FM revises account opening target under Jan Dhan to 100 million

The initial target was 75 million. As of Nov 25, 80 million accounts have already been opened

The government on Thursday raised the target for new bank accounts under the Pradhan Mantri Jan Dhan Yojana from 75 million to 100 million by January 26, 2015.

As of November 25, 80 million accounts had already been opened under the scheme since its launch three months ago.

“This will amount to opening one account for each household in the country,” the finance ministry stated on Thursday, following Finance Minister Arun Jaitley holding a meeting on the Jan Dhan Yojana.

About half of India’s population doesn’t have bank accounts.

Changing the focus of the United Progressive Alliance government’s financial inclusion programme from individuals to households, the National Democratic Alliance government had identified 75 million families that didn’t have bank accounts. Many people who already had accounts had opened new ones under the Jan Dhan Yojana to avail of the free insurance cover and credit facility it offered.

At Thursday’s meeting, Jaitley said Aadhaar card numbers might be seeded with bank accounts, as this would help directly transfer subsidies to bank accounts of the targeted sections of society, under the Direct Benefits Transfer (DBT) scheme.

The statement said the finance minister also discussed the possibility of integrating the Jan Dhan Yojana with the National Rural Livelihood Mission by bringing it in line with self-help groups and integrating the Mahatma Gandhi National Rural Employment Guarantee Scheme with the DBT scheme.

Of the 80 million accounts opened under the scheme so far, public sector banks have accounted for 64 million, while regional rural banks and private sector banks have opened 13 million and two million, respectively.

Jaitley has called for more active participation by private banks.

In terms of deposits, only Rs 6,292 crore had been collected as of November 25, as 60 million accounts had zero balance.

The finance minister asked bankers to make efforts to try and ensure there were some deposits in all accounts through financial literacy programmes. He also asked officials to spread financial literacy to promote savings and awareness about other financial services. He said dovetailing of various central and state schemes in Jan Dhan Yojana accounts would help increase transactions in these.

The finance minister asked bankers to ensure availability and activation of RuPay cards issued under the Jan Dhan Yojana. He directed that the required number of banking correspondents should be roped in and their services be monitored.

Jaitley said opening accounts in a “sweep mode”, based on the results of a survey, to be conducted by the end of next month, should be expedited to ensure the target of 100 million new accounts is met by January 26.

Those who attended the meeting included Ravi Shankar Prasad, minister of communication and information technology; Chaudhary Birender Singh, minister of rural development; Hasmukh Adhia, secretary in the Department of Financial Services; L C Goel, rural development secretary; Rakesh Garg, secretary in the department of telecommunications; S S Mundra, Reserve Bank of India deputy governor and T M Bhasin, Indian Bank’s Association chairman.