Jan Dhan Yojana Case Study
Jan Dhan Yojana: Many Unanswered Questions
Kavaljit Singh
On 28th August, an ambitious programme on financial inclusion - Jan Dhan Yojana (People’s Wealth Scheme) - was rolled out across the country amid much fanfare. The initial target of JDY is to cover 75 million unbanked households by 26th January, 2015 in both rural and urban India. The government claims that on the inaugural day, a record 15 million zero-balance bank accounts were opened across the country. Nowhere else in the world, such a large number of bank accounts have been opened on a single day. Another positive aspect of JDY is the creation of a web-portal which would report and monitor its implementation which was missing in earlier initiative.
There is no universally accepted …show more content…
A business correspondent (BC) is a representative of bank who provides doorstep banking services through the use of smart card handling devices which are connected to the main servers of the bank. The policymakers have supported branchless BC model as a cheaper alternative to physical branch-based …show more content…
They had opened such accounts last year to receive LPG subsidy under the direct benefit transfer scheme but are rarely used. In another bank, I found that the bank staff is asking a minimum deposit of Rs.500 for opening an account under the JDY. If such practices are widespread in a metropolitan city, one can well imagine the actual implementation of JDY in the rural and remote areas.
The JDY will be spearheaded by both state-owned and private banks though the bulk of task would be carried out by state-owned banks which have over 43000 branches in the rural and semi-urban areas. It is heartening to note that the government has realized the importance of state-owned banks in promoting inclusive development. But why foreign banks have been left out of JDY platform? There are 43 foreign banks operating in India with 332 branches. Since 95 percent of their branches located in the metros and urban locations, foreign banks should be given nominal targets under the JDY to serve the urban poor. This would force foreign banks to tweak their niche banking model as they “cherry-pick” the most profitable businesses and affluent customers residing in the metros and urban
Kavaljit Singh
On 28th August, an ambitious programme on financial inclusion - Jan Dhan Yojana (People’s Wealth Scheme) - was rolled out across the country amid much fanfare. The initial target of JDY is to cover 75 million unbanked households by 26th January, 2015 in both rural and urban India. The government claims that on the inaugural day, a record 15 million zero-balance bank accounts were opened across the country. Nowhere else in the world, such a large number of bank accounts have been opened on a single day. Another positive aspect of JDY is the creation of a web-portal which would report and monitor its implementation which was missing in earlier initiative.
There is no universally accepted …show more content…
A business correspondent (BC) is a representative of bank who provides doorstep banking services through the use of smart card handling devices which are connected to the main servers of the bank. The policymakers have supported branchless BC model as a cheaper alternative to physical branch-based …show more content…
They had opened such accounts last year to receive LPG subsidy under the direct benefit transfer scheme but are rarely used. In another bank, I found that the bank staff is asking a minimum deposit of Rs.500 for opening an account under the JDY. If such practices are widespread in a metropolitan city, one can well imagine the actual implementation of JDY in the rural and remote areas.
The JDY will be spearheaded by both state-owned and private banks though the bulk of task would be carried out by state-owned banks which have over 43000 branches in the rural and semi-urban areas. It is heartening to note that the government has realized the importance of state-owned banks in promoting inclusive development. But why foreign banks have been left out of JDY platform? There are 43 foreign banks operating in India with 332 branches. Since 95 percent of their branches located in the metros and urban locations, foreign banks should be given nominal targets under the JDY to serve the urban poor. This would force foreign banks to tweak their niche banking model as they “cherry-pick” the most profitable businesses and affluent customers residing in the metros and urban