Pradhan Mantri Jan Dhan Yojana: A step towards
‘Sab Ka Sath Sab Ka Vikas’
In his first Independence Day speech on
15th August’2014, Prime Minister of India had announced the
National Mission on Financial Inclusion titled, ‘Pradhan Mantri Jan
Dhan Yojana’(PMJDY). Now in less than a fortnight the country is geared up
to launch this mega event all across the country with the Prime Minister
himself launching it from the national capital. Simultaneous launch functions
of the Yojana are held in the state Capitals and at all district
Headquarters. Besides, camps would also be organized in the area allotted
to branches of the banks.
Now what is this Yojana and how it’s
going to be different from the earlier schemes…………
The PMJDY has been
conceived as a national mission on financial inclusion with the objective of
covering all households in the country with banking facilities and having a
bank account for each household. Financial
inclusion or inclusive
financing is the delivery of financial services at affordable costs to
sections of disadvantaged and low-income segments of society, in contrast to financial
exclusion where those services
are not available or affordable. It is said that since banking services are in
the nature of public product, the availability of banking and payment services
to the entire population without discrimination is the prime objective of
financial inclusion in public policy. With a bank account, every household
gains access to banking and credit facilities. This will enable them to come
out of the grip of moneylenders, manage to keep away from financial crises
caused by emergent needs, and most importantly, benefit from a range of
financial products/benefits. Describing
the task as “gigantic,” the Prime Minister in an email to all bank
officers has stressed the need to enrol over 7 crore households and open their
accounts on urgent basis as all their development activities are hindered by
this single disability.
Current status of financial inclusion
in the country:
Various initiatives were taken up by
RBI / GOI in order to ensure financial inclusion. These include like
Nationalization of Banks , Expansion of Banks branch network , Establishment
& expansion of Cooperative and RRBs ,Introduction of PS lending , Lead Bank
Scheme, Formation of SHGs and State specific approach for Government sponsored schemes to be evolved by SLBC
.During 2005-2006, RBI advised Banks to align their polices with the
objective of financial Inclusion. Further, in order to ensure greater
financial inclusion and increasing the outreach of the banking sector, it was
decided to use the services of NGOs/SHGs, MFIs and other Civil Society
Organizations as intermediaries in providing financial and banking services
through use of “Business Facilitator and Business Correspondent Model”.
However, as per Census, 2011, out of
24.67 crore households in the country, 14.48 crore (58.7%) households had
access to banking services. Of the 16.78 crore rural households, 9.14 crore
(54.46%) were availing banking services. Of the 7.89 crore urban households,
5.34 crore (67.68%) households were availing banking services. In the year
2011, Banks covered 74,351 villages, with population more than 2,000 (as per
2001 census), with banking facilities under the “Swabhimaan” campaign through
Business Correspondents .However the program had a very limited reach and
impact.
The present banking network of
the country (as on 31.03.2014) comprises of a bank branch network of 1,15, 082
and an ATM network of 1,60,055. Of these, 43,962 branches (38.2%) and 23,334
ATMs (14.58%) are in rural areas. Moreover, there are more than 1.4 lakh
Business Correspondents (BCs) of Public Sector Banks and Regional Rural Banks
in the rural areas. BCs are representatives of bank to provide basic
banking services i.e. opening of basic Bank accounts, Cash deposits , Cash
withdrawals, transfer of funds, balance enquiries, mini statements
etc. However actual field level experience suggests that many of these BCs
are not actually functional. Public Sector Banks (PSBs) including RRBs have
estimated that by 31.05.2014, out of the 13.14 crore rural households which
were allocated to them for coverage about 7.22 crore households have been
covered (5.94 crore uncovered). It is estimated that 6 Crore households in
rural and 1.5 Crore in urban area needs to be covered.
PMJDY
The mission mode objective of the PMJDY
consists of 6 pillars. During the 1st year of implementation
under Phase I (15th August, 2014-14th August,2015), three Pillars
namely(1)Universal access to banking facilities (2) Financial Literacy
Programme and (3) Providing Basic Banking Accounts with overdraft facility of
Rs.5000 after six months and RuPay Debit card with inbuilt accident insurance
cover of Rs 1 lakh and RuPay Kisan card, will be implemented.
Phase II, beginning from 15th August
2015 upto15th August,2018 will address (1) Creation of
Credit Guarantee Fund for coverage of defaults in
overdraft A/Cs (2) Micro Insurance and
(3) Unorganized sector Pension schemes like Swavlamban. In
addition, in this phase coverage of households in hilly, tribal and difficult
areas would be carried out. Moreover, this phase would focus on coverage of
remaining adults in the households and students.
The implementation strategy
of the plan is to utilize the existing banking infrastructure as well as expand
the same to cover all households. While the existing banking network would be
fully geared up to open bank accounts of the uncovered households in both rural
and urban areas, the banking sector would also be expanding itself to set up an
additional 50,000 Business correspondents (BCs), more than 7000 branches and
more than 20000 new ATMs in the first phase .A comprehensive plan is necessary
considering the past experience where a large number of accounts opened
remained dormant, resulting in costs incurred for banks and no benefits to the
beneficiaries. The plan, therefore, proposes to channel all Government
benefits (from Centre/State/Local body) to the beneficiaries to such accounts
and pushing the Direct Benefits Transfer (DBT) scheme of the Union Government
including restarting the DBT in LPG scheme. MGNREGS sponsored by Ministry of
Rural Development (MoRD, GoI) is also likely to be included in Direct Benefit
Transfer scheme.
Keeping the stiff targets in mind, in
the first phase, the plan would focus on first three pillars in the first year
starting from 15th August, 2014.The target for setting up
additional 50,000 BCs is quite challenging given the constraints of telecom
connectivity. In order to achieve this plan, phase wise and State
wise targets for Banks have been set up for Banks for the period 15th August,
2014 to 14th August, 2015. Roles of
various stakeholders like other Departments of the Central Government, State
Governments, RBI, NABARD, NPCI and others have been indicated. Gram Dak
Sewaks in rural areas are proposed as Business Correspondent of
Banks. Department of Telecom has been requested to ensure that
problems of poor and no connectivity are resolved. It is understood that of the
5.93 lakh inhabited villages in the country (2011 census) only about 50,000
villages are not covered with Telecom connectivity.
The major shift this time in this
Financial Inclusion effort of the Government is that households are being
targeted instead of villages as targeted earlier. Moreover both rural and urban
areas are being covered this time as against only rural areas targeted earlier.
The present plan pursues digital financial inclusion with special emphasis on
monitoring by a Mission headed by the Finance Minister.
While the film on ‘Financial Inclusion’
and the Mission Document on Financial Inclusion scheduled for release at
launch, are expected to help in creating awareness, the ‘account opening kit’
and the mobile banking facility on the basic mobile phone (USSD) envisaged on
the occasion indicates the concerns of the government to end financial
exclusion and usher in a new chapter in country’s governance for the people. In
Prime Minister’s own words this Pradhan Mantri Jan Dhan Yojana lies at the core
of this government’s development philosophy of Sab Ka Sath Sab Ka Vikas.
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