendra Modi’s first blockbuster social upliftment scheme and is aimed at improving the lives of millions of India’s poor by bringing them into the financial mainstream and freeing them from the clutches of usurious moneylenders, while giving them a modicum of insurance cover.

Buoyed by the performance on Day 1, Modi shortened the time for achieving the 7.5 crore new accounts to five months from six, urging the finance ministry to complete the task by January 26.
“In order to eradicate poverty we have to get rid of financial untouchability,” the prime minister said, adding that inclusion will also act as an important tool in the fight against corruption. He also said the programme would break the vicious cycle of poverty and debt and boost the economy, which slowed to decadal lows in the past two years.
The prime minister topped up each account with life insurance cover of Rs 30,000, adding to the Rs 1 lakh accidental insurance benefit already available under the account that will come bundled with a Ru-Pay-enabled debit card.
“Banks have assured me they will do this work before January 26. Those who open accounts by January 26, 2015, over and above the Rs 1 lakh accident, they will be given life insurance cover of Rs 30,000. This will help the poor families,” he said.
After six months of satisfactory operations, the account would be eligible forRs 5,000 overdraft facility, designed to take the poor out of the clutches of moneylenders. Subsequently, these accounts will be also used for providing micro pensions.
“I believe when a person opens a bank account, he or she takes the first step to get connected with the economic system. Today, the 1.5 crore families which got connected with the economic system will give a boost to the economy,” the prime minister said. Modi noted that it was easy for the rich to get loans at low interest rates but that the poor are forced to borrow from moneylenders at five times that figure.
“A breakthrough was required to overcome the vicious cycle of poverty and debt, and that breakthrough has been achieved today,” he said, adding that financial inclusion is the responsibility of the government.
PMJDY was simultaneously launched at multiple centres by 20 chief ministers and several union ministers — Home Minister Rajnath Singh in Lucknow, External Affairs Minister Sushma Swaraj in Bhopal, Human Resource Development Minister Smriti Irani in Surat, Law Minister Ravi Shankar Prasad in Chennai and Information & Broadcasting Minister Prakash Javadekar in Pune.
In all, 600 programmes and 77,852 camps were organised on the first day for the opening of bank accounts.
“We are happy to break various records,” said Modi, emphasising the historic nature of the achievement. Never before had 1.5 crore accounts been opened in a day along with insurance cover, he said. “This is a happy experience for the government,” he said, adding that the programme’s success was an inspiration for scaling new heights.

The prime minister recalled that when banks were nationalised in 1969, it was done with the objective of bringing people into the economic mainstream. “But that objective has not been achieved till date. After 68 years of Independence, not even 68% of India’s population has access to banking,” he said.
The government would eventually want to provide direct benefits transfer through these accounts, a measure it feels can help curb corruption by plugging leakages.
Narrating a personal anecdote, the PM said he got a bank account opened in his school with Dena Bank, but it remained inactive for 20 years as he had little money to deposit in it. The bank officials kept coming to his house to get the account closed as they had to carry out operational procedures year after year, he added. Earlier, FM Arun Jaitley said PMJDY would not be restricted to just opening a bank account. In the next six months, after a review of the account, an overdraft facility would also be provided to account-holders.
The finance minister said the National Unified USSD Platform (NUUP) jointly set up by banks and mobile companies will make mobile banking available to account-holders. The National Payments Corporation of India has provided a platform for basic banking transactions that can be made with a phone call. Accountholders will be able to check their balance and transfer funds using this method.
Bank of India Chairman Vijayalakshmi Iyer said the overdraft facility should not be seen as a dole but will be offered based on economic activity. “After six months of satisfactory operations, Rs 2,000 will be provided as an overdraft facility, which will then be extended,” she said.
Industry welcomed the scheme and said implementation at the ground level will be the key to its success. “It’s an innovative and much-needed step in the right direction that will address the biggest national challenge — eradication of poverty — through financial inclusion,” the CII said in a statement.

source:The Economic Times