Why Jan-Dhan Yojana is gaining currency in Uttar Pradesh & West Bengal

The two states account for 24% of total accounts opened under financial inclusion scheme

As the Modi government enters its third year, one of its flagship scheme — Jan-Dhan Yojana — seems to have more takers in Uttar Pradesh and West Bengal than any other state. Data show that the two states account for more than one-fourth of deposits accrued so far.

As of May 18, Jan-Dhan Yojana had garnered deposits of around Rs 37,775 crore. Of this, the share of Uttar Pradesh was Rs 5,916 crore, while West Bengal’s was Rs 4,932 crore. Thus, the two states accounted for nearly 29 per cent of deposits amassed so far.

Also, Uttar Pradesh and West Bengal account for 24 per cent of total accounts opened under the scheme. So far, about 219 million accounts have been opened under Jan-Dhan Yojana, of which around 57 million are zero-balance accounts.

One of the reasons for higher deposit mobilisation in Uttar Pradesh and West Bengal is the lack of formal banking facilities, particularly in rural areas in the two states, said an executive at a public sector bank. Moreover, in West Bengal, after the collapse of the unregulated financial sector due to the Saradha scam, there has been an increase in deposit collection from rural areas.  Notably, in West Bengal, of the total of about 19 million accounts under Jan-Dhan Yojana, nearly 13 million are rural accounts. In Uttar Pradesh, of the nearly 33 million accounts, close to 20 million are rural accounts.

Jan-Dhan Yojana, launched in 2014, envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension facility. In addition, the beneficiaries get RuPay debit card, with inbuilt accident insurance cover of Rs 1 lakh.

The plan also envisages channelling all government benefits from Centre, state and local body to the beneficiary accounts and pushing the Direct Benefit Transfer (DBT) scheme of the Union government.

Notably, according to banks, rural connectivity has turned out to be the single biggest challenge in implementing the plan. In addition, the account features of Jan-Dhan Yojana are highly restrictive. The withdrawal limit is Rs 10,000 per month and one can have a maximum deposit of only Rs 1 lakh.
CASHING IN ON MODI GOVT’S JDY
Jan-Dhan Yojana, launched in 2014, envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension facility