Bankers Make A History Of Opening 1.5 Crore Accounts In One Day

PM launches Jan Dhan Yojna, 1.5 crore bank accounts opened on Day 1-Times of India 29.08.2014

NEW DELHI: Prime Minister Narendra Modi on Thursday launched his government's mega scheme 'Jan Dhan Yojana', declaring that it was aimed at eradicating financial untouchability by providing bank accounts to the poor.

On the inaugural day, a record 1.5 crore bank accounts were opened across the country, the largest such exercise on a single day possibly anywhere in the world.

Unveiling the scheme within 100 days of forming the new government, Modi said, it will cover 7.5 crore people by January 26, 2015, who will be provided zero-balance bank account with RuPay debit card, life insurance cover of Rs 30,000 in addition to accidental insurance cover of Rs 1 lakh.

Later the account holders will be provided an overdraft facility of up to Rs 5,000.

"If Mahatma Gandhi worked to remove social untouchability, if we want to get rid of poverty, then we have to first get rid of financial untouchability. We have to connect every person with the financial system. And for that this programme has been given impetus," he said, adding, "when a bank account is opened, it's a step towards joining economic mainstream."
Modi recalled the bank nationalization of 1969 with the avowed objective of spreading the reach of financial system to the doorsteps of poor. "But I regret to say that after 68 years of independence, not even 68 per cent of population is covered by the banking system," he said.

The scheme was simultaneously launched at multiple places by 20 chief ministers, several Union ministers, including information minister Prakash Javadekar at Pune, law minister Ravi Shankar Prasad at Chennai, external affairs minister Sushma Swaraj at Bhopal, home minister Rajnath Singh at Lucknow and HRD minister Smriti Irani at Surat.

There were in all 600 programmes and 77,852 camps on the opening day to open bank accounts.

 Modi said history has been created in the banking system with opening of over 1.5 crore account in a day. Besides, a record has been created by providing 1.5 crore accidental insurance covers of Rs 1 lakh.

The Prime Minister described the occasion as a festival to celebrate the liberation of the poor from a poisonous cycle ("Vish-chakra se gareebon ki aazaadi ka parv").
Full Video Lecture By Prime Minister Mr. Narendra Modi

 "Banks have assured me they will do this work before January 26. Those who oppen accounts by January 26, 2015 over and above the the Rs 1 lakh accident, they will be given life insurance cover of Rs 30,000. This will help the poor family," he said.

In the third phase, he said, these account holders would also be provided micro-pension facility.

"I believe when a person opens a bank account then he or she takes the first step to get connected with the economic system. Today the 1.5 crore family who got connected with the economic system this will give a boost to the economy," he said.

Going forward, he can avail Rs 5,000 loan from the bank, the Prime Minister said, adding, this facility would be available after six months of opening of the bank account.

Expressing satisfaction at a number of records being broken today, the Prime Minister said the nationwide success of the enrolment drive today would give confidence not just to the officials of the department of financial services and banking sectors, but also to officers across the Union government, that they can successfully achieve the goals that they set for themselves.

"Never before would insurance companies have issued 1.5 lakh accident insurance policies in a single day. Never before in economic history would 1.5 lakh bank accounts have been opened in a single day.

"Never before has the government of India organized a programme of such scale — over 77,000 locations — with the participation of so many chief ministers, Union ministers, government and bank officials," the Prime Minister said.

Top bankers sweat out in rural India to rope in un-banked homes-DNA

Far away from his plush headquarters, chairman of a mid-sized public sector bank is busy devising strategies, sitting in an unfamiliar setting -- a rustic tea shop in Kanhupur village in Odisha's Kendrapada district. He is stationed there for a week as part of the prime minister's Jan Dhan Yojana team from his bank, giving his officers moral boost in their long-drawn efforts to convince tribal communities to open bank accounts.

"Some of the families closed the door, saying that they don't need bank accounts. We have one more day to achieve our target in the village. Financial inclusion in tribal villages is difficult. But the district administration is also extending support in terms of manpower and basic infrastructure for the programme as they also have targets as facilitators," he said, sharing his concern over achieving the target in one day.

Urban branches of banks are nearly deserted with most officers including chairman and other top officers are in the field trying to meet their targets for the PM's flagship programme. On Wednesday evening, phone lines of most CMDs were not reachable as they were huddled in one of the thousands of camps the banks had set up.

Of course, the programme is an extension of the financial inclusion plan of the previous government, but Modi believes that calling it by another name and galvanising the 14 lakh bank employees giving them a tight deadline of a year may work better.

Jan Dhan programme plans to provide bank accounts to each un-banked household. It is estimated that around 7.5 crore households (six crore in rural and 1.5 crore in urban areas) will be linked to the banking system.

So, you like it or not, financial inclusion is happening in far-away villages like Gunji in Uttarakand, which is a 3-day trek from the nearest motorable road, located in the Chempawat district.

Bankers have however continued to face the real challenges of the financial inclusion programme. What is more worrying them is that each account also incurs an annual maintenance of about Rs 100. But, in the long run, the huge network of bank accounts is expected to plug the pilferage in the direct benefit transfers and banks hope to earn commissions by running government programmes. If worked well, this is a big advantage because the government and the banks can keep a tab on the beneficiaries of the subsidy schemes, says a banker.

Far-flung villages of Kazinapanuli, Kothera in Chemapat district in Uttarakhand, villages from Kedarnath and the hilly terrain of Himachal Pradesh will be linked to the banking system and to Delhi for direct benefit scheme.

Public sector banks together plan to set up 60,000 camps so that about 1 crore new no-frills accounts will be opened simultaneously when Narendra Modi launches the programme.

The basic bank account will be accompanied by RuPay debit card having inbuilt accidental insurance cover of Rs one lakh. Further an overdraft facility of up to Rs 5,000 will also be permitted to the Aadhar enabled accounts after the satisfactory operation of the account for at least six months.

State Bank of India (SBI), the country's largest bank, has targeted 20 lakh accounts by setting up 10,000 camps in rural and urban centres. Even small banks such as Andhra Bank are setting up over 2,000 camps with a target of 2.75 lakh accounts.

CVR Rajendran, chairman and managing director, Andhra Bank, said, "I am in east Godavari district trying to get people who got left out in our earlier exercise to be included.

Our biggest challenge is in the tribal areas and now the Naxal areas are more peaceful."
According to the targets submitted by 25 public sector banks to the finance ministry, banking network will reach at least 10,000 unbanked villages by 2016.

Each bank has submitted a detailed financial inclusion plan to the ministry of finance for implementation over the next two years. Aadhar numbers will be used to open the accounts and the accounts will be used for subsidy transfer.

Jan Dhan Yojana is a scheme which targets opening of at least fifteen crore accounts in the next four years. The plan is to provide at least two bank accounts in 7.5 crore households in the marginalised section of the society. The scheme will be monitored by a mission under the finance minister. For the checks and balance, both biometric and demographic data will be collected by the bank.

The maximum villages will be covered by the Allahabad Bank, which will cover 566 unbanked villages in 2015 and 888 villages by the end of March 2016, almost eight times more than its unbanked area coverage of 2014 at 121.

Similarly, SBI will almost double its number of unbanked village coverage from 608 in March 2014 to 1,108 in March 2016.

A senior official in the ministry of finance told dna, "The accounts will be opened on the basis of Aadhar numbers. Also these accounts will be used for transfer of subsidies under the Direct Benefit Transfer scheme."

To make the system fool proof, the government is looking at various ways. "The data of the account holders both demographic as well as biometric details will be collected while opening the accounts. They will then be issued biometric multi-function card. All the financial transactions will be through field devices, which will support multiple application," the official said.