Jan Dhan Yojna

Government collects Rs 1.
16 lakh crore under

Jan Dhan Yojana
Tuesday, 30 December 2014 - 7:30am IST | Place: Mumbai | Agency: dna
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Total of 5.8 million accounts registered under Pradhan Mantri Jan Dhan Yojana till September 2014; PMJDY and financial inclusion programme created
8.8 million accounts
The Pradhan Mantri Jan Dhan Yojana (PMJDY) has collected Rs 1,16,500 crore in savings in the first half-year period
ending September 2014, registering about 5.8 million accounts, according to the data put out by RBI in its Financial
Stability Report released on Monday. The PMJDY project may be replicated to include the provisions of insurance
and pension services for the common man. PMJDY and the financial inclusion programme together have created 8.8
million accounts with outstanding balance of Rs 1,16 500 crore until September 30, 2014.
Banking outlets, which includes ATMs, bank branches and business correspondents, increased by 62,948 in the first
half year period up to September 2014, taking the total banking outlets to 446,752 resulting in higher transactions
during this period.
As a result of these initiatives, RBI said more bank finance flowed into the rural segments. The Kisan credit cards,
which reflect the flow of credit towards farm sector entrepreneurial activities, increased by 1.2 million transactions
during the half year and general credit cards used for non-farm entrepreneurial activities, increased by 1.3 million
transactions.
RBI adviced banks that while offering the overdraft facility of Rs 5000, they will need to follow proper due diligence
and satisfactory operations in the account for six months. The accounts will also have an accident cover.
A senior official, who is in charge of financial inclusion in his bank, said, "Howevergovernment has added riders for
all the benefits. For example, if the insurance money is to be claimed then the Rupay card has to be swiped at least
once in the past 45 days. The account has to be opened in the name of the head of the family only then are they
eligible for insurance. So have to now undertake a lot of due diligence."
RBI along with the banks have been implementing the financial inclusion programme in the unbanked areas from
2010. The accounts opened were called basic savings and basic deposit accounts, which were essentially zero
balance and no frills accounts. The timeline for providing banking services to villages with a population of 2000 under
the road-map may be advanced to August 2015 from the earlier date of March 2016.
Banks open 10 cr Jan Dhan Yojana

accounts but 75% have no money in
them
by FP Editors Dec 29, 2014 11:33 IST
#DBT #finance ministry #HowThisWorks #Jan Dhan Yojana #LPG #PMJDY #Subsidy #zero balance accounts
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There's no surprise here. The number of bank accounts opened under the Prime Minister's Jan Dhan Yojana
(PMJDY),Narendra Modi's ambitious financial inclusion programme, has breezed past the government's target much
ahead of time.
According to the data available on the PMJDY website, banks have opened as many as 10.09 crore accounts accounts
as of 26 December. Of this, 8.03 crore accounts have been open by public sector banks, 1.8 crore by regional rural
banks and a minuscule 27.13 lakh by private sector banks. The total balance in the accounts stand at Rs 7,778.42
crore.
And of the total accounts, nearly 75 percent, or 7.41 crore, have no balance.
That the government-set target will be met and also surpassed well before the deadline was a foregone conclusion
given the fever pitch with which the banks were opening accounts as they were under immense pressure from the
government to make the programme a success.
Reuters
While launching the scheme the prime minister had set a target of 7.5 crore accounts by 26 January. In order to make
the account opening easy, some of the norms were also relaxed. The Reserve Bank of India had given a six-month
leeway for low-risk customers to submit their KYC documents to open the accounts. As the banks stepped up opening
of the accounts, the government also raised the bar by increasing the target to 10 crore accounts by 26 January.
In fact, the government is eyeing an entry in the Guinness World Records for opening maximum number of bank
accounts in the least time.
As Firstbiz had earlier reported, "bankers were put at gun point to meet the targets, in turn, forcing them to offer
accounts to everyone on the street, who meet or do not meet minimum KYC requirements".
Many bankers, on the condition of anonymity, had even expressed their apprehensions about the scheme as, in their
desperate bid to meet the target, they were conveniently forgetting the know your customer norms.
The finance ministry, meanwhile, has highlighted PMJDY as one of its biggest achievements in the past six months.
According to a PTI report, the other achievements listed by the ministry include Varishtha
Pension Bima Yojana (VPBY) and actions taken to curb black money.
"As on December 1, states of Goa, Kerala, Tripura and Madhya Pradesh, Union Territories of Chandigarh, Puducherry
and Lakshadweep have achieved 100 per cent Saturation (all households with at least one bank account)," the report
said citing a press release.
While financial inclusion is a much needed policy initiative to weed out poverty and bring the unbanked under formal
banking, what is raising concern is the pressure being put on the banks. Moreover, as is visible in the above statistics,
there is an unfair burden on public sector banks which is likely to affect their profitability and also result in rampant
misuse of such accounts by hawala operators.
Such fears apart, one good thing about the scheme would be that these accounts will be helpful in successfully rolling
out the direct benefit transfer (DBT) of cash subsidies. The government started DBT for LPG on 15 November in 54
districts. From 1 January, it will be launched all over the country.
Eventually, the plan is to bring all subsidy schemes, including food subsidy and NREGA, under DBT. That would
mean all the Jan Dhan accounts will see cash transfers, making all of them operational and helping banks break even
these accounts.
Until such time, however, banks will have to bear the burden.
Jan Dhan Yojna next stage of social, economic development'

PTI Aug 15, 2014, 09.35PM IST
Tags:
Washington|
united states|
South Asia|
Prime Minister|
Narendra Modi|
Jan Dhan Yojna|
Franklin Templeton Investments|
Financial Services|
economy|
Economic Development|
Diane Farrell|
Business Council
(American investors are)
WASHINGTON: Hailing Prime Minister Narendra Modi's 'Jan Dhan Yojna', the US-India Business Council (USIBC) today described it as an
"important step" toward the next stage of India's social and economic development.
In a statement, USIBC said Modi's announcement of "a new pan-India comprehensive financial inclusion plan that expands access
to financial services to a wider cross-section of India's citizens" is "an important step toward the next stage of India's social and economic
development".
American investors are grateful for the Government of India's stewardship of the Indian economy, said the USIBC acting president Diane
Farrell.
"USIBC looks forward to continuing to bolster industry's engagement across pensions, payments, banking, insurance and asset
management," she said.
Modi today launched 'Pradhan Mantri Jan Dhan Yojana' to help the poor open bank accounts which will come with the facility of a debit card
and an insurance cover of Rs 1 lakh.
"India is at a cross road with a unique opportunity to reinvent their approach to financial inclusion," said Vijay Advani, USIBC Board Member
and executive vice president of Franklin Templeton Investments.
"I am very pleased that the Government of India is focusing on financial inclusion given that many Indians do not have access to basic
banking and financial services," he said.
"While the household savings rate is high in India, most of these savings find their way into unproductive physical assets such as gold and
real estate. Any efforts to increase the share of financial assets and channel the high savings into capital markets, through financial
institutions such as banks, mutual funds and insurance companies would be a positive for investors and the economy at large," Advani said.
The goal of ensuring access to affordable financial services including banking, investments, credit, insurance, pension facilities and most
importantly, financial literacy appears to be within the reach of India's vast population, he said.
"A lot, however, depends on how various components of this plan come together and how effectively the Government is able to scale up
participation from the private, public and social sectors," Advani said.
"We are pleased to see the focus & strong commitment that Prime Minister has made to financial inclusion drive. Strong execution of these
actions will enable acceleration of economic growth," said Kiran Shetty, regional vice president & managing director, South Asia, Western
Union.
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For a country like India that has been facing a huge financial exclusion, the launch of Jan Dhan Yojanascheme is an ambitious
attempt that will provide the citizens with access to basic financial services. Prime Minister Narendra Modi had mentioned in his
Independence Day address to the nation about starting with a scheme towards financial inclusion and today mega functions and
camps are being organised across the country to mark the launch of this scheme.
Under Jan Dhan Yojana, the person who opens a bank account will get a Rupay debit card and the family will get a rupees one
lakh insurance.
The non-banking population of India is vast,with most of them residing in rural areas. These are economically weaker sections of
the society who do not have access to financial services and are unaware of the available facilities in the country. Usually they are
forced to borrow from moneylenders or from relatives and friends. Moreover, with no access to insurance services they are unable to
protect their available financial resources when unforeseen circumstances arise.
With income inequality being excessively wide, India has been in need of a revolutionary reform to include the poorest of the poor in
the development process. To this respect, Jan Dhan Yojana is been waited with much anticipation as the poor can greatly benefit
from it and become a part of the economic development process in the country. This new scheme can also contribute towards
raising awareness about the various insurance policies available, to which many are ignorant in India. It will benefit villagers in rural
areas where there are no bank facilities. Through the use of technology, the scheme may prove to be a winner for both government
and the public.
If every Indian has a bank account, then Direct Cash Transfer scheme can be implemented which will potentially destroy the
corruption and leakage in Public Distribution System (PDS).
While India has witnessed economic growth in the past decade, we still face challenges when it comes to implementing public
policies. Mainstream financial institutions like banks have an important role to play. The scheme is a great move, provided the
beneficiaries are genuine ones. Further, there exist apprehensions that the scheme may fall into corrupt hands with the benefits of it
never reaching the people of the rural areas; the target group of the scheme being villagers, most of who fall under the uneducated
lot. The scheme should ensure that there is complete transparency to its functioning with no middlemen activities of any kind.
Banking is an essential global business, and its importance can be felt even more in developing countries where banks can help the
poor to invest, borrow and save. With globalisation, it has become viable and profitable to engage in business with the poor,
provided they are able to engage in dealings. It is expected that with the new scheme, India will soon have cashless transaction that
is lined with other developed countries.
In the previous UPAs financial inclusion programme, Know Your Customer (KYC) was a cumbersome process, which often
restricted account openings. Compared to Jan Dhan Yojana, it did not give emphasis on urban financial inclusion. Rural migrants
working in towns and cities faced the difficulties in getting access to banking services but now with the new scheme they can open
bank accounts and avail the benefits intended for them from any part of the country.
The aim of Jan Dhan Yojana is commendable as there is free accidental coverage and one can open a bank account with zero
balance even without KYC papers. It is said that effectiveness of this new scheme would depend on how fast the banking system
improves delivery of services, availability of more players in the financial ecosystem and introduction of technology-based financial
services.
The whole banking system for rural population gets revolutionized in one stroke. We have been hearing the phrase financial
inclusion for quite some time now, but nothing tangible has ever phased out at the level that was expected. With the new scheme
making extensive talks, it surely arouses yet another hope towards inclusion in the development process. Jan Dhan Yojana, along
with aiming for financial inclusion, should also seek to enhance development and growth in the country.
Valentina Telien Kom
Image Source [Google]

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Rural banking: PM Narendra Modis Jan Dhan

Yojana will be the trigger for profitability for
PSBs, says Crisil
By: PTI | New Delhi | November 17, 2014 9:08 pm
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While the Jan Dhan Yojana poses challenges for banks in the short-term, in the longer-term, it would augment business per branch: Crisil (Narendra
Modi photo by PTI)
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Higher business per branch and the business correspondents model may help public sector banks become profitable in rural areas
over the next five years, driven primarily by ongoing Pradhan Mantri Jan Dhan Yojana, says a report scheme was launched by
PM Narendra Modi with much fanfare on August 28.
Rural branches have been logging in 7 per cent growth in the past five years, while branch expansion by state-run banks was
growing at a compounded annual rate of 9 per cent during the same period, as per the report which added that ongoing Jan Dhan
scheme will be the trigger for profitability.
Narendra Modi had given a call for eradicating what he termed as financial untouchability of the poor by opening at least one
bank account for every family in the country in less than six months under the Jan Dhan Yojana.
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Increasing economies of scale (with higher business per branch) and usage of low-cost channels such as business correspondents
(BCs) will help public sector lenders, who are currently incurring losses in their rural operations, to turn in profits over the next
five years, Crisil said in the report here today.
It said the newly-launched Jan Dhan scheme is likely to increase the economies of scale in the years to come. While the Jan Dhan
Yojana poses challenges for banks in the short-term, in the longer-term, it would augment business per branch, it said.
The Jan Dhan Yojana, the brainchild of PM Modi, aims at eradicating financial untouchability by providing bank accounts to the
poor.
Crisil said as for private banks, rural operations are mildly profitable already, generating a tenth of their overall returns, and the
situation will get even better.
Rural banking was shunned by banks because of the unfavourable economics involved in the model and they started
implementing only in the last decade or so under regulatory and policy compulsion.
Crisil said during the last five years, business per branch in rural areas has grown at a compounded annual growth rate of 7 per
cent, despite the overall branch network growing at 9 per cent annually.
Banks are also bringing down operating expenditure and expanding rural reach by experimenting with smaller branches and
increasingly using BCs, as per the report.
Going forward, more such models are expected to be adopted, leveraging technology, it said.
Improvement in technology and favourable regulations have made it possible for banks to service their rural customers through
business correspondents at about a 15th of the cost of a rural brick and mortar branch, which is about Rs 100-110 per
transaction, Crisil senior director for industry and customised research Prasad Koparkar said.
We expect 25-30 per cent of liability-side transactions in rural areas to be routed through BCs by FY19, up from 8-13 per cent
currently, he said.
The report further said the asset quality will also improve as credit bureaus and research agencies penetrate deeper into the
countryside, and as economic growth picks up.
TAGS: Indian Economy Jan Dhan Yojana Modi News Narendra Modi
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PM Jan Dhan Yojana provides opportunity for

digitising financial transactions for poor
SEP 04, 2014
ALIYA ABBAS
#DIGITAL INDIA
#IN-DEPTH
#JAN DHAN YOJANA
Union Finance Minister Arun Jaitley and SBI Chairperson Arundhati

Bhatacharya during the launch of digital banking initiative sbiINTOUCH on
the occasion of 60th foundation day of the bank in New Delhi. File Photo PTI
After successfully launching Pradhan Mantri Jan Dhan Yojana (PMJDY)
which ensures financial security for the poor and gives them the benefit of
banking services along with insurance of Rs 1 lakh, the Modi Government

must expand services which lets these poor use the facility of mobile banking
and electronic transfer of funds.
In fact to further enhance financial equality amongst all marginalised people
across the country, Narendra Modi Government can take a cue from the World
Bank report which talks about digital payments as an option to enable billions
of people who do not have access to the banks. In India, Pradhan Mantri Dhan
Jan Yojana can become the instrument to provide banking services as well as
means to utilise digital financial transaction opportunities.
The report, titled The Opportunities of Digitising Payments and published
by The Guardian says that this measure of bringing the poor under the
purview of electronic and mobile banking will spur economic growth and also
reduce income disparity in their respective countries. The Report further
states that building on a telecom revolution which has connected billions of
poor people across the globe, now mobile banking should be encouraged and
propagated widely. This report argues that G20 countries should target digital
payments as a channel to help people access basic banking facilities, which it
says will encourage saving and reduce theft and corruption.
The Opportunities of Digitising Payments says, Rapid development and
extension of digital platforms and digital payments can provide the speed,
security, transparency and cost efficiency needed to increase financial
inclusion at the scale required to achieve G20 goals.
Further explaining the report, The Guardian has quoted, Managing Director of
the Better Than Cash Alliance, Ruth Goodwin-Groen who said, Digital
payment services such as Kenyas M-Pesa mobile money, prepaid debit cards
for Syrian refugees in Turkey, and electronic bank transfers are helping people
save money securely in formal banks.
The World Bank report also cites examples of how other countries can benefit
from these measures. Ruth further states, When were looking at large
emerging economies in the G20 the Indonesias, the Brazils, the Mexicos
there are huge opportunities in those economies to transition their cash
payments to electronic payments, she said. But what works in each context
is what is appropriate it depends on the country youre looking at.
Moreover, the system when implemented properly will help India to tap the
flow of the money, thus enabling Modi Government to curtail corruption to a
large extent. The report also cites concerns especially in view of terror attacks
and digital payments which are vulnerable to electronic thefts. For instance,
the news daily highlights the example of Barclays Bank which had apparently
closed the accounts of a Somalian company, Dahabshiil, fearing that the
money sent electronically could be intercepted and used by Islamist terror
group al-Shabaab. Since terrorism is also a major concern for India, it can
benefit by utilising digital system which can be intercepted by any
investigative agency in case such a situation arises out.
According to the report, several thousands of marginalised people heavily
depend on remittance transfers, which add up to about $514bn a year, leaving
them exposed to high fees and slow transfer speeds, and digitised systems can
reduce this burden if implemented properly. Citing another example, the
report says that the Governments and consumers, financial providers in subSaharan Africa are still bearing high costs of cash payments, which are mainly
associated with manual acceptance, record keeping, accounting, storage,
security and transportation. The Government of India can implement the
system which can reduce this burden to a large extent.
According to Leora Klapper who is an economist with World Banks
development research group, said, We interviewed people in 150 countries on
how they save, borrow, make payments, manage risk. The data strikingly
shows very low usage of simple ownership of accounts in developing countries,
particularly among women, especially in rural areas.
Interestingly, the research was conducted in about 150 countries, including
Brazil, India, Kenya, Nigeria, the Philippines and South Africa. The research
further says that digital payment services will reduce the cost of sending
money both domestically as well as internationally and will also transfer
money quickly and safely.
The report states that it has been proven that digital payments are helpful in
reducing the cost of sending and receiving. Moreover, it increases security,
and betters the goal of broader financial inclusion by not only increasing the
ownership of accounts but also usage because people are receiving regular
payments. And this is what has been Narendra Modis vision a vision to
bring the marginalised segment under the broader programme of financial

inclusion.
The Guardian further reports that G-20 delegates will be meeting in
November this year in Australia, where they will be debating upon the future
of the world economy. The World Bank also urges leaders of the world to
discuss how they can include a broad-based digital financial system to fight
against poverty. The report also highlights the need of greater participation of
women in the economy, including greater access to payments.
Even the Finance Minister Arun Jaitley in his Budget speech on July 10 had
announced the Governments intention to include financial inclusion of poor,
minorities and every citizen of the country.
Modi: Banking for all to end "financial

untouchability"
BY MANOJ KUMAR
NEW DELHI Thu Aug 28, 2014 7:37pm IST
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Prime Minister Narendra Modi speaks during the launch of the Jan Dhan Yojana, or the Scheme for People's Wealth, in New Delhi August 28, 2014.
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(Reuters) - Prime Minister Narendra Modi promised on Thursday to end "financial untouchability" with a scheme to ensure
the majority of households in his country of nearly 1.3 billion people has a bank account within months.
If successful, the scheme could help mend strained state finances by better targeting billions of dollars in welfare spending as
well as relieving poverty in a country where about 40 percent of the population has no access to banking.
"Mahatma Gandhi tried to end untouchability in the society," Modi said, referring to modern India's founding father and his
drive to stamp out bias based on the traditional caste system.
"If we want to eradicate poverty, we need to get rid of financial untouchability," he said.
"If forty percent of Indians are not a part of the economy, how can we be successful in eradicating poverty?" Modi asked.
The government said nearly 15 million people opened accounts at centres around the country on the first day of the
programme. The goal is to open 75 million accounts by January next year.
The campaign to bring the masses closer to the financial system could improve measurements of economic growth and
bolster Modi's popularity among the poor.
Under the scheme, the government will give account holders a debit card and accident insurance cover of up to 100,000
rupees ($1,654). Good customers would also be eligible for an overdraft facility of up to 5,000 Indian rupees after six
months.
Earlier this month, Raghuram Rajan, governor of the Reserve Bank of India, said bank profitability was crucial for the
success of the scheme, which could help break a link between poor public services and corruption.
Some critics fear the overdraft facility could end up swelling bad loans at banks as it does not spell out how the banks can
collect debts.
CUT WASTE AND CORRUPTION
Bad loans at Indian banks rose to 4.1 percent of gross advances in March from 2.4 percent in March three years ago, the RBI
said in its annual report last week. Restructured loans, meanwhile, rose to 5.9 percent of gross advances in March from 2.5
percent in June 2011.
The debit cards use the state-run RuPay payment system, designed as an alternative to Visa and MasterCard. Modi, whose
Hindu nationalist ideology emphasizes Indian pride, wants the indigenous system to be accepted globally.
"We know about the popular Visa cards should we not have the intention that our RuPay card works in any country
globally?" he said.
The launch of the Jan Dhan Yojana (Scheme for People's Wealth) came weeks after Modi blocked a global trade deal, saying
it threatened the interests of poor farmers.
One reason cited for India's opposition to the trade deal was that it could limit the country's room to provide subsidized food
grain. That problem could be side-stepped by a shift to cash transfers of welfare payments, made possible by bringing
farmers into the banking system.
Such targeted welfare programmes have been credited with poverty reduction in several Latin American nations.
By paying benefits directly into bank accounts, the scheme could cut waste and corruption that inflate India's $43 billion
subsidy bill, equivalent to more than 2 percent of its GDP, for handouts of grain, fuel and fertiliser.
The push for greater financial inclusion would also diminish the influence of moneylenders and other informal financing
channels that operate outside the ambit of the Reserve Bank of India (RBI), blunting its monetary policy tools.
The drive for universal banking access is not new but the failure to provide services tailored for the poor and low-income
groups has kept India way off its goal.
Many accounts opened in the past lay idle, an issue the government hopes to overcome by using them for subsidy payments.
While not all areas in the country are close to formal banks, new rules allowing mobile phone companies and other
companies to act as banks could help leapfrog such infrastructure deficiencies.
(Additional reporting by Aditya Kalra; Writing by Frank Jack Daniel; Editing by Tom Heneghan)
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Jan Dhan Yojana features in Guinness Book of

World Records
PTI
New Delhi Last Updated: January 20, 2015 | 20:22 IST
FM Arun Jaitley
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As many as 11.5 crore bank accounts have been opened under the Pradhan Mantri Jan Dhan
Yojana , exceeding the enhanced target of 10 crore and covering 99.74 per cent of
households, Finance Minister Arun Jaitley said on Tuesday.
"Most of India today is included in the banking system," he said, adding that more than Rs 9,000 crore
has been deposited in the Jan Dhan accounts.
Prime Minister Narendra Modi announced the financial inclusion scheme in his first Independence
Day speech last year. It was launched in August with a target to open bank accounts for 7.5 crore poor
persons by January 26, 2015. The target was later increased to 10 crore accounts.
Addressing a press conference in New Delhi, Jaitley said the government would use these bank
accounts to pass on benefits to individuals under its various social security schemes.
Financial Services Secretary Hasmukh Adhia said that even Guinness Book of World Records has
recognised the achievements made under PMJDY.
In its citation, the Guinness Book said: "Most bank accounts opened in one week as part of the
Financial Inclusion Campaign is 18,096,130 and was achieved by the Department of Financial Services,
Government of India from August 23 to 29, 2014." Exclusion of a large number of people from the
banking network was inhibiting growth, Jaitley said. "Financial Inclusion is one of the top most priorities
of the government. PMJDY is the biggest financial inclusion initiative in the world."
He said that out of the accounts opened, 60 per cent are in the rural areas and 40 per cent in the
urban areas. Share of female account holders is about 51 per cent.
Jaitley said that RuPay cards have been issued to more than 10 crore beneficiaries who will get a
benefit of personal accidental insurance of Rs 1 lakh besides a life insurance cover of Rs 30,000 for
eligible beneficiaries.
Describing the scheme as "a game changer for the economy", the minister said that it would provide
the platform for Direct Benefits Transfer (DBT) and help in plugging leakages in subsidies.
Overall, public sector banks alone opened 9.11 crore accounts under PMJDY, followed by regional rural
banks which opened about 2.01 crore accounts. On the other hand, 13 private sector banks together
open just 37.58 lakh accounts.
According to Adhia, all these accounts are being used for payment of wages under the MNREGA
scheme and LPG subsidy. More than Rs 33,000 crore towards MNREGA, LPG and other benefits will be
routed through the bank accounts annually.
On the future of the scheme after January 26, Jaitley said the government will take a view on it later.
Responding to a question of duplication of accounts, the minister admitted that there might be some
such cases and that was the reason for enhancing the target to 10 crore accounts.
The issuance of the RuPay cards to account holders would encourage use of plastic money and help in
moving towards a cashless society, Jaitley said.
The proposal to provide overdraft facility in such accounts would also act as micro finance and prevent
people from taking loans at exorbitant rates from money lenders.
Jaitley said that most of the country has been covered by the PMJDY, except those areas which have
poor connectivity, are impacted by left-wing extremist and are inaccessible.
Over 20 companies to support Jan Dhan Yojana

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Over 20 Indian, U.S. and other international private sector organisations will partner with USAID in supporting the central
governments Jan Dhan Yojana programme, a statement said on Wednesday.
According to the US Agency for International Development (USAID), the initiative is part of President Barack Obamas pledge to
back Indias initiative to provide its citizens with access to financial services and lay the foundation for a world-leading, inclusive
digital economy.
With support from the World Economic Forum, these partners, in consultation with the government of India, will join in
establishing a public-private partnership to expand the ability of Indian consumers and businesses, the statement said.
The initial partners represent six categories of organisations - fast moving consumer goods companies, banks, payment networks,
mobile network operators, e-commerce, and leading civil society organisations including Axis Bank, Bharti Airtel, Coca-Cola, ITC
Limited, MasterCard, SnapDeal among others.
USAID looks forward to working with each to make financial inclusion a long-lasting and sustainable reality in India, it said.
Under the Jan Dhan initiative, over 110 million new households have received bank accounts, which entitle them to debit cards and
other financial tools needed to participate in the formal economy.
These efforts have caught the attention of the world and showcase Indias global leadership in building an inclusive economy, said
the statement.
Keywords: Jan Dhan Yojana, Obama support
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Jan Dhan Yojana likely to boost rural spend in 2015-16
Mahua Venkatesh, Hindustan Times, New Delhi
|
Updated: Feb 25, 2015 10:55 IST
Prime Minister Narendra Modi at the launch of Pradhan Mantri Jan Dhan Yojna at Vigyan Bhawan in New Delhi. (Mohd
Zakir/HT Photo)
Boosted by the opening of new zero-balance savings accounts under the Pradhan Mantri Jan Dhan
Yojana, consumption demand from the rural sector, with about 70% of Indias poulation, is likely to
surge in 2015-16.
Account holders under the scheme will not only be eligible for loans after six months, but subsidy
amounts from other govt schemes will also be directly transferred to these accounts. This will give a
fillip to rural activity and demand, which in turn will help the economy grow.
The government may target a growth rate of 7.8-8% for 2015-16, a senior government official said.
It (opening of bank accounts) does have the potential to perk up rural activity and demand, and a
regular monsoon spell would supplement this. However, overall economic activities would also have to
improve, DK Joshi, chief economic adviser, Crisil, told Hindustan Times.
Over 115 million bank accounts have been opened under the scheme, according to official reports.
According to an internal research by the State Bank of India, these new savings accounts are likely to
make rural discretionary spending jump up.
The increase in rural wages in 2014-15 has been slow. This is especially after lower spendings on the
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) by the government, and
a narrower increase of the minimum support prices (MSP) of agricultural products. MSP is an
intervention by the government to insure agricultural producers against any sharp fall in farm prices.
Official sources said the government was watching the sector with a keen eye to fuel the rural
economy.
A few years ago, when urban demand remained flat, it was the rural sector which helped in pushing
the growth rate.
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Jan Dhan Yojana has helped poor, but financial inclusion still far off According to a World Bank survey in
2012, only 35% of adults in India had access to a formal bank account and only 8% borrowed from
institutional and formal sources Vishwanath Nair Tweet inShare Tweet 0 inShare Comments Subscribe
to: Daily Newsletter Breaking News Editor's picks Will the elephant overshadow the dragon? Infosys
innovation push off to a slow start Allowing FDI in retail is a desirable way to proceed: Arvind
Subramanian Inside the AIIMS ecosystem Narendra Modi taps public in battle over a new land law (Left
to right) Vishwavir Ahuja, MD and CEO of RBL Bank; Romesh Sobti, MD and CEO of IndusInd Bank;
Vikram Akula, chairperson of Vaya Finserve; Tamal Bandyopadhyay, consulting editor, Mint; Vijay
Mahajan, chairman of Basix Group; V. Vaidyanathan, chairman and MD of Capital First, and Alok Prasad,
CEO of MFIN, at the Mint Annual Banking Conclave 2015, in Mumbai. Photo: Abhijit Bhatlekar/Mint Even
as the Prime Ministers Jan Dhan Yojana (PMJDY) has helped a majority of poor households in India open
bank accounts, there are many activities of financial inclusion still pending fulfilment, said a panel of
experts at the annual banking conclave organized by Mint on Thursday. The panel consisted of senior
officials from the banking and financial inclusion space, including Vijay Mahajan, chairman, Basix
Group; Vikram Akula, chairperson, Vaya Finserv Pvt. Ltd; V. Vaidyanathan, chairman and managing
director, Capital First Ltd; Alok Prasad, chief executive officer, Microfinance Institutions Network (MFIN);
Romesh Sobti, managing director (MD) and chief executive officer (CEO), IndusInd Bank Ltd, and
Vishwavir Ahuja, MD and CEO, Ratnakar Bank Ltd (RBL). Vaidyanathan of Capital First said exclusion of
the urban poor was one of the most important issues overlooked by the banking industry. There is a
lot of exclusion, right under our noses, in the urban territories. That has often gone unnoticed,
unreported and unattended. So, when we talk of financial inclusion, Id wish that we bring the urban
poor into the agenda. That would make a big difference, he said. According to World Banks Global
Financial Inclusion Survey (2012), only 35% of adults in India had access to a formal bank account and
only 8% borrowed from institutional and formal sources. As on 29 January, banks had opened nearly
124 million accounts under the Prime Ministers financial inclusion scheme, according to data on the
PMJDY website. Of this, nearly 74 million were in rural areas, and the rest in urban areas. Another issue
plaguing the banking system is the lack of credit available to those who had opened accounts under
the financial inclusion agenda even before PMJDY came into being, Vaidyanathan pointed out. The
credit facility is available to not even 10% of the current lot of customers. So there is financial inclusion
in terms of account opening, but there is exclusion in the credit given to the same customer, he said.
But while talking of credit facilities to the poor and excluded, the banking system also needs to be
careful that these loans are not faced with frequent loan waivers by politicians, the group noted.
According to Mahajan of Basix, though India is home to a large population of youth, this population is
also unskilled and poorly educated. He estimated that each young person would need about
Rs.60,000-70,000 for skilling purposes in order to make them employable. But this cannot be done by
the government because it will bust the fisc. So it has to be done through bank loans... We need a
guarantee that if these loans are given by the crores, they should be protected in terms of repayment.
There should be a mechanism of Aadhaar-based recovery of those loans, Mahajan said. The panel also
discussed the innovations of the banking system in making financial inclusion a viable business
strategy. Sobti from IndusInd Bank said the banking system had already invested Rs.1,400-1,500 crore
under PMJDY, which has helped banks accelerate the implementation of technology and complete
processes such as know your customer, which would have otherwise taken longer. He also talked about
the viability of conducting business while ensuring financial inclusion is not affected. Unlike urban
areas, where fee is a major contributor to business growth, rural businesses would have to be focused
on lending to the population there, he said. We (IndusInd Bank) have focused on an asset-led strategy
where we have given three quarters of a million dollars to the rural poor, Sobti said. Akula, who is also
the founder and former chairperson of SKS Microfinance Ltd, said the best way to make financial
inclusion viable is to bring in multiple products for the customers. RBL has formed a special core
banking solution for financial inclusion which has helped cut costs and improve efficiencies, said Ahuja.
About 55% of the banks loan book is tilted towards micro, small and medium enterprises and lending
towards agriculture and rural opportunities, he said. Prasad of MFIN said that while it was important to
make the segment financially viable, it should be ensured that lending was based on sanity and not
vanity. He discussed the example of the microfinance industry where some players had indulged in
profiteeringinstead of profiting from the businesswhich led to a crisis in 2010. He also pointed how
the sector had now learned from its mistakes and was coming back to profit, despite strict regulatory
conditions. The panel also discussed the advent of small and payments banks, while talking about the
challenges and opportunities that they are likely to face. The Reserve Bank of India announced final
guidelines for licensing of small and payments banks on 27 November. These banks are aimed at
serving customers who do not have access to the formal banking system. India will need at least 50
small banks in the next five years, Vaidyanathan said. According to Mahajan, a small bank would need
to develop a deposit base of at least Rs.1,200 crore to be viable for business. This was likely to take a
few years and could play as a valley of death for many new players, he added. When it comes to
competition, established banks need not need be wary of small and payments banks, but rather learn
about the innovative technology and business models that they will bring in to the banking space, said
Sobti.
Why the RBI Governor warned about Jan Dhan Yojana
Simplus Information Services Tue 7 Oct, 2014 4:28 PM IST
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Banks have seen deposits worth Rs 1,500 crore as part of the Jan Dhan Yojana, Prime Minister Narendra Modi said in his speech in
New York recently. He added that four crore new accounts have been opened.
In a country, where majority have no access to banking services, this should come as good news. Yet, there is one person who is wary
of this growth.
RBI Governor Raghuram Rajan issued a warning recently about the Jan Dhan Yojana, asking banks to be careful about the rollout.
Here is your five-point cheat-sheet on the matter:
What is Jan Dhan Yojana: This the scheme announced by Prime Minister Narendra Modi to encourage more people to
open bank accounts. As part of the scheme, people would be able to open accounts easily with limited documentation. They would
also be given a RuPay debit card, life insurance cover of Rs 30,000 and an accidental insurance cover of Rs 1 lakh. Those who have
money in the account could even have access to an overdraft facility. The facility is like a cheaper loan for a shorter period of time,
through which customers can withdraw more money from their accounts than possible.
Aggressive push: The Jan Dhan Yojana targets to encourage 7.5 crore new bank accounts by January 26 the Republic Day.
This gives banks five months to push the scheme aggressively. This is much higher than the six crore accounts opened in the entire
fiscal last year. On the first day itself, as many as 1.5 crore accounts were opened.
Warning: On September 15, the RBI governor spoke about the risks of the Jan Dhan Yojana at a banking conference. "When
we roll out the scheme, we have to make sure it does not go off the track. The target is universality, not just speed and numbers,"
Rajan said. He added that the scheme would be a waste if it the new accounts are left untouched without any transactions.
Reason: Operation of bank accounts comes at a cost for banks. Yes, the deposits act as cheaper source of funds for banks, but
the interest payments and additional services offered to customers are costly. This has an impact on the overall profitability of
banks. Banks earn money only if an account conducts transactions that can be charged. The RBI worries about accounts that could
be opened for namesake and then left unused. The scheme could also be taken advantage of by those looking to get the freebies
offered by the government.
Risks to banks: This exposes banks to risks. This is especially because banks are easing account opening rules, thus
overlooking the Know Your Customer (KYC) norms. Moreover, the scheme is mainly promoted by public-sector banks, which are
Mostly Economics
This blog covers research work in Economics with focus on India
Richest queue in India (world perhaps) and cronyism at its best..
Does Microcredit work? it depends
Next Jan Dhan Yojana to target Mutual Funds/Equity markets?

I was actually thinking that the Jan Dhan Yojana should have also linked to equity market. Just like the bank account under
the scheme provides insurance and overdraft facility, it could have provided a demat or a mutual fund account as well.
Given the huge surge in equity markets, it could have made some people wealthier (or atleast perceive themselves). The
government could have pumped itself saying we have created so much wealth for the excluded poor.
Apparently, SEBI did think about the idea and actually asked MF industry to replicate the bank account scheme in MF
space.
Last week, U K Sinha, head of the Securities and Exchange Board of India (Sebi), impressed by the success of the Pradhan
Mantri Jan Dhan Yojana, suggested a similar approach to enhance mutual funds reach across citizens. At the inauguration
of Mutual Fund Utility, the single platform for all MF transactions, he said, We should take some lessons from what is
happening around us and try to expand the reach and role of the MF industry. If 13 crore (130 million) Jan Dhan accounts
can be opened in such a short time, obviously the MF industry should give itself a target to reach out to all citizens.
Really?
The industry is divided:
Hardly anyone disagrees, say sceptics, on bringing more investors into MFs ambit. However, when it comes to practicality,
the idea fails to pass the litmus test. For that matter, the majority of Jan Dhan accounts have no balance. MF executives
reject the suggestion. According to them, strict Know Your Customer (KYC) norms, absence of freebies like default
insurance (provided by Jan Dhan Yojana) and unavoidable mis-selling dwarf this approach to expand.
The chief executive officer (CEO) of a mid-sized fund house, said, Expansion for an industry like us cant be forced with an
artificial stimulation. If we follow the Jan Dhan approach, there are huge possibilities of mis-selling. Moreover, how
possible is it to get money in those new accounts? We are here to create wealth for investors and for that, we need at
least some money to start with. He wished not to be named. Another chief executive said: I agree the sector needs to
expand but a Jan Dhan-type approach might cost us heavily. Its a definite No. Will there be any benefits an investor get if
s/he keeps it a zero account folio? Who would bear the cost of KYC verification and other costs attached with
maintenance?
Sectoral experts put the KYC verification charge between Rs 30 and Rs 50. The cost of maintaining the account is
additional. By that calculation, for every 10 million of new folios, costs will be at least Rs 30-60 crore, for a sector
operating on a very thin margin, with a minimum net worth requirement of Rs 50 crore.
Dhirendra Kumar, chief executive of fund tracking firm Value Research, said: Unless the fundamental structure is
revamped, following the Jan Dhan approach does not look practical. KYC norms are very complicated and it appears they
are there to keep investors away. It is causing inconvenience to people to open an MF account. It is for the regulator to
streamline and enable growth for the sector.
An executive said his fund house was working on a proposal to Sebi if it could use Investors Awareness Programme funds
for KYC for new investors and open accounts for them. If people want to invest they can use these folios. Else, they can
use it when they want to, he said.
Others disagree. Technically, the IAP funds should not be used for KYC and opening accounts. This way, when investors
decide to invest money, distributors and AMCs will make money out of it. Ironically, funds used to open such accounts
came from money meant for investors awareness and education, said an executive.
Sundeep Sikka, chairman of Association of Mutual Funds in India (Amfi), said, Industry has to move 100 per cent in that
(Jan Dhan Yojana) direction. If there is support from the government MF should also have the same approach. Industrys
next target should be to reach 10 crore of investors.
All this sounds good when markets are on the way up. In case of crisis, things go really bad as wealth declines across people. It is
trying times when you need money, is when you might not have money.
The real deal is providing people with real things and not these financial ones. If real things are provided, financial ones will follow.
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India's Jan Dhan Yojna Initiative
INDIA
25 August 2014
INDIA'S JAN DHAN YOJNA INITIATIVE

What are the key considerations for obtaining desired outcomes in India's Jan Dhan Yojna
initiative, which is designed to improve access to financial services? Mukul Asher shares his
analysis.
What are the key considerations for obtaining desired outcomes in India's Jan Dhan
Yojna initiative, which is designed to improve access to financial services? Mukul Asher
shares
his
analysis.
On the occasion of the 68th Independence Day, Prime Minister Narendra Modi
announced an initiative, to be formally launched on August 28,2014, to enable those
currently not having access to banking and other financial services to do so and thereby
expand their options to generate better livelihoods and to improve household welfare.
The name of this initiative, Pradhan Mantri Jan Dhan Yojna (PMJDY) was the result of a
competition held through the MyGov platform (http://mygov.nic.in/). This platform is
designed to solicit ideas and substantive material from the public society on variety of
issues. This illustrates that the Prime Minister Modi led government understands the role
of ideas, and sourcing them from as wide a network as possible, are among the most
important drivers of economic growth and contributors to good public policies.
It is hoped that the platform will also be used to provide inputs for a feedback
mechanism for facilitating monitoring and requisite corrective measures as
implementation of the PMJDY progresses.
Rationale:
The main rationale for introducing PMJDY is that according to the 2011 Census, of the
250 million households in the country, only about 145 million, or about three-fifths of
the total had access to basic banking services. Thus, about two-fifths of the households
(105 million) do not have access to banking services, let alone to broader financial
services. This result is in spite of many years of efforts to achieve financial inclusion by
various government and non- government organization over several decades.
There is also substantial scope for improving the quality, affordability, and case of
access to banking (as well as to broader financial services such as credit, insurance, and
pensions).
It should however be stressed that access to banking and to financial services is not an
end in itself, but it is an instrument, which when complemented by other appropriate
policy initiatives, (such as Digital India initiatives) could enable households to obtain
better livelihoods, and quality of living. Access to banking and financial services thus
carries responsibilities by the beneficiary households and other stakeholders to utilize
such access to improve their capabilities, and by government agencies and by service
providers to perform their tasks competently, and with focus on desirable societal
outcomes.
Main Features:
Full details of the PMJDY are yet to be unveiled. The media reports suggest that the
initiative will be operationalized in two phases. The end objective is for each of the 75
million identified families to have two bank accounts, for a total of 150 million new
accounts, each account accompanied by a debit card, by August 2018, just four years
away. Each bank account will have an overdraft facility of INR 5,000/- , and accident
insurance
cover
of
INR
1
Lakh.
A feature connecting the overdraft to a credit bureau to enable low income households
to build credit histories merits serious consideration. This feature could facilitate
graduation by beneficiaries to more mainstream banking and financial services; and
could mitigate information gaps leading to excess borrowing and corresponding higher
credit
risks
by
the
lenders.
There is also a provision for minimum monthly income of INR 5,000/- for business
correspondents who link account holders with the bank. It is however worth noting that
there are still substantial numbers of villages with around 2000 people which lack a
bank branch. The pace of opening branches in small towns and villages has been too
modest to provide the requisite bank facilities to all villages by the year 2018 envisaged
in PMJDY.
Analysis:
The targets set for PMJDY are indeed very ambitious. The PMJDY increases the demand
for banking and related services massively. Indias insurance sector, both life insurance
and non-life insurance components are not in robust health, while life insurance
coverage at less than 10 percent of the population is low. The geographical coverage of
branches of insurance companies also remains limited. The reforms of insurance sector,
including modernizing regulatory structure of this sector, remain high priorities.
The above creates huge gap between the demand and supply of banking and financial
services
included
in
PMJDY.
It is evident that the current structure of the banking and finance sector, its technology
levels, skill-sets and mind-set of the stakeholders in the sector, organizational
capabilities, and regulatory structures are not equipped to attain the ambitious goals of
the PMJDY. The wide demand-supply gap in any area of public policy (such as in Right to
Education, RTE, Act) has the potential to impose high economic, social, and political
costs. A sound practice in any public policy is to keep demand and supply of the
relevant
services
(good
and
assets)
in
reasonable
balance.
As the PMJDY substantially increases the demand for banking and other services, it is
the pace at which greater effectiveness on the supply side can be attained which should
determine the targets of PMJDY. The vision of having two accounts each for 75 million
households must be tempered with the supply side capacities. In this context, reasons
for two (rather than at least one) bank account per household need to be reexamined.
Supply side improvements are needed in the delivery systems through focused but
flexible use of technologies, and through greater efficiencies and effectiveness by the
banking, insurance, and other service provider organizations. Thus, too rigid a design
mandated nationally is unlikely to be conductive to achieving the goals. Local context
and household specific flexibility and innovations need to be encouraged.
The features of PMJDY outlined above suggest that from the societys perspective, two
types of costs will need to be managed. The first type is the initial capital and related
costs of opening the bank account, and costs associated with pricing (costing) of the
insurance
cover
based
on
rigorous
actuarial
projections.
Insurance is about micro-economic pricing in a dynamic context involving long term.
When insurance cover is provided, society must bear the costs of this service. If these
costs are to be borne through governments budgets, given Indias urgent need for fiscal
consolidation and for reorienting government expenditure towards growth and fairness
enhancing expenditure (called fiscal flexibility), estimates of fiscal and of economic
costs to the society need to be estimated rigorously and transparently.
The second type of costs are those costs associated with operating bank accounts,
servicing insurance claims and overdraft facilities, and maintaining records of
beneficiaries to utilize the services. Unless the bank accounts are used, their full
beneficial effects cannot be realized. Therefore transaction costs of access to banking
services
must
be
minimized.
An important avenue for obtaining the PMJDY initiative is to use the data-base
generated and delivery systems constructed for more effectively implementing other
government schemes, such as payments under various pension schemes, energy, food,
fertilizer subsidies, and wage payments under employment schemes such as MGNREGS
(Mahatma Gandhi National Rural Employment Guarantee Scheme) which currently are
inefficiently
delivered.
With accessibility to the banking facilities, direct transfers of the benefits to the relevant
accounts have the potential to reduce transaction costs, and minimize leakages. The
resulting economic savings need to be competently estimated for a more complete
social
cost-benefit
analysis
of
PMJDY.
The above indirect economic benefits however are not automatic. To obtain them,
substantial enhancement of managerial and technical competency, and much better
policy and organizational coherence will be required. Basic literacy levels, including
financial literacy levels, will also need to be enhanced. These attributes, if developed in
a focused and integrated manner, could potentially help generate positive net economic
and
social
benefits,
while
helping
to
expand
fiscal
space.
The above analysis suggests that the considerations which have led to the introduction
of the PMJDY have considerable merits. But achieving its goals will not be either quick or
automatic.
The PMJDY should not be regarded as a standalone initiative but as one of several
integrated initiatives designed to realize progress in financial inclusion to expand
choices and capabilities of the beneficiary households for pursing better livelihoods.
The success of the PMJDY should be measured by the progressive reduction in the
number of households needing the assistance from this initiative after around 2020.
Accountable and transparent organizational structure for implementing PMJDY in an
integrated manner suggested in this column should be regarded as essential for
realizing the desired societal outcomes.
Acknowledgements
Mukul G Asher is Professorial Fellow, National University of Singapore, and Councilor,
Takshashila
Institution.
This article was originally published "The Jan Dhan Yojna: the key considerations in
obtaining desired outcomes" by Pragati: the Indian National Interest Review, on August
24, 2014.
Raipur : Pradhan Mantri Jan-Dhan Yojana will prove to be a milestone : Shri Vishnudev
Sai : Union Minister of State inaugurates the scheme in capital city Raipur
Target of opening minimum two bank accounts of each family
Facility of insurance cover of Rs 1 lakh and overdraft of up to Rs 5000 for account holders
Business correspondents of nationalized banks to be appointed in villages lacking bank facility
Raipur, 28 August 2014
Union Minister of State for Minerals, Steel and Labour Shri Vishnudev Sai today inaugurated the Pradhan Mantri Jan-Dhan Yojana in
a function organized at new circuit house in capital city Raipur. In his address to the function, Minister Sai said that the scheme
announced by Shri Narendra Modi is a beneficial scheme for crores of poor people in the country. Pradhan Mantri Jan-Dhan scheme
will prove to be a milestone of socio-economic development for poor families of the cities and villages, which lack proper banking
facilities. He said that the first phase of this ambitious scheme aims at providing banking facility to each and every family of the
country. Talking about the positive aspects of the scheme, Minister Sai said that this day is a historical day for Chhattisgarh as well
as entire nation. In the inaugural function, Chief Guest Vishnudev Sai symbolically presented new bank accounts to a few
beneficiaries along with heart wishes and greetings.
Chhattisgarh Government's Health, Urban Administration and Commercial Tax Minister Amar Agrawal presided over the function.
Member of Rajya Sabha Dr Bhushan Lal Jangade and Raipur Jila Panchayat President Lakshmi Verma marked their presence as
the
special
guests
of
the
occasion.
State
Government's
Chief
Secretary
Vivek
Dhand
delivered
the
welcome speech and threw light upon the important aspects of this new scheme. The function was organized by State Government's Fi
ance Department, Directorate of Institutional Finance and State-level Bankers Committee. Union Minister of State Vishnudev S
i said in his address that despite being a new state, Chhattisgarh has made many achievements in various fields of development within just 1
years of its formation. But it is important to ensure availability of bank facilities in each and every village of the state. Pr
dhan Mantri Jan-Dhan Yojana will prove immensely beneficial in this direction. Shri Sai said that under this scheme, insurance cover
f Rs 1 lakh will be provided to each account holder and if the account is regularly operated for six months, overdraft of upto Rs
000 will be provided. Minister Sai said that amount of grants under various government schemes will be directly transferred to the
account holders. He said that there are nearly 6 lakh villages in India. Prime Minister Shri Narendra Modi has set the goal of e
tablishing one bank outlet between each 1000-1500 houses so that people may avail immediate banking facilities. Union Minister said
hat Jan-Dhan Scheme is extremely important in terms of financial inclusion. He said that financial inclusion is the process of
roviding sufficient amount of loans and timely financial services to the deprived, helpless and economically weaker section of so
iety.
Under
Pradhan
Mantri
Jan-Dhan
Yojana,
such
fam
While presiding over the programme, State's Commercial Tax Minister Amar Agrawal said that Shri Narendra Modi is the first Prime
Minister of the country to have this vision of bank account facility for each and every family in India. And today, this vision has begun
to take the shape of reality. Minister Amar Agrawal said that about 20 per cent of the country's population has no access to banking
facilities. In such a scenario, Pradhan Mantri Jan-Dhan Scheme will turn out to be a catalyst for economic progress of such families
in the country. Chief Secretary Vivek Dhand said in his welcome address that Pradhan Mantri Jan-Dhan Yojana will contribute in
expansion of banking facilities to each and every village of the state as well as the country as a whole.
Chief Secretary Dhand also informed that Chhattisgarh has nearly 20,000 villages but the number of branches of banks is nearly
about 1109. It is required to provide banking facility in nearly four thousand villages of the state, as people here have to travel 10-15
kms for even the simplest work like withdrawal of money. Pradhan Mantri Jan-Dhan Yojana will prove largely beneficial in making
banking services accessible to such villages through financial inclusion. Chief Secretary Dhand said that due to lack of proper
banking services in rural areas, people often chose to deposit their savings in chit-fund companies but most of such chit-fund
companies turn out to be fraud. Pradhan Mantri Jan-Dhan Yojana will connect needy families of rural and urban areas to
government banking facility and will provide them financial security. He told that under this scheme, nationalized banks will appoint
their business correspondents in the places lacking proper banking facility. The bank may select an individual, a social welfare
organization or a self-help group etc of that particular place as business correspondent. Under the scheme, beneficiary accountholders will be issued ru-pay debit cards.
Chief Secretary told that in Chhattisgarh, Rs 1500-1600 crores are distributed to nearly 26 lakh labourer families as wages under
MNREGA. Moreover, more than 12 lakh beneficiaries of the state are provided monthly pension under Social Security Pension
Schemes. Scholarships are distributed to lakhs of students in the state. On the occasion, senior officials of various banks, public
representatives and prominent citizens were present. Vote of thanks was proposed by Chief Managing Director of State Bank of
India (SBI) Ritendra Ghosh.
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Is the PMs Jan Dhan Yojana a fight against poverty?

Topics > GD > Latest Group Discussion topics - GD topics with answers > Is the PMs Jan Dhan Yojana a fight against
poverty? > Post your comment

Deepa Kaushik 08-31-2014 02:29 AM
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General topics for group discussion - GD Topics
A fool can ask more questions in an hour than a wise

Introduction
man can
answer
seven
years
- Group
discussion.
Prime Minister Narendra Modi has launched one of the biggest Financial Inclusion Programmes
called
the in
Jan
Dhan
Yojana
on 28th
Aug14 calling this to be an end to the Financial Untouchability. The plan aims at connecting every Indian with the financial system
Accidents -the
citizens
to take more
which indirectly joins him to the economic mainstream. In his style of extempore speech, Road
Modi compared
worksneed
of Mahatma
than
Ghandhi towards the social untouchability to the currently launched plan against financialresponsibility
untouchability.
He the
hasgovernment.
emphasized this
plan to be a step to fight against poverty. Modi has initiated the spark and this need to catch fire to get implemented in its complete
extent and provide the desired result. Though the plan is to connect every person with theEducation
bank account,
is that
any means
industry
is a by
business
thesehelpful
days.
in fighting the poverty prevailing on a grand scale in our country? Is the PMs Jan Dhan Yojana an actual fight against poverty?
Yes
Cash transfer or Subsidy : Which is better?
Budget 2015 - Beginning of Acche Din?

- The plan aims at connecting every household, be it in urban or rural sector and wrap them with the financial cover. This is definitely
a step to encourage every citizen to start thinking wisely and plan the finances for the future. A properly planned future w.r.t. the
Should students be given extra time to read the
finances would be a big step towards eradicating poverty.
question paper?
- The programme provides many benefits viz. life cover of Rs. 30,000, RuPay debit card, with an in-built accident insurance cover of
Is Technology
Obsession
A Disorder?
Rs 1 lakh and an overdraft facility of Rs. 5,000, subject to satisfactory operations of the account
for at least
six months.
These could
be hardly dreamt by any poor in the country.
Should cuss words be banned?
- For the debit card, a fee of 50 paisa will be charged per transaction, which is very nominal and affordable even by those under the
lower socio-economic strata.
Yuvraj Should Have Been A Part Of World Cup Team.
- The insurance cover is free for the account holders which imply that the poor class can have
cover
and
secure
Ethicsthe
or insurance
Logic- Which
one
would
youthe
go with?
future of their family members and kids.
Clean India - Attitude change is more important than
- This mega financial inclusion programme is a way to teach the financial discipline to all sections of the society. The economic status
the movement
of the country will have a sound hand with the rise of the poor sections and their joining hands in the financial loops to share the
economic burden.
Is All The Fuss Over A PMs Suit Justified?
No
Will Swachh Bharat Campaign Succeed?
- Planning the future and opening a bank account is upto the earnings and expense in the family. These things vary from family to
family and we cannot impose the requirement of the bank account to every person.
- A person needs to be literate enough to manage the bank account. Opening an account for an illiterate may lead to some unfair play
with the savings of the concerned person. Instead of fighting poverty, this might make the poor person bankrupt without the
knowledge of the happenings.
- Government has induced many additional benefits to the opening of the bank account. The government is planning to reimburse
banks for these. The amount spent on such plans is nothing but the taxes levied from the common man. This is highly unfair and misguiding to spend the hard-earned money of the common man to provide the unwanted lucrative offers.
- The life cover of Rs.30,000 is just for the bank accounts opened by January 26. The poverty cant have a deadline. With the limited
time offer, the administrators have clearly emphasized their intention of attracting their potential customers, and this is no fight
against poverty.
- The life cover to the account holder may result in some fatal crimes. People already dying hard in their poverty might dare to lose
their life to provide the amount of life cover to protect their family. Conversely, there could be incidences where the family members
might kill the account holder in lure for money.
Conclusion
Every new approach finds some hard rocks to show its determination and attitude towards the success path. This plan might be
accompanied by some risk factors, but we need to dare to fight against the evil cause. Poverty is like a termite, and very correctly
stated, it is the root cause of financial untouchability. We need such plans to include the poor class into the financial stream and
guide them regarding the benefits for the same. Handling a bank account and the insurance cover doesnt demand the person to be
educated, it just requires the basic knowledge which could be explained by the bank officials or anybody else. Again, if the funds the
government is utilizing is the one from the taxes, then it is really wise to create the balance in the economic status. A bold step in
indeed required to withstand the heat of economic downsurge and fight poverty, and the Jan Dhan Yojana is definitely a good fighting
mechanism to check the poverty.
RE: Is the PMs Jan Dhan Yojana a fight against poverty?
Ram Bahadur Thakur 08-31-2014 07:10 AM

ofcourse, linking each and every section of people with this yojana will enable people to transact in a fair way.
They can easily apply for government loans and subsidies. The insurance cover given to deceased family in case of any accidental
death is yet another cause for its validness. It will also help in connecting people with technology and removal of middlemen and
informal loan lenders from the market which will surely lead to the financial untouchability to all citizens of Bharat

deepak kumar 08-31-2014 03:29 PM
as we know that now a days some people suffering form some think or the other like that in future for getting higher education and
suddenly accident cases so we can say that we can take benefit form JAN DHAN YOJANA.

Vishal Vishwanathan 08-31-2014 05:11 PM
Yes, I think PMs Jan Dhan Yojana is having both positive and negative side like every thing. The first thing which we need to
understand is that whether the government is having fund for this, if they are implementing this from a borrowed fund it will add up to
the liability of the country. Later they may be forced to stop it. On the positive side it will be an easy way for people to receive
government grants which they deserve, It will help them to increase their savings and keep something for the future. Along with this
there are people who are involved in this,i.e the government officials who implement this for the people. This people should be
committed and should ensure that the system is free from corruption or else this will be a major source of money making for a few
corrupted government officials. The system implemented should be capable of overcoming all this hassles.

Teena Bhatia 09-1-2014 12:54 PM
Before we discuss the Jan Dhan Yojana in light of poverty issue, it is important to understand what the Jan Dhan Yojana is all about?
The new scheme offers the flexibility to the masses of opening a bank account with all the latest facilities and the additional
advantages like insurance cover, overdraft facility and others. The new scheme is said to be an innovative step to achieve financial
freedom. IS it really so?
Jan Dhan Yojana is an unnecessary expense on the finances of nation. How can the scheme be a way to financial freedom? PM
Narendra Modi in his speech said that common masses own mobile phones but dont have the bank accounts. How are the two
different aspects related? Mobile phones are the necessity of people whereas the bank account can be opened only when there is
money and a need to deposit money. Until and unless, people dont have proper job, proper source of earnings, financial stability,
how will a bank account change the miserable condition. It is really hilarious to say that Jan Dhan Yojana is a fight against poverty.
The only visible benefit as of now is the insurance cover which will also face a lot more implications while actual implementation.
Therefore, MPs Jan Dhan Yojana is in no way connected to the fight against poverty.

deep chandra pathak 09-1-2014 01:15 PM
jan dhan yojna is an ambitious programme of modi ji but i think not thoroughly well planned & not an ultimate solution for rooting out
poverty.
jan dhan yojna boast of providing over draft facility of Rs 5000 after satisfactory running of accounts for six months. is this mere
amount of rs 5000 in the form of liabilty and interest levied on them will not result in increasing tension of repaying it by the
beneficiaries of this particular scheme?...anybdy whose situation is so worse that he is forced to take this OD would hav the
capability of repaying it?, it is going to increase NPA"s further which is already a point of big concern for our financial thinkers,,!!..any
poverty stricken youth would be able to set up his own business with this mere amount?...what is the ultimate outcome of this
OD?..this jan dhan sceme has been able to add vigour n curosity among disadvantaged people but is not the ultimate solution for
rooting out poverty
Gaurav 09-2-2014 02:35 AM

Definitely yes ,the JAN DHAN YOGNA by Mr. Modi is a step ahead towards a better and secure India where every citizen can take a
tensionless breathe and have a relief that their family is secured and by the government with an unbelievable cover of Rs.100000
which is a dream for a poor , cherry over the top is that this account will make them a better invester for their future in the form of
artful thinker for the money that they have with them.
Rest all ca be covered with a Idiom "Money makes Money".

Priya 09-3-2014 02:03 PM
Jan Dhan Yojana is a financial inclusion program mes whose sole aim is to provide banking facilities to people especially poor who
doesnt have any accounts in banks.It can help in eradicating poverty by directy providing cash transfer benefits in the beneficiaries
account which was not possible earlier due to corruption prevailed at each stage of transfer of money.In the way of eradicating povert
it will also to the some extent reduce corruption.

nisha singh 09-3-2014 04:08 PM
By the launch of jan dhan yojna by our prime minister ,Mr. Modi has tried to eradicate poverty by using d tool of financial inclusion. In
my view..modi govt shud provide and pay more focus towards providing n creating jobs in d country so that ppl hv sufficient balance
to deposit money in banks.poor ppl who do not hv excess to food n sources of income how would they b able to deposit money even
when they hv acount in bank .

akash singh 09-5-2014 07:21 AM
jan dhan yojna : i appreciate to govt to launch a new scheme for poor people , but post independence many poverty allievation
scheme came but what happen this scheme every one know ....for starts a good scheme its a good idea but they have to reform
because most of the needy people don,t know about these kinds of scheme... the govt should tranparency and regular communicate
with poor peolple about these scheme they can do via NGO service local news paper or radio channel and village sarpanch can also
give these kinds of information . Because start a any new program is not a very big deal but implementation is a very big deal . for jan
dhan yojna definately help to pooor people they understand about bank's procedure or they became more educated....

simran 09-6-2014 03:28 AM
i thnk narendra modi's shiuld try to impriv the condition fr d jod.in india's there is lack of job.if theyvdont hav any job what they should
dopsit in their bank acount.now a days increasing unemployment people hav not money to fullfill their need so wat they deposit un
their bank acount.i think jan dhan yojna is not a fight against poverty.
if modi g want to remov poverty they should try to remove unemployment.

akanksha singh 09-7-2014 11:43 AM
i think it is a welcome step toward financial inclusion. people will feel a type of financial security as life insurance and accidental
covers are there in this programme and hving bank account will prompt him to save more n that is good for economy. this project
along with skill development programme if implemented effectively can be a milestone against poverty. but gov must ensure these
programmes free from corrupt practices.
Mukteshwar 09-7-2014 02:17 PM

According to me this new scheme of PM Narendra Modi has more disadvantages than the benifits . As it is said that the account that
are being provided to the poor person contains the implicit life insurance cover , i think when the poor person don't have any way to
earn the food for his/her family he will try to commit suicide for this insurance cover in the way to proof it as an accident so that
his/her family can get that money for the survival . No one knows in how many days they will get that amount or whether his/her
family will get that or not it is not sure .
according to me PM should utilize this amount for creating new jobs,for creating new vacancies in the existing department for such
kind of poor people who are not literate, this money should be used so as to make people eligible to earn money , bank account will
come into picture when they wil have money to deposit . Today scenario is such that poor families is not having money to buy food for
them for one time how can they save money .

Mukteshwar 09-7-2014 02:37 PM
There are many other schemes running for the poor people but not a single person came up and said that yes this scheme helped
me to survive in poverty . The main cause why all these schemes are not working is because of the disloyal behaviour of the
employees that are involved in the various schemes meant for the poor people . According to me scheme should be made such that
if the related employee is not loyal then also it should not have any impact on the poor people instead it will come as profit to the poor
people .
A/c to me there should be a direct number to PM's office regarding any corruptions for everyone and this has to be ensured that
necessary actions will be taken on the complaints within 48 hours, this will implicitly increase the vacancies for the literate persons ,
and on the other side it will help the scheme to have a positive impact on the poor families as well .
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JAN DHAN YOJANA PROBLEMS AND FLAWS IN IMPLEMENTATION

Economics 04 September 2014
Narendra Modi has started ambitious Jan Dhan Yojana to bring crores of poor in financial mainstream. Although the goal is praiseworthy, but there are
realistic problems in the way.
Prime Minister Narendra Modis Pradhan Mantri Jan Dhan Yojana has been started with much fanfare. It is an ambitious project to add lower strata of
the country in financial mainstream. This can also provide direct help to beneficiaries from various government schemes. It is still doubtful if these will
actually increase income of poor. Modi says that farmers are committing suicide because moneylenders give loan to them at very high interest rates,
but taking loans from banks also does not change their condition much. Getting loan from local bank is much more troublesome.
Here are some of the features of the scheme. Main aim is to eradicate financial untouchability by opening bank accounts for poor. Right now, 42 per
cent of the population of the country is out of banking system. The under the scheme more than 7.5 crore new bank accounts will be opened by
26th January 2015. It also aims to provide accidental insurance, life insurance and loan facilities. Two-third of the accounts will be opened in rural areas.
There is no minimum balance requirement.
This is a huge task and many bankers feel that it can drain huge resources of already strained industry. According to estimates, banks would have to
spend around Rs. 18,000-20,000 crore on Jan Dhan Yojana. It could be an investment for long term benefits. India spends Rs. 3-4 lakh crore per year
on all subsidies combined. If in the end, even if 10 per cent money could be saved then it will cover entire cost of the operation. As communicated by
the government, each account will have Rs. 5,000 overdraft facility, therefore total exposure would be Rs. 37,500 crore. Assuming 25 per cent risk, we
are talking about Rs. 7,000 crore potential loss for the banking industry.
Some of the finer points of the scheme does not look that good. The insurance cover is linked to the transaction history of the accountholder. RBI
promoted NPCI will bear the insurance cost, not the government, from the income generated from the transactions on the RuPay platform. For every
ATM transaction, the bank will pay NPCI 40 paise. For every sales transaction, NPCI will get 60 paise. Most probably, although the volume of accounts
will increase for banks, but not same can be said about number of transactions.
Last mile connectivity is still a big question mark. According to the plan, this will be taken care by banking correspondents. These agents will go to each
and every village, thus banks will not have to open branches in remote areas. But they are paid as per the commission on the transactions. So until and
unless government plans to include fertilizer, food and kerosene subsidy in it, generating enough commission would be tough task.
Right now, there are two lakh agents working with different banks, but to roll out the entire plan as envisaged would require another five lakh agents to
be recruited. The concept of agents has not worked as efficiently as planned. Therefore recruiting more agents raises questions. However, if new
accounts have to remain active not dormant, then only solution is to increase number of banking correspondents.
When British introduced railway line in India in 19 th century, it was basically used to procure raw materials like wood, cotton, indigo, coal etc from India
and ship that to English for further use. Now banks in rural areas are doing same. They are transferring the money deposited to Mumbai. Around 85 per
cent of the money deposited in rural branches is sent to Mumbai for loans in urban areas. It would be better if same money is used in those areas
rather than funding for houses or industries in urban areas.
There are two aspects of financial inclusive growth, bank account and access to loan. Jan Dhan Yojana is currently addressing first issue. However
second problem still persists. The current banking system is equipped to disburse loans of lakhs and crores of rupees, not of thousands. The
cooperative institutions which are equipped for such loans are acutely corrupt. Therefore for perfect financial inclusion, the entire banking system has
to undergo overhaul.
Home > knowledge-center > NewsletterStory > Is the Indian banking sector exposed to a systemic risk?
September 05, 2014
In this issue
Is the Indian banking sector exposed to a systemic risk?
Will municipal bonds be able to garner a good response in India?
Are stock markets giving a false hope of global recovery?
India's GDP grows at 5.7% in June quarter. Is it the beginning of a new high-growth phase?
And Other News...
Financial Terms. Simplified.
Weekly Facts
Close
Change
%Change
BSE Sensex*
27,026.70
388.59
1.46%
Re/US$
60.37
0.08
0.13%
Gold Rs/10g
27,580.00
-420
-1.50%
Crude ($/barrel)
101.30
0.62
0.62%
FD Rates (1-Yr)
8.00% - 9.00%
Weekly change as on September 04, 2014

*BSE Sensex as on September 05, 2014
Is the Indian banking sector exposed to a systemic risk?
Impact
The data of the Capital Adequacy Ratio (CAR) released by the Reserve Bank of India (RBI) is depicting a rather worrisome picture
of the Indian banking sector. As of the fiscal year 2014, CAR of Indian banks has dwindled to 13.0% from 13.9% in the previous
fiscal. After the reverberations of the U.S. subprime mortgage crisis on the Indian economy, there was some improvement in CAR
for couple of years (i.e. until fiscal year 2010), but since then CAR of Indian banks has been on a decline.
You see, the public sector banks are worst hit. Their average CAR has fallen to 11.2% as of fiscal year 2014 and in the present
fiscal year as well for the quarter ended June 2014 it has fallen further to 10.7%.
So what is the reason behind this?
Well, over the last few years quality of assets of banks in India has come under tremendous pressure by the way of rise in NonPerforming Assets (NPAs). And public sector banks have suffered more than their private sector counter parts. You see, the
gross NPAs of public sector bank have increased to 4.1% of the end of March 2014 from 3.6% a year ago. Their net NPAs (as a
proportion of their net advances) too have mounted to 2.2% compared to 1.7% during the same period a year ago.
It appears that rising NPAs has become a structural problem of banks - more so with the public sector ones.
The reason for the poor performance of public sector banks, as even cited by RBI is, reckless lending to corporates.
Moreover, harmful virus of frauds has gripped the Indian banking sector; wherein there have been instances of misappropriation of
funds, syphoning of deposits to cook accounts and corruption at branch level while sanctioning loans (seemingly done in privy with
those at the top). Lack of effective internal control system and even political influence has caused leakages in the risk
management process leading to frauds and deterioration in quality of assets of banks. Also dual accountability of public sector
banks (where they are regulated by RBI as well as the finance ministry) has majorly affected the governance of PSU banks
The remedy...
It is noteworthy that a bank can have a robust CAR only when it follows prudent lending practices through a vigilant due diligence
process. The Government should take cognisance of this, because such issues pose a long-term systemic risk to the Indian
banking sector. You see, the public sector banks account for nearly 70% of total banking activity in the country and their
performance can affect the economy as a whole. Therefore, measures to improve corporate governance at banks should be
taken.
The PJ Nayak Committee appointed by RBI to review governance of banks in India, submitted a report in May 2014 which has
recommended that it would be desirable to separate the position of Chairman & Managing Director (CMD) into two. This is
because until then there is a very real possibility of the several chairmen positions across banks being filled on the basis of
political allegiance rather than professional skills, which could imperil banks.
PersonalFN is of the view that it is imperative for the finance ministry to also ensure that frauds do not mushroom and they
enunciate effective corporate governance guidelines for public sector banks.
Take heed...
Going forward public sector banks will require additional capital to comply with the Basel-III norms. According to Government
estimates, state-run banks would require Rs 2.4 lakh crore of equity capital by 2018 to meet these norms (which are in effect in a
phased manner since April 1, 2013 and which will fully be implemented by March 2019.) Besides, the Government is yet to
allocate fresh funds to public sector banks through capital infusion. It is noteworthy that the erstwhile finance minister, Mr P.
Chidambaram of the UPA II Government had in the interim budget allocated Rs 11,200 crore for capital infusion...and state-run
banks were expecting the present finance minister, Mr Arun Jaitley of the Modi-led-NDA Government to announce additional
capital infusion in the Union Budget 2014-15.
These banks are now planning to raise money through Qualified Institutional Placements / Follow-on Public Offers (FPOs), in
which case PersonalFN is of the view that investors should be wary of such banks financial health before investing their hard
earned money. While there is exuberance in the market as the S&P BSE Sensex has scaled over 27,000 mark and Q1FY15 GDP
growth has reported an uptick, it may not be possible for all banks to raise capital effortlessly despite upbeat market sentiments.
Do you think the Government should recapitalise public sectors banks using taxpayers' money? Share your views
Will municipal bonds be able to garner a good response in India?

Impact
Municipal bonds (also known as muni bonds) are a popular issued by local Governments globally. The market for the same
globally is estimated to be about U.S. $3.5 trillion.
In India, the first municipal bonds were issued in 1995, while the state-guaranteed bonds were launched by the Bangalore
Municipal Corporation in 1997. While a number of municipal corporations (such as Ahmedabad, Ludhiana, Nasik, Nagpur, Indore,
Madurai and Visakhapatnam) did issue muni bonds until 2005, there has been a sharp fall in the issuances since then and
practically no issues after 2010.
You see, the hurdles by them faced are...
Low ratings;
Reluctant investors;
Municipalities in metros and other large cities resisting to turn to the debt market (as they have sufficient cash); and
Unclear regulation
But now the Securities and Exchange Board of India (SEBI) is planning to float a discussion paper on the issuance and trading of
municipal bonds. And to ensure that this is viable, the regulator is also in talks with the finance ministry to ease the norms on
pricing of such bonds. SEBI has sought the cap on the coupon rate on such bonds be relaxed if these are issued under the 'taxfree' category. It is noteworthy that according to the tax rules a tax-free debt instrument has to be priced at a minimum stipulated
discount to similar-tenured Government securities. Earlier the Association Chambers of Commerce and Industry (ACCI) had also
written to RBI to facilitate municipal bonds to be traded.
PersonalFN is of the view that municipal corporations of tier III and IV cities which in need of capital depend on Housing and
Urban Development Corporation (HUDCO) for funding, will largely benefit if SEBI discussion paper fructifies effectively as they will
have access to the debt markets. This in turn may also local Governments to develop decent infrastructure in the form of roads,
sewage systems, schools and hospitals. Moreover, if a tax-free status is provided for such bonds it may make it a tax-efficient
investment avenue under debt as an asset class. However, in a rising interest rate scenario the capped coupon of such bonds
may deter investors from putting their hard earned money in municipal bonds.
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Are stock markets giving a false hope of global recovery?

Impact
Risk appetite is high across the globe; markets are in a bit brazen mood. Investors are chasing stocks. Emerging markets are
shining again. Speaking about India, markets are hitting highs quite regularly these days. You may be enjoying the up move if you
have invested money in stocks or equity mutual funds; or you might be repenting for not having invested money when markets
were really down. Equity markets in developed countries such as the United States, Germany, France and Japan have not only
recovered from the lows of 2008 but are now near their 5-year high levels. Except for Russia, investors are still very optimistic
about other emerging markets. Well, everything looks a lot encouraging, but what has much really changed on ground?
State of global economy
Markets across geographies have been rising on the hope that, growth will come back. However, the ground reality is, engine
of global growth seems to have lost the steam. Despite of spending billions on stimulus packages what the developed world has
achieved is minuscule. The recently released economic data, not only in just one region but across geographies may not appear
encouraging, yet markets are bullish.
To check the ground realities of the global economy and read PersonalFN's view please click here.
India's GDP grows at 5.7% in June quarter. Is it the beginning of a new high-growth phase?
Impact
Investors have high expectations from the Indian economy under the Modi-led-NDA regime and are betting big on India. Both
equity and debt markets have been hoping better days ahead. While it may take a little longer before Indian economy passes the
litmus test of strong recovery, some green shoots are instilling confidence.
After languishing a for quite a long, in the April-June quarter of the fiscal year (Q1FY15) India's Gross Domestic Product (GDP)
witnessed a growth of 5.7% - the fastest rate recorded over last 9 quarters and depicted signs of breaking shackles.
Is Indian economy on a take-off?
(Source: CSO, PersonalFN Research)
You see, in Q1FY14 (i.e. over April-June quarter of last fiscal year), the Indian economy grew at 4.7% and for the entire fiscal year
2014 economic growth on average basis came near that level. Thus against this backdrop, Q1FY15 GDP growth rate of 5.7%
looks encouraging.
To read more about this news and PersonalFN's views on it, please click here.
And Other News...
The Modi-led-NDA Government last week rolled out its ambitious financial inclusion programme, the Pradhan Mantri
Jan Dhan Yojana (PMJDY) which turned to be blockbuster on the very first day. More than 1.5 crore accounts were
opened exceeding the day one target of 1 crore accounts and touched 2.5 crore accounts in subsequent few days.
So what does PMDJY offer?
Two bank accounts each to poor families (including one to a woman family member);
An overdraft facility of Rs 5,000 (based on the economic activity and subject to review of the account in the
next six months since account opening);
Ru-pay enabled debit card
Accident insurance cover of Rs 1 lakh; and
Life insurance cover of Rs 30,000
The programme is aimed at improving the lives of millions by bringing them into the financial mainstream and possibly even
freeing them from unreasonable moneylenders.
"In order to eradicate poverty we have to get rid of financial untouchability," Prime Minister Mr Narendra Modi said, adding that
inclusion will also act as an important tool in the fight against corruption. He also said the programme would break the vicious
cycle of poverty and debt and boost the economy, which slowed to decade lows in the past two years.
Mr Aditya Gupta, Chief Operating Officer (COO) of TranServ, a leading prepaid payments solutions manager that focuses on
exploring the potential use of prepaid cards towards achieving Financial Inclusion; also shares a similar view by saying "The
Pradhan Mantri Jan Dhan Yojana is a giant leap forward for an economy like ours, given that it will not only provide banking &
insurance coverage to around 75 million identified households, but should also boost the GDP significantly as the programme will
lead to reduced leakages, better tax collection and improved savings." He is also of view that nationwide, integrated access to
sophisticated financial products like banking facilities, account opening, availability of credit, micro insurance and pension
alongside the proposed direct transfer of benefits will only heighten the need for the use of innovative technologies within the
system.
PersonalFN is of the view that while it is a good initiative, the Government should ensure that misuse of such programme is
prevented and the account opening should undergo proper KYC screening although the Government is buoyed by the response
thus far. Moreover, it is imperative that accounts opened under PMJDY are active in operations (in terms of number of transaction)
for the benefits to transpire meaningfully.
Financial Terms. Simplified.
Capital Adequacy Ratio: A measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit
exposures. This ratio is used to protect depositors and promote the stability and efficiency of financial systems around the world.
(Source: Investopedia)
Quote : "The basic story remains simple and never-ending. Stocks aren't lottery tickets. There's a company attached to every
share." - Peter Lynch
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PMs Jan Dhan Yojana: The Connectivity Challenge

Banks need to switch to WAN Optimization Controllers that support tunneling protocol capable of
accelerating remote application delivery, says Shibu Paul, Regional Sales Director, India, ME &SA, Array
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Prime Minister Narendra Modis Jan Dhan Yojana aims to connect over seven crore people across the country and provide
them with bank accounts. According to data given by the Ministry of Finance, a record 1.5 crore bank accounts were opened on
day one of the launch of this scheme. Statistics show that about 68 per cent of the countrys population lives in rural areas,
which need to be connected through inclusive banking. While this means huge business potential for the banking sector, it also
throws up connectivity-related challenges that need to be addressed. Lack of physical and digital connectivity is posing a major
hurdle in achieving financial inclusion for rural India.
The technological issues affecting banks range from poor connectivity, networking and bandwidth problems to managing costs
of maintaining the infrastructure. To meet the increasing demands for banking services, banks often depend on passive optical
network connectivity, for which they end up paying high costs to internet service providers. These connections also require the
account holders to be present geographically closer to the central source of data. The capital costs for these connections could
be huge, especially in geographically diverse rural terrains.
Are Banks Infrastructure Ready?

The simple answer is no. Compromising on costs and paying huge amounts of money to internet service providers is not an
ideal solution. Moreover these connections are not very reliable and usually fall short in terms of bandwidth. An alternate option
could be to connect rural bank branches through satellite links. Very Small Aperture Terminal (VSAT) satellite networks can be
used in places where leased lines are not available. However, satellite systems add significant latency when used for two-way
data communication i.e., 540 ms to 800ms in a typical environment. Moreover, it is almost impossible to access e-banking
applications and services. Banking through WAN or internet link of lower bandwidth at remote locations frequently suffers with
VOIP/Video delays, slow browsing, slow file transfer, slow upload and download, failing to meet the demands of account
holders. Banks running on lower bandwidth cannot achieve high application response time. Overall productivity and user
experience is also not satisfactory.
Need For WAN Optimization

Banks need to switch to WAN Optimization Controllers that support tunneling protocol/storage protocol capable of accelerating
remote application delivery, thereby speeding up the delivery of banking services. This would also reduce the bandwidth usage
up to 98 per cent. WAN optimization controllers speed up data transfers and reduce application response time over wide area
networks by reducing the amount of traffic transmitted between remote offices and between remote locations. This helps banks
increase application response time significantly.
Adding Intelligence To The Network

Application aware intelligent networking has worked exceptionally well for the banking sector by improving application response
for some private banks that once used VSAT links. As banks store huge amount of customer data, the WAN optimization
controller solutions utilize protocol optimization to reduce the amount of data moved over the VSAT satellite link, dramatically
improving the end-user experience for banking applications and reducing overall bandwidth costs.
Todays banks are implementing consolidation initiatives that centralize application infrastructure and provide distributed access
across the banking sector using public and private networks. While generating significant efficiencies in managing application
infrastructure, this approach creates a tremendous need for moving data over wide area networks, which in turn causes
performance issues that result in the need to buy more bandwidth. WAN optimization controllers can provide banks with the
flexibility to choose the right solution for remote environment and the ability to leverage existing virtualization infrastructure to
greatly reduce TCO for delivering applications.
Digital connectivity is the basic requirement for achieving financial inclusion. Intelligent networking will not only ensure success
for PM Modis Jan Dhan Yojana, but will also enable public and private banks to provide high value financial services to their
customers.
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Published: MONDAY, JANUARY 26, 2015
Tap investment for socio-economic growth: Governor
Thiruvananthapuram: Joining the nation in celebrating the 66th Republic Day, Kerala Governor Justice P Sathasivam on Monday
asked the state government to come out with innovative models of development to utilise the inflow of investment and funds for
socio-economic growth.
'Government has approved a detailed scheme for resource mobilisation to the tune of Rs 25,000 crore to meet investment
requirements for basic infrastructure development and funding projects,' he said in his address after unfurling the national flag and
inspecting the ceremonial parade at the Central Stadium here.
'Bank deposits by Non-Resident Keralites are set to reach enormous proportion, following higher remittance in recent days.
Innovative models of development may be designed to leverage this inflow of funds, to the socio-economic growth of the state,' he
said.
He, however, emphasised the importance of securing 'green nod' from authorities concerned before embarking on mining and
quarrying operantions.
'Kerala has a lot of ecologically fragile areas. We should take maximum care to secure the green nod from concerned authorities
before embarking on mining and quarrying operations. Issuance of new permits should be done only after obtaining clearance from
the concerned statutory authorities,' he said.
Transparency should be ensured in all governmental activities, he said, adding 'those at the helm of affairs should be both credible
and accountable in whatever they do and say.'
The Governor also lavished praises on Prime Minister Narendra Modi.
'The Prime Minister has upheld the vision of a transformed India where the government becomes an enabler of growth with such
initiatives as Swachh Bharat Mission, Jan Dhan Yojana, Make in India and Digital India which are at once far-sighted and resultoriented,' he said.
Besides contingents of armed forces, Border Security Force, Central Reserve Police, Railway Protection Force, Special Armed
Force and India Reserve Battalion, cadets of NCC, student police cadet and Bharat scouts and Guides and mounted police also
took part in the parade.
Chief Minister Oommen Chandy and senior civil and police personnel were present.
Republic Day celebrations were also held in district headquarters across the state.
In Kochi, Acting Chief Justice of Kerala High Court, Justice Ashok Bhushan unfurled the national flag and delivered the Republic
Day message.
Southern Naval Command celebrated the Republic Day with a parade reviewed by Vice Admiral S P S Cheema, Flag Officer
Commanding in Chief, Southern Naval Command. He also paid tributes at the War Memorial.
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Empowering poor vide PM Jan Dhan Yojna

Posted on September 12, 2014 by Uttam Gupta
In India, tens of thousands of farmers commit suicide every year. An overarching cause in majority of the cases is they are heavily indebted and inability to pay
back to money lender forces them to the extreme step as they cant bear consequential torture and exploitation.
The agony is palpating in instances whereby even a small loan taken by farmer or a landless laborer from money lender gets transformed in to mountain of
debt as interest charged by latter is exorbitant 4-5 times higher than what the banks charge.
At another level, consider a woman at home who struggles hard to keep her earnings safe even as her die-hard alcoholic husband looks for every possible
opportunity to pounce. Eventually, the cash gets frittered in giving vent to dastardly habits of latter.
Think of the only earning person of a poor family a factory worker or landless worker on field who dies in an accident. In the absence of financial security,
the dependent members are forced in to persistent misery for their entire life span.
Those who are a shade better-off and in a position to save some amount after meeting their expenses have no avenue available to invest for a reasonable
return. They are neither able to contribute nor benefit from economic activities.
Government extends financial support to vulnerable sections through a host of welfare schemes and subsidies. Under existing arrangements, a lot of this
money gets pilfered. The beneficiaries also face lot of hassles and even harassment at the hands of officials in getting their entitlement released.
The financial miseries of a vast majority of people can be traced to absence of banking facilities in large parts of India. Nearly 40% of population or 500 million
do not have a bank account. More than 6 decades since independence, they continue to be condemned to financial exclusion.
Speaking from the ramparts of historic Red Fort on Independence Day August 15, prime minister, Modi lamented we may have got rid of social untouchability,
but a vast majority of people of India continue to be afflicted by evil of what he termed as financial untouchability.
To make a dent on this pernicious problem, he announced Pradhan Mantri Jan Dhan Yojana (PMJDY) and in less than a fortnight thereafter launched it on
August 28. PMJDY is a mammoth nation-wide financial inclusion project that seeks to bring every household in India within the ambit of the banking system.
Under it, 75 million families will open an account each with zero balance and get a RuPay debit card. It will come with an overdraft facility of Rs 5000/- and
an accident insurance cover of Rs 100,000/- . Persons opening account before January, 2015 will also get life cover for Rs 30,000/-. In second phase, number of
accounts will be increased to 150 million.
On the day of launch itself, 15 million accounts were opened. By September 8, this figure had already doubled to 30 million thereby demonstrating huge
success of the scheme. Banks are pretty confident that the 75 million target will be reached by January, 2015.
The project will create sustainable opportunities for improving economic well being of poor. By making loans available at affordable interest rates, this will
liberate them from the shackles of money lender. The lady at home need not fear and can keep her money safe in the bank. She can leverage this to boost her
savings for contingencies.
The green shoots are already visible. People have put in around Rs 1500 crores in these no-frills accounts. Based on feedback received from banks, financial
services secretary exudes confidence that within a year, total collections will touch Rs 15,000 crores.
Any apprehension that Rs 5000/- overdraft could be drain on banks resources is without basis. How much an account holder will get? This has been left to
discretion of bank. Moreover, fresh loan will be given only after previous drawl has been repaid.
Given initial trends, majority of accounts will have some balance. So, a person will be drawing his own money. Far from making a dent on their balance sheets,
banks will have access to cheap money thereby opening up new window for increasing their profits. It will be a win-win for both the poor and banks.
The RuPay card which has all the features of widely used international credit/debit card, will give to the poor much needed safety and flexibility in conducting
their purchases and availing various services. This will also reinforce their confidence.
When, life is at serious risk every moment, accident cover of Rs 100,000/- available at no cost will be a big boost to financial security of the poor. For millions
of workers in informal sector who have no social security cover, this offers unprecedented comfort.
Government gives huge amounts of subsidies (around Rs 300,000 crores annually on food, fertilizers and fuel alone) besides welfare entitlements like
scholarships, educational allowance, pension etc . Thanks to the leakages, inefficiency and corruption in our governance structures, a major slice of the
subsidies does not even reach the beneficiaries.
PMJDY will create the much needed foolproof financial architecture to ensure that subsidies and other forms of financial assistance reach in full to the target
beneficiaries. Modi himself is taking keen interest and has already ordered a public financial management system (PFMS) to be put in place for this purpose.
PFMS will track money flow and ensure that it gets credited to beneficiarys account.
Finance minister, Arun Jaitely has given a clear indication of governments intention to transit from extant dispensation to a system of direct cash transfer to
poor. The expenditure management commission (EMC) under Dr Bimal Jalan is expected to come out with a road-map before end of current fiscal.
Such humongous amounts channeled through banks will give more incentive to them for expanding their reach thereby contributing to economic empowerment
of millions who have thus far been treated as financial un-touchable.
The economy will also gain by way of elimination of pilferage and a lot of subsidy amount that is currently mis-directed. Resultant savings in expenditure will
help in lowering fiscal deficit, government borrowings, interest rate and inflation.
In a nutshell, PMJDY is a historic financial inclusion scheme that will unfold numerous opportunities for millions of weaker sections of society to improve their
economic status and contribute to enhancing GDP growth.
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15 August 2014 marked a very important day in Indias History. It symbolized the heralding of a new era of
financial security and inclusion. With a fresh new government up in power and new policies and plans were
obvious expectations. As the prime minister of the largest democracy of the world took the podium the
country looked on with abated breath. The declaration of the policy that followed brought a gust of relief and
joy to the lives of the hundreds of thousands poor families across the country.
The Jan Dhan Yojana, an approach to comprehensive financial inclusion is truly a very promising prospect for
the country today. Financial Inclusion basically refers to easy accessibility of financial services at affordable
costs to the disadvantaged and low earning sectors of society. The campaign to bring the masses closer to
the financial system could improve measurements of economic growth and bolster Modi's popularity among
the poor.
Under the scheme, the government will give account holders a debit card and accident insurance cover of up
to 100,000 rupees ($1,654). Good customers would also be eligible for an overdraft facility of up to 5,000
Indian rupees after six months. Those who open an account by January 26,2015 will be given life insurance
cover of Rs 30,000. All companies and banks have been collaborated with for the development of Mobile
Banking platforms for non-smartphone users.
According to minority affairs minister Najma Heptulla, about 42% or 10 crore households out of 24.64 crore
don't have access to banking facilities. About 45% of 16.76 crore rural households and 33% of 7.88 crore
urban households don't have bank accounts.
On the first day (28 August) itself the plan showed silver linings by the opening of a staggering 1.5 crore
bank accounts across 77,852 special camps held throughout the country. In spite of the early plan faces
questions about the difficulties of keeping the accounts alive, funding the overdraft mechanism and
resolving the confusion over the insurance cover.
Whether the plan will be successful or not only time will tell but for now it looks very promising and is a very
bold and confident move from the Governments side.
PM unveils Jan Dhan Yojana to encourage poor

to open bank A/c
BY : PTI
UPDATED ON : Friday, August 15, 2014 04:03(IST)
Tweet
New Delhi :Seeking to integrate the poor into formal banking channel, Prime Minister Narendra Modi today
announced Pradhan Mantri Jan Dhan Yojana under which they will be provided a bank account with
the facility of a debit card and a built-in insurance cover of Rs 1 lakh.
We want to integrate the poorest of the poor with bank accounts with Pradhan Mantri Jan Dhan
Yojana, he said in his maiden Independence Day address to the nation.
Modi said it is essential to provide banking services to the poor people, especially farmers, to save
them from the clutches of moneylenders.
Why are farmers committing suicide? They take loan from money lenders, cannot repay money and
commit suicide. For daughters marriage, they take loans from moneylenders, then their life is full of
miseries. Who will protect those poor families?, he questioned.
Observing that people have mobile phones but not bank accounts, Modi said, the scheme will help in
bringing the benefits of formal banking system to them.
Today there are crores of families which have mobile phones but no bank accounts. We have to
change this. The economic development must benefit poor and it should start from here, he said.
Under the Jan Dhan Yojana, he said, the person who will open bank account will get a debit card and
the family will get Rs 1 lakh insurance cover. This will help the family to tide over the unforeseen
eventuality.
About two-fifths of Indians lack a bank account.
Commenting on the announcement, CII Director General Chandrajit Banerjee said this will bring in
more people into the formal banking channels.
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Showing posts with label Jan Dhan Yojana. Show all posts
Wednesday, March 4, 2015
NPCI to come out with virtual form of RuPay debit card

After launching the RuPay debit card, National Payments Corp (NPCI) is set to come out with its virtual form in the next few months, a move
that will give further push to smartphone-based transactions.
"We are planning to go for pilot of a virtual RuPay card over the next 4-5 months," NPCI Managing Director and Chief Executive A P Hota
said here today.
NPCI is the nodal agency for all retail payment systems under the Jan Dhan scheme.
The physical plastic RuPay card carries a 16-digit number. Under the virtual form, there will be no need of a physical card and a transaction
can be done with the help of the 16-digit number alone.
The initiative will enable all account-holders send and receive money from their smartphones with a single identifier which may include the
Aadhaar number, mobile number or virtual payment address without entering any bank account information.
Average value of the card payment system per head as on date was Rs 1,500 and an average remittance stands at Rs 2,500. Under the new
virtual system, the amount would be much less and may include school fee and grocery payments, he said.
The proposed payments banks are likely to provide this virtual card facility from the beginning, Hota said. "The specifications standards are
now available for payments banks and hence it is a great opportunity for them."
Around Rs 8,000 crore worth of transactions are taking place through IMPS (immediate payment service) per month. What we are doing now
is just putting another extra layer on the already existing system so as to make transaction more easy, Hota explained.
Currently, only around 20 per cent of the total transactions are happening through IMPS and hence NPCI is working on further simplification
of the facility so as to make it more popular in future, he added.
Talking about authentication system for the virtual RuPay card, former Chairman of UIDAI Nandan Nilekani said "with everybody having
cellphones, going forward the single- factor authentication can be the cellphone, replacing the physical cards."
"Later, Aadhaar-based authentication will come on mobile phone in 12-18 months. Second factor of authentication will be the Aadhaar
number. We hope millions of transactions to take place through this mode in the country in days to come," Nilekani said.
Posted by Webmaster at 6:10 AM No comments:
Labels: apply rupay card, how to apply for rupay card, Jan Dhan Yojana, npci, rupay, rupay card, rupay card news, rupay card registration form
Saturday, January 24, 2015
Next phase of Jan-Dhan to offer a range of insurance, pension services
PM Narendra Modi said the banks should redouble efforts in financial literacy and seeding of Aadhar numbers with bank accounts needs to
improve.
Prime Minister Narendra Modi on Saturday outlined the next phase of the Jan-Dhan Yojana to include credit, insurance and pension as he
complimented bankers for near 100% coverage of households under the massive financial inclusion drive.
The Pradhan Mantri Jan-Dhan Yojana is a key policy plank of the Modi administration's vow to eradicate what it calls "financial
untouchability". Each bank account comes with an accident insurance cover, a RuPay debit card and a life insurance policy of Rs 1 lakh.
Account holders will also be provided an overdraft facility of Rs 5,000 later. "Well begun is half done. The Pradhan Mantri Jan-Dhan
Yojana provides a platform for changing the economic condition of our people," Modi told bankers in his email.
"We need to build on this success and leverage these accounts to provide our citizens a wide range of credit, insurance and pension
services. We also need to maintain high standards of customer service. This is the next phase of Pradhan Mantri Jan-Dhan Yojana," the PM
said. He said the target set for opening bank accounts for all households has been surpassed well ahead of the target date of January 26,
2015. "By opening 11.5 crore new accounts in a very short span, we have achieved a coverage of 99.74% of all households in the country. I
congratulate you for your extraordinary efforts," the PM said in his email.
He said doubts were expressed when the drive was launched but the bankers had proved skeptics wrong by achieving "what appeared to be
impossible".
"This feat alone should motivate you, as well as others to work to make our dreams a reality," the PM said. Modi said the banks should
redouble efforts in financial literacy and seeding of Aadhar numbers with bank accounts needs to improve. "Bank Mitras need to be enabled
to carry out RuPay card and Aadhaar enabled transactions in villages itself," the PM said.
"I want you to work to ensure that each account holder enrolls for Aadhaar and seeds it in the bank account. This needs to be done for all
accounts. I am sure you will do this seeding with the same zeal you showed in driving bank account opening," he said,
He said most development activities were hindered by the single disability of not having bank accounts but now that it been overcome,
"benefits have already started flowing to people through some of the "direct benefit transfer" schemes. This not only ensures that benefits
reach people directly, but also utilizes your accounts well," he said. "This is your great contribution to nation-building. We will ensure that
many more schemes utilize the DBT platform," he said.
Posted by Webmaster at 3:06 PM No comments:
Labels: Aadhar Card, Jan Dhan Yojana, obama, Pradhan Mantri Jan Dhan Yojana, republic day, rupay,rupay card, rupay card registration form
Tuesday, January 20, 2015
11.5 crore Jan Dhan accounts opened; New Guiness Book of World Record: Most of
India is banked: Jaitley
"Most of India today is included in the banking system," Jaitley said, adding that more than Rs 9,000 crore has been deposited in the Jan Dhan accounts.
As many as 11.5 crore bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana, exceeding the enhanced target of
10 crore and covering 99.74 per cent of households, finance minister Arun Jaitley said today.
"Most of India today is included in the banking system," he said, adding that more than Rs 9,000 crore has been deposited in the Jan Dhan
accounts.
Prime Minister Narendra Modi announced the financial inclusion scheme in his first Independence Day speech last year. It was launched in
August with a target to open bank accounts for 7.5 crore poor persons by January 26, 2015. The target was later increased to 10 crore
accounts.
Addressing a press conference here, Jaitley said the government would use these bank accounts to pass on benefits to individuals under its
various social security schemes.
Financial Services Secretary Hasmukh Adhia said that even Guinness Book of World Records has recognized the achievements made
under Pradhan Mantri Jan Dhan Yojana.
In its citation, the Guinness Book said: "Most bank accounts opened in one week as part of the Financial Inclusion Campaign is 18,096,130
and was achieved by the Department of Financial Services, Government of India from August 23 to 29, 2014."
Exclusion of a large number of people from the banking network was inhibiting growth, Jaitley said. "Financial Inclusion is one of the top most
priorities of the government.PMJDY is the biggest financial inclusion initiative in the world."
He said that out of the accounts opened, 60 per cent are in the rural areas and 40 per cent in the urban areas. Share of female account
holders is about 51 per cent.
Jaitley said that RuPay cards have been issued to more than 10 crore beneficiaries who will get a benefit of personal accidental insurance of
Rs 1 lakh besides a life insurance cover of Rs 30,000 for eligible beneficiaries.
Describing the scheme as "a game changer for the economy", the minister said that it would provide the platform for Direct Benefits Transfer
(DBT) and help in plugging leakages in subsidies.
Overall, public sector banks alone opened 9.11 crore accounts under PMJDY, followed by regional rural banks which opened about 2.01
crore accounts. On the other hand, 13 private sector banks together open just 37.58 lakh accounts.
According to Adhia, all these accounts are being used for payment of wages under the MNREGA scheme and LPG subsidy. More than Rs
33,000 crore towards MNREGA, LPG and other benefits will be routed through the bank accounts annually.
On the future of the scheme after January 26, Jaitley said the government will take a view on it later.
Responding to a question of duplication of accounts, the minister admitted that there might be some such cases and that was the reason for
enhancing the target to 10 crore accounts.
The issuance of the RuPay cards to account holders would encourage use of plastic money and help in moving towards a cashless society,
Jaitley said.
The proposal to provide overdraft facility in such accounts would also act as micro finance and prevent people from taking loans at exorbitant
rates from money lenders.
Jaitley said that most of the country has been covered by the PMJDY, except those areas which have poor connectivity, are impacted by leftwing extremist and are inaccessible.
Labels: apply for rupay, arun jaitley, finance minister, form for rupay card, Guiness Book of World Record,Jan Dhan Yojana, lic, MNREGA, Pradhan Mantri Jan Dhan
Yojana, rupay card, rupay card application
Sunday, January 11, 2015
Private banks lag behind PSU lenders in opening Jan Dhan a/c
Private sector banks are way behind their PSU

peers when it comes to opening financial inclusion accounts under thePrime Minister's Jan Dhan Yojana,with just about 30 lakh in over
four months.
The state-owned banks have opened 8.62 crore such accounts in the same period. The number of such accounts opened by even regional
rural banks stands at 1.92 crore.
Private banks have a market share of about 20 percent, but their contribution in this flagship financial inclusion programme of the
government is only about three percent.
As per the latest Finance Ministry data, 13 private sector banks have opened 30.47 lakhJan Dhan bank accounts as against 8.62 crore
by state-owned banks as on January 7.
Prime Minister Narendra Modi launched the financial inclusion scheme on August 28, 2014. The initial target was to open 7.5 crore such
accounts, but the later it was revised upwards to 10 crore to be completed by January 26, 2015. However, this target has already been
achieved.
Taking into account the regional rural banks, so far a total of 10.84 crore Jan Dhan accounts have been opened so far by all banks in the
country.
Among private banks, just three of them -- HDFC Bank, ICICI Bank and J&K Bank -- account for about two-third of total accounts opened
by private sector lenders.
HDFC Bank has opened 7.8 lakh such accounts, followed by ICICI Bank's 6.67 lakh and Jammu and Kashmir Bank's 6.06 lakh.
Country's third largest private sector lender Axis Bank have opened 2.45 lakh accounts and Kotak Mahindra Bank has opened just 54,000
accounts.
As far as public sector banks are concerned, they have opened more than 8.62 crore Jan Dhan accounts.
Country's largest bank SBI has opened 2.15 crore accounts, followed by Punjab National Bank (61.74 lakh), Bank of Baroda (58.47 lakh),
and Canara Bank (53.79 lakh).
The main features of the PMJDY scheme include Rs 5,000 overdraft facility for Aadhaar-linked accounts, RuPay Debit Card with inbuilt Rs 1
lakh accident insurance cover.
Besides, account holders under the scheme will get life insurance cover of Rs 30,000. This was additional benefit announced by the Prime
Minister during the launch of the scheme.

Labels: apply rupay card, Axis Bank, hdfc bank, icici bank, Jan Dhan Yojana, kotak mahindra bank, prime minister modi, rupay card registration form
FM: Benefits of Demographic Dividend will flow only if our Population is Healthy,
Educated and Properly Skilled
Meets Representatives of Social Infrastructure, Human Capital and Development Groups as Part of his Pre Budget Consultative Meeting
The Union Finance Minister Shri Arun Jaitley said that apart from on-going schemes and programmes for the marginalized and vulnerable
section of the society, the Government has initiated various special social sector programmes. He said that these programmes among others
include Swacch Bharat Mission (Gramin), which will set the base for improving sanitation and health standards; Pradhan Mantri Jan Dhan
Yojana (PMJDY)and RuPay debit card which will extend financial inclusion and give financial empowerment to the account holders at
large.
The Finance Minister, Shri Jaitley was making his Opening Remarks during the Pre Budget Consultative Meeting with the representatives of
Social Infrastructure, Human Capital and Development Groups. He said that more than 63% of the population is in the age group of 15-59
years, broadly termed as India's demographic dividend. He said while this young population provides India a great opportunity, but it also
poses a great challenge to the Government. He said that benefits will flow only if our population is healthy, educated and properly skilled. In
this context, he said that investments, especially in social infrastructure that build-up human capital are crucial. Shri Jaitley said that India
needs to take advantage of this demographic window in the next couple of decades and garner its benefits.
Therefore, the Finance Minister said that his Government has put thrust on skill development as well as on 'Make in India' as the
Government's endeavour to improve employability and create large employment avenues for the youth among others. He said that skill
development has been given focused attention for which a dedicated Department of Skill Development and Entrepreneurship has been
created in the Central Government. He said that the challenge for the country now is in planning and acting towards converting its potential
demographic force for enhancing opportunities of growth by dovetailing the quality of manpower to the requirements of employers, both
domestic and international.
The Union Finance Minister Shri Arun Jaitley said that emerging trends indicate the growth deceleration in India has bottomed-out. The
Finance Minister said that significant downward trend in inflation has also been recorded in the second and third quarter of 2014-15. He said
that external environment has also largely turned in India's favour. In such a back drop, the Finance Minister said that domestic policies to
achieve macro-economic balance and the on-going process of economic reforms would lend further strength to the recovery of the economy.
Various suggestions were received from the representatives of the different social sector groups during the meeting. Major recommendations
include that immediate steps be taken in the budget to prevent any scope of diversion and misallocation of funds meant for the benefit of
dalits and adivasis. This will result in about Rs. 30,000 crore to be available for the development of Scheduled Caste and Scheduled Tribes.
Other suggestions include to set apart in the coming budget the entire 16.2% for Scheduled Castes and 8.2% for Scheduled Tribes,
establishment of well designed and dedicated institutional mechanism for Schedule Caste Sub Plans (SCSPs) Tribal Sub Plans (TSPs)
separately at the Centre and State levels, creation of a separate unit within Niti Ayog with power to review, monitor and direct to ensure
effective implementation of the SCSP and TSP as well as setting-up of a nodal unit headed by a Joint Secretary with the responsibility of
preparation of Annual SCSP Plans and their subsequent implementation.
Other suggestions include adequate allocation for ICDS budget, Mid Day Meal Scheme and for the programmes for the nutrition of mother
and child under Food Security Act as well as clear demarcation of funds to remove malnutrition among children of dalits and adivasis etc.
Besides this, there was suggestion for budget transparency at local level in order to have better utilization of funds and results of various
social welfare schemes at the grass root level etc.
Other suggestions made during the aforesaid meeting include that a mechanism needs to be built to develop entrepreneurship among dalits,
schemes to be brought out for developing art and culture of dalit and adivasi communities. Suggestions were also made about proper
implementation of Prevention of Domestic Violence against Women Act, appointment of women protection officers, increasing the scope of
Nirbhaya Fund to cover the domestic violence against women etc. A suggestion was made that Finance Minister may include a statement in
his Budget Speech condemning violence against women showing unequivocal commitment of the Government in this regard.
Some suggestions were also made on investment on youth, especially from those of socially excluded communities, investment in skill and
entrepreneurship building, more spending on education and social enterprises, inclusion of youth leadership in CSR activities, higher
spending to change the social mindset of people against the use of toilets etc.
Other suggestions include adoption and implementation of the National Competition Policy to push the growth on higher trajectory, adoption
and implementation of Public Procurement Act. As public procurement accounts for almost 30% of the total GDP worth US $136 billion
annually, therefore, Public Procurement Act would help in promoting the good governance by curbing corruption in public procurement; and
adoption of a National Public Procurement Policy; adoption and implementation of Financial Consumer Protection Act, fixing of fiscal
management practices by establishment of Parliamentary Budget Office, adoption of international best practices in budgetary planning and
reduction of non-merit subsidies among others.
In end, suggestions were also made for enhancement of allocation to education with an emphasis on making functional investment in early
childhood and elementary education, enhanced allocation to education to 6% of GDP in line with Kothari Commission and National
Education Policy recommendations and enhance allocation to elementary education by 1% to accommodate a cumulative gap in education,
enhanced allocation to areas with strongest implications on quality-availability of teaching learning materials, improved libraries and
strengthening of the capacity of the resource unit at the cluster level, enhance allocation for research, monitoring and evaluation, address
gaps in financial and planning process to ensure full expenditure of allocated funds in education sector among others.
Labels: apply for rupay, form for rupay card, Jan Dhan Yojana, PMJDY, rupay card, rupay card registration form, rupay credit card, RuPay debit card, rupay news
Sunday, January 4, 2015
10 crore Jan Dhan accounts, 73% zero balance

PUNE: The government on Friday said that banks had gone past the target of opening 10 crore Jan Dhan accounts and had managed to
cover 98% of the households, prompting to now launch a "challenge" to find out if any family remained without access to basicbanking
facility.
In recent weeks, there has also been a significant increase in the funds deposited in theJan Dhan accounts with the corpus in the 10.36
crore accounts going past Rs 8,000 crore, according to data available with the finance ministry. But 7.6 crore account holders, which is
around 73% of all Jan Dhan accounts, had zero balance on December 30.
"We had done surveys and it shows that across several states we have achieved 100% household coverage. There are some households
that are not allowing us access so we will launch a challenge to help find out if there are households that still do not have coverage," financial
services secretary Hasmukh Adhia said on the sidelines of the Banker's Retreat here.
He clarified that of the 25 crore households in the census, around 22 crore households had participated in the survey conducted by banks
and the percentage of households was based on these. He said that the three-odd crore households lived in gated communities and affluent
areas and didn't need help in opening accounts.
In August, the Narendra Modi government launched an ambitious plan to provide all households with a bank account and had hoped to
open 7.5 crore accounts by January. But the target was achieved much earlier and the government realized that all households were still not
covered, prompting it to scale the target, which has now been achieved.
The household coverage report available with the government showed that there are few states such as Manipur (78%), Nagaland (76%),
Meghalaya (83%), Arunachal Pradesh (84%), Odisha (86%), Sikkim (89%) and Jammu & Kashmir (89%) which still have a large number of
households without access to a bank account. But several of the traditional laggards such as Bihar, West Bengal and Uttar Pradesh have
near universal coverage.
In some of the districts such as Meghalaya's East Jaintia Hills and South West Khasi Hills, there is zero coverage. Adhia told TOI that special
attempts will be made to reach to this population so that no one is left behind. In addition, he said that banks are being asked to sensitize
account holders about using the RuPay debit card within the first 45 days so that they are entitled to the insurance facility.
Labels: banking sector, Jan Dhan Yojana, Jan Dhan Yojana scheme, PMJDY, Pradhan Mantri Jan Dhan Yojana, rupay card, rupay credit card, RuPay debit card
Jan Dhan: enrolees over 60 short-changed on life cover

A RuPay card under the Jan Dhan scheme may not be enough for nominees to get the death benefit of 30,000 when an account holder
passes away. Some nominees found this out recently, to their surprise.
Gowramma (name changed), from Karnataka, passed away recently. State Bank of Mysore, where she is a Jan Dhan account holder,
rejected the nominees claim for the death benefit of 30,000 as the deceased was above 60 years of age.
According to the Finance Ministry approved norms for life cover under the Jan Dhan scheme, the eligibility for risk cover ceases when a
person turns 60.
These guidelines were framed long after the launch of the scheme and many elderly people had enrolled for the same when it was launched
by Prime Minister Narendra Modi in late August. Under the current norms, the account holder will have to exit the life insurance scheme the
day he or she turns 60.
State Bank of Mysore has till date received four cases each claiming death benefit of 30,000 under the scheme.
Of them, two claims were rejected straightaway as the deceased were aged above 60, sources in the bank said.
The claims for the other two cases are being processed though the bank is not clear as to which LIC office the claim papers have to be sent
for final settlement.
Confusion over claims

Public sector banks are in a state of confusion on the issue of handling claims. Even accident insurance claims are reaching the doorsteps of
these banks.
Although the banks have till date issued 8.4 crore RuPay cards for over 10 crore Jan Dhan accounts, they do not want to foot the death
benefit bill for the life cover. They are only keen on having a foolproof mechanism to pass on the claims to Life Insurance Corporation. Both
LIC and the public sector banks are yet to firm up a seamless mechanism for claims settlement under the life cover promised under scheme.
Meeting held
On Wednesday, representatives of the Finance Ministry, Indian Banks Association and public sector banks held a meeting to discuss the
nitty-gritty of claims settlement for the 30,000 death benefit promised under the scheme.
There is a need to map LIC branches with those of the banks so that claims could be processed seamlessly, said the chief executive of a
public sector bank.
Currently, banks are not fully aware about how to take the process forward in case nominees come up with claims.
Indications are that the nominees will now be asked to furnish an affidavit confirming that the deceased was the head of the family or that
he/she was an earning member of the family, and in the age group of 18-59.
Labels: Jan Dhan Yojana, Jan Dhan Yojana scheme, rupay, rupay card, rupay card news, rupay credit card, RuPay debit card
Monday, December 29, 2014
RuPay debit cards could be the Jan Dhan Yojanas undoing

The lack of formal banking and cash is one of the toughest constraints in the rural areas of India. The Jan Dhan Yojana might be the best
strategy to overcome this. But this ambitious scheme has one critical flaw that could ruin it and result in its failure to deliver on promises: the
RuPay debit card. To ensure the success of the yojana, it is essential that the RuPay debit card plan be shelved, because it poses a huge
reputation risk the failure of the card could have damaging consequences for the scheme as a whole.
For families which have been offered bank accounts under the scheme, the advantages of a cash-based economy are just a step away.
Except in the case of the lowest deciles, poor families do have some assets but, in the absence of a ready market for them, they are forced
to make distress sales for even routine transactions. Having cash in the bank and, more importantly, a way to easily deposit and withdraw
money, will be a force-changer for these families once the banking habit spreads.
The weakness in the system comes from the introduction of the debit card. It introduces the risk of a third party meddling with the savings
bank deposits of crores of first-time account users. Earlier government programmes have become non-starters for similar reasons. But
before going into this in detail, just imagine the landscape the debit card would create for new bank account holders. Recollect the tense
times we went through when we first got cards debit or credit. Recollect those tentative moments eons ago, when we operated an ATM
machine for the first time.
In lakhs of villages across India, instead of offering frugal banking, we are trying to replicate these experiences. The debit card has to be
preserved, kept reasonably dust free and intact for its magnetic strip to operate. Though the account wont be frozen if the card is not used,
the accident insurance cover gets cancelled if it is inactive for 45 days.
But this isnt the chief obstacle. Repeated observations of auditors and independent studies about previous government schemes throw up
two concerns. First, there is always one stage or point at which the beneficiary has to approach the district administration or the bank to get
into the scheme. This is the point at which money could leak out of the scheme. The second concern is complication. The RBI list of
frequently asked questions on the Jan Dhan Yojana, sent to all banks, acknowledges this the branch manager will have to advise all the
related risks to the illiterate account-holder at the time of issuance of RuPay card. The RuPay debit card is in line to be the leakage point
from the scheme. It has the weakness of being complex and requiring a third party to administer.
The results could be devastating. Remember, for instance, in the Integrated Rural Development Programme, the loan scheme had two
components: a subsidy provided by the government and a loan given by the bank. People may recall the standing instructions issued by
bank headquarters to hand over the subsidy to the district or zila parishad representative but not to disburse the loan. The recipient got some
money, the officials took a cut, and there was no pressure to repay a loan.
The Jan Dhan overdraft could meet the same fate, of being parcelled out, with the account holder getting the smallest share. To reduce the
hassle and risk of keeping the card with themselves, a sizeable percentage of people, typically the weakest, might give it to someone else for
safekeeping a village leader or the bank manager. This is a real risk. The account holder knows if she does not put more money in the
bank, she is safe from further loss, so, she will keep her account dry. Yet the safekeepers could purloin the account holders share of
government subsidy.
The RuPay debit cards problem is that it is a physical object and, like any government property, lends itself to widespread misuse. A far
better option would have been a frugal banking plan based solely on a single-number platform like Aadhaar, with biometric identification, or
a telecom number-based identification platform like M-Pesa for the Jan Dhan account holders to remember and use. Every benefit could
have been credited to this account.
The debit card adds nothing to the experience of operating a bank account for the new entrant but has all the elements necessary to wreck
it.
Labels: Aadhar Card, ATM, Jan Dhan Yojana, npci rupay, PMJDY, RBI, rupay card atm, RuPay debit card
Monday, December 22, 2014
7 things to know about Pradhan Mantri Jan Dhan Yojana
New Delhi: On 15th August 2014, Prime Minister Narendra Modi, from the historic Red Fort, had announced the launch of Pradhan Mantri
Jan Dhan Yojana (PMJDY). The primary aim of this scheme is to provide poor people access to bank accounts. However, the account comes
with some benefits as well.
India TV brings you seven must-know points about PMJDY:
1. The scheme covers both urban and rural areas of India. All bank accounts will be linked to a debit card which would be issued under the
Ru-Pay scheme. Rupay is Indias own unique domestic card network owned by National Payments Corporation of India and has been
created as an alternative to Visa and Mastercard.
2. Under this scheme, every individual who opens a bank account becomes eligible to receive an accident insurance cover of up-to Rs 1
Lakh for his entire family.
3. A person who is already having a bank account with any bank need not open a separate account under PMJDY. He/she will just have to
get issued a RuPay Card in his existing account to get benefit of accidental insurance. Over-draft facility can be extended in the existing
account if it is being operated satisfactorily.
4. Accidental Insurance coverage under PMJDY: Accidental insurance of Rs 1 lakh is available to all RuPay card holders in the age group of
18-70 where RuPay card needs to be used once in 45 days of receipt. Claim intimation should be given to his or her bank where account is
maintained within 30 days from the date of accident.
5. Life Insurance coverage under PMJDY. Only one person in the family will be covered and in case of the person having multiple
cards/accounts, the benefit will be allowed only under one card i.e. one person per family will get a single cover of Rs 30,000. The claim of
Rs 30,000/- is payable to the nominee(s) of account holder who need to submit necessary documents to the Nodal Branch of the concerned
Bank. Government employees (serving/retired) and their families, persons filing Income Tax Return/TDS deductees and persons covered
under the Aam Adami Bima Yojana, are ineligible for Life insurance under PMJDY.
6. Once the bank account has been active for 6 months and linked to Aadhar card, the person would become eligible for an overdraft of up to
Rs 2,500 which would further be enhanced by the bank to Rs 5000 over time.
7. The scheme also provides incentives to business and banking correspondents who serve as link for the last mile between savings account
holders and the bank by fixing a minimum monthly remuneration of Rs 5000.
Labels: Aadhar Card, Jan Dhan Yojana, Jan Dhan Yojana scheme, PMJDY, prime minister modi, rupay card, RuPay debit card, rupay news
Tuesday, December 16, 2014
Jan Dhan Yojana Beneficiaries Face ATM Access Shortage; Cap On Transactions
Risks Scheme
As more people are brought under the Pradhan Mantri Jan Dhan Yojana (PMJDY)scheme, their ability to access cash through ATMs
remains a conundrum as the deployment of these machines is failing to match the requirement.
Banks and ATM operators worry that low intercharge fee and a cap on the number of free ATM transactions are making the scheme
unviable.
A warning was sounded by the CATMi (Confederation of ATM Industry), an association of companies who deploy ATMs for banks, about the
risk of high dormancy among accounts opened under PMJDY if enough ATMs were not made available to service thenew account holders.
Under the PMJDY, banks have registered 8.83 crore new account holders, issuing 5.85 crore RuPay cards, said BusinessLine.
RuPay is a domestic card scheme facilitating a multilateral system of payments in India, as per RBI's directive.
The newly issued card requires an ecosystem that supports it. New machines see less than 100 transactions a day, against a minimum of
120 required for an ATM operator to break even.
ATM operators and banks point to operating costs involved in keeping a machine running and say that existing interchange fee is not enough
to sustain the business model, affecting their ability to install more ATMs.
The April to June quarter for the year saw ATM deployment grow at a measly 1% to the corresponding quarter a year ago.
The total number of ATMs in India stand at 1,67,000 as of June 2014; Point of Sale (PoS) terminals account for 1.08 crore.
ATM unavailability limits Card adoption
Tata Communications Payment Solutions CEO Sanjeev Patel highlighted the tremendous work done in bringing the rural populace under the
banking scheme, and added that "not much" had been done to make the card adoption easier.
According to Patel even when card issuance has seen an upswing, the ecosystem necessary to support it is dwindling, with many players
choosing to slow down deployment.
A report by Deloitte and CII makes a case for 20,000 new ATMs to be available in the first phase of Narendra Modi government's financial
inclusion plan; expected to run from August 15, 2014 to August 14, 2015.
Organized Banking Route at risk
Many Indian banks, state-owned and private, have capped the number of free transactions per month. However, a few banks insist that
account holders who manage to maintain a good balance would be eligible for a charge waive-off.
Experts express fear that the added cost of transaction on the small value amount could drive people away from the organized banking
route, defeating the very purpose of the scheme.
People with less or no balance, are the ones who need financial inclusion more than others; and it is this particular sub-set, inclusive of the
urban poor, who will always need less money to withdraw, says Tata's Patel.
ICRA's co-head Financial Sector Ratings, Vibha Batra, pointed to the proliferation ofATMs in dense urban centres, where the number of
transactions per ATM were lower and also per account deposits in rural areas average around Rs. 3,000 to 5,000, and the number of
transactions per ATMs was less and of low value.
The new banks to come up IDFC and Bandhan Financial Services, could, however, change the financial landscape. The upcoming small
banks will require adequate cash transfer and payment infrastructure mechanism to be in place in the next 2-3 years, creating an alternate
channel of banking services.
Labels: bank of india, CII, Jan Dhan Yojana, PMJDY, rupay, rupay atm, rupay card, rupay credit card,RuPay debit card, rupay online
Life insurance cover under Jan Dhan comes with riders
Keen to push through its financial inclusion plan, the government has finalised the life insurance cover to be provided under the Pradhan
Mantri Jan Dhan Yojana. But unlike expectations, the cover has several riders, meaning that not all those who have opened an account
under the scheme would be eligible for life insurance.
For starters, the Rs 30,000 life insurance cover would be limited to just one account holder per family. The person should normally be the
head of the family or an earning member of the family and should be in the age group of 18 to 59, the guidelines state.
While the beneficiary will have to mandatorily exit the life insurance scheme at the age of 60 years, the cover is at present available only for
a period of five years till 2019-20, after which it will be reviewed.
In addition, the eligibility criteria state that life insurance would be available only to those people opening a bank account for the first time
between August 15, 2014 and January 26, 2015.
Further, the person must have a valid RuPay Card and biometric Card linked to the bank account or in the process of being linked to the
bank account.
The Centre has also excluded various categories of people from the scheme, including Central and state government employees, people
whose income is taxable under the Income Tax Act, 1961 or TDS is being deducted from the income, and their families.
Persons who are included in the Aam Aadmi Bima Yojana covering 48 occupations defined under the Scheme, and their families have
also been excluded. Further, other eligible account holders who have life cover on account of any other scheme of the Bank against the
account will have to choose between the two life covers.
Prime Minister Narendra Modi had launched the scheme on August 28, this year with the intent of financially empowering the people by
opening bank accounts for two persons in every household.
Additionally, they are to be given a RuPay debit card, accidental insurance cover of Rs 1 lakh and an overdraft facility.
The government has targeted 7.5 crore households under the scheme. At present, 9.04 crore accounts have been opened with total deposits
of Rs 7,006 crore. However, 6.68 crore accounts continue to be dormant. Life Insurance Corporation of India is responsible for the life
insurance cover through a special fund for the purpose which has an initial corpus of Rs 100 crore from the Social Security Fund.
Eligibility criteria
* Insurance would be available only to those people opening a bank account for the first time between August 15, 2014 and January 26,
2015.
* While the beneficiary will have to mandatorily exit the scheme at the age of 60 years, the cover is at present available only for five years till
2019-20 after which it will be reviewed.
Labels: 1 lakh insurance with rupay card, Jan Dhan Yojana, modi, rupay card, rupay card atm, rupay card form, rupay card online, rupay card registration form, rupay credit
card, RuPay debit card
Moving towards full financial inclusion

The President of India, Shri Pranab Mukherjee inaugurated today (December 11, 2014) a Financial Literacy Centre and a Financial Library at
Dr. Rajendra Prasad Sarvodaya Vidyalaya in the Presidents Estate. A Financial Awareness Festival was also held in which students of Dr.
Rajendra Prasad Sarvodaya Vidyalaya as well as residents of the Presidents Estate were trained in financial literacy using a model bank
branch of the State Bank of India. NPCI through RuPay Cards gave Rs. 25/- credit to each student to buy books, educating them thereby
about card transactions. Financial games, quizzes and other activities were also organized for students, children and parents.
The Rashtrapati Bhavan launched a campaign for turning the Presidents Estate into a financially inclusive township (FIT) on September 27,
2014.
The campaign included:A financial literacy programme.
Enrolling all residents in UIDAIs Aadhar scheme.
Opening of Saving Bank Accounts for the unbanked under the Pradhanmantri Jan Dhan Yojana.
Enrolment of people in Swavalamban, - a special scheme of the Pension Fund Regulatory and Development Authority for those belonging to
the unorganized sector.
Issue of RuPay Cards to new as well as existing account holders of the United Bank of India within the Estate.
To develop a comprehensive strategy, an action plan was developed in association with representatives of United Bank of India, State Bank
of India, National Payment Corporation of India,Pension Fund Regulatory and Development Authority, UIDAI etc. Financial literacy-cuminclusion camps for residents of the Estate were organized on September 27-28, 2014 and December 7-9, 2014to enrol residents of the
Presidents Estate in various schemes.Special attention was given to senior citizens, women, special children, domestic help and contractual
workers.
Subsequent to the camp held in September 2014, the United Bank of India carried out a comprehensive survey through door-to-door
mapping to ensure that there are no households left without any bank account. Domestic help and contractual workers not covered under
any health scheme were also provided benefits under the Delhi Governments Arogya Yojana.
The pilot project to make Presidents Estate an FIT has been undertaken to establish a model of convergence in government programmes
and services and ensure that benefits of various schemes accrue to all residents of the Presidents Estate, who number around 5000
persons.
Labels: financial inclusion, Jan Dhan Yojana, National Payments Corporation of India (NPCI), npci,npci.org, rupay, rupay card, rupay card news, rupay credit card, RuPay debit
card, rupay news, UIDAI
Sunday, December 7, 2014
Banking on rural deposits

The Jan Dhan Scheme has by far been the quickest and most expansive financial inclusion drive launched in the country. It was launched
with a set target for the existing banks. The results are quite amazing and actually provide some guidance to the new players entering the
market as payments or small banks.
So far, 81.2 million accounts have been opened of which 60% are in rural areas. Banks, primarily public sector banks (PSBs), have issued
51.1 million RuPay cards for these accounts. Deposits in these accounts were R6,355 crore as of November 26. Interestingly, there were
60.7 million zero-balance accounts, which implies an average of R3,100 in the non-zero accounts. This scheme has been aggressively
implemented and the focus was more on opening accounts with minimum KYC norms to expedite the process. The idea is laudable as it is a
quick way of accomplishing a task. But the high zero-balance accounts, as well as low balances on an average, actually signal that these
households typically do not have the money to keep as deposits or are sceptical of the same. Alternatively, they may not really be interested
in such deposits, notwithstanding the add-ons of a debit card as well as possible future credit and insurance going forward.
Therefore, RBIs decision to start issuing licences to payments banks that will take savings bank deposits and invest only in government
securities for a 1-year duration or less and, to a certain extent, in other bank deposits, will pose a challenge to the licensees as they will have
to create a superstructure to keep their business going. All options are open and telecom companies and other card-based companies can
tie their businesses with bank accounts and probably be more successful than banks as there is already an existing business relationship
with the customer. The question is will these households actually keep the deposits with these banks or not?
Post offices qualify for such a licence and are well poised to leverage this market. They would only have to scale up and not really have to
start afresh like the supermarkets or telecom companies. Their deployment of funds too would changepassing it on to the Centre and
states; they will have to deploy all in short-term paper. Their operations too have to be altered unless a new Post Office savings bank is
opened in the same premises, as there are other products being offered which can no longer be donepostage, fixed and recurring
deposits, and small savings (including the Kisan Vikas Patra). Regulation does not permit the same and, hence, a new bank may be created
for this purpose. However, for an completely new entrant, the establishment costs would be considerable.
The model, for any entrepreneur, makes a lot of sense as the bank will get deposits at 4% or free (current accounts) and can earn a good 78% return. Operational costs will be low at 1-2%, and hence a return of 1-2% can be maintained without any encumbrance of NPAs or capital
as these variables will become irrelevant given the business model. However, if fresh infrastructure is to be created then there would be high
overheads.
The small bank concept is, of course, more challenging as 75% of the funds have to go to priority sector lending, to the farm sector and the
SMEs, with a cap of R25 lakh for 50% of the loans. This will be on top of the CRR and SLR requirements. Intuitively, it can be seen that the
cost of servicing these small-sized loans would be high for these banks which will also have to open up brick-and-mortar branches, unlike the
payments banks.
Additionally, both these segments are vulnerable. When the monsoon fails, the farm loans go bad and the cycle of monsoon failures has
been moving with shorter amplitudes. Further, the economic cycle too has become more unpredictable and, often, a sustained industrial
slowdown results in higher NPAs being generated as they get affected almost immediately when the economy slows down. This being the
case, the pressure on quality would be high. This will also pressurise their capital and hence will be onerous, unlike it is for commercial banks
where the portfolio is well spread across all sectors, smoothening the risks .
MFIs and NBFCs can apply here and it will be interesting to see if they are attractive to these players. This will hold for MFIs who would get
access to deposits in a formal manner and can lend to these segments where there is a modicum of familiarity. NBFCs, too, may be inclined
to consider this option given that the regulatory structure has become a little more intense for them in their normal line of business.
The crux of these banks working well would depend on their ability to garner deposits in the rural areas in particular. The Jan Dhan
Yojana warns that it may be difficult to get the deposits, though opening accounts would be easy. It will require a lot of awareness. Counterintuitively, if the Jan Dhan programme that offers the promise of credit and insurance has not caught on, would a plain vanilla deposit be
convincing to the household. This is where the payments bank should work and linking ones own product to the deposit could be a good way
of making a start.
Labels: desi rupay card, Jan Dhan Yojana, Jan Dhan Yojana scheme, PMJDY, rupay, rupay atm, rupay card news
Jan Dhan scheme rush: Banks run short of passbooks

Beneficiaries of the Centre-sponsored Jan Dhan scheme are yet to receive their passbooks even after opening accounts two months ago
as banks are facing a severe shortage of booklets.
According to a data provided by Syndicate Bank the lead bank for the project in Meerut circleover 1.75 lakh accounts have been opened
under this scheme in Meerut. District manager of the lead bank, BD Pandey, said, "About 70% new account holders have been given the
passbooks but the accounts are opened in such huge numbers in all the banks that it is not possible to provide passbooks to all the
costumers. The crisis is not just in Meerut, but prevails in entire state. All the banks are sending their demands to concerned head offices but
it will take some time to fulfil the demand."
The situation in Baghpat district is worst. Here, over 36,000 accounts have been opened under the scheme but only 40% costumers got their
passbooks. A number of costumers did not even get their account numbers. A resident of Brahamanputthi village in Baghpat, Sonam, said, "I
have been visiting the bank for last two months continuously but neither had I got my account number nor the passbook. Every time bank
officers tell me that account number will be given with the passbook."
Amidst such situations, the residents are worried over the fact that how they would deposit their savings without having a bank account
number and enjoy the benefits of the 'Jan Dhan scheme.'
Pradhan Mantri Jan Dhan Yojana is a scheme for comprehensive financial inclusion launched by Prime Minister, Narendra Modi on 28
August 2014. He had announced this scheme on his first Independence Day speech on 15 August 2014. Under this scheme, account
holders will be provided zero-balance bank account with RuPay debit card, in addition to accidental insurance cover of Rs 1 lakh. Those
who open accounts by January 20, 2015 over and above the 1 lakh accident cover, they will be given life insurance cover of Rs 30,000.
Labels: Aadhar Card, Jan Dhan Yojana, PMJDY, Pradhan Mantri Jan Dhan Yojana, rupay, rupay card,rupay card news
Sunday, November 16, 2014
Blistering pace: 6.5 crore bank accounts opened so far under Jan Dhan scheme
Banks, especially public sector and regional rural banks, are going all out to open accounts for individuals from low-income segments.
Under the Prime Minister Jan-Dhan Yojana (PMJDY), which was launched on August 28, banks collectively opened a whopping 6.51 crore
basic savings bank deposit accounts (BSBDA) in just two months.
Going by the blistering pace at which banks are opening accounts, in all probability, they will surpass the target of reaching 7.5 crore unbanked families by January 26, 2015.
Of the 6.51 crore new accounts that have been opened so far, 4.95 crore are with zero balance, as per data submitted by banks to the
Finance Ministry.
Banks mobilised deposits aggregating 4,857 crore from the remaining 1.56 crore new accounts. What this means is that new customers, on
average, deposited 3,113 per account.
Public sector banks and regional rural banks accounted for 81 per cent and 16 per cent, respectively, of the total accounts opened
under PMJDY. The response of private sector banks to the Yojana has been lukewarm.
While banks went all out to open the accounts, they could not issue RuPay debit cards to almost half of the new customers.
RuPay cards
With banks aggressively taking up the task of opening accounts under the PMJDY, supply of RuPay cards lagged demand. However,
steps have been taken to augment the supply of cards.
By December 15, all customers who opened accounts under the PMJDY will receive the cards, said a senior public sector bank
official. PMJDY is a National Mission for Financial Inclusion. It seeks to ensure access to financial services, namely, banking/savings and
deposit accounts, remittance, credit, insurance and pension in an affordable manner.
RuPay debit card is the home-grown card payment scheme launched by the National Payments Corporation of India to rival global payment
processing giants Visa and MasterCard.
Under PMJDY, the debit cards comes with 1 lakh accident insurance cover, and an additional 30,000 life insurance cover for those
opening bank accounts before January 26, 2015.
The performance of the BSBDA is monitored and overdraft facility of up to 5,000 is given in a phased manner.
To remain eligible for the 1 lakh accident insurance cover that comes with the BSBDA, the RuPay cards have to be used at least once in
45 days.
At a recent meeting, Finance Ministry mandarins told top bankers that mere issuance of cards will not suffice.
The cards have to be activated at the earliest and made operational.
Labels: credit card, icici bank rupay card, Jan Dhan Yojana, Jan Dhan Yojana scheme, PMJDY, Pradhan Mantri Jan Dhan Yojana, rupay card, RuPay debit card
Monday, November 10, 2014
5 crore Jan Dhan accounts outside Rs 1 lakh accident insurance ambit
Five crore of the seven crore bank accounts opened under the government's flagship financial inclusion programme, Pradhan Mantri Jan
Dhan Yojana (PMJDY), have fallen outside the ambit of the in-built Rs 1 lakh accident insurance cover as these accounts have seen no
transaction since they were opened.
Bankers and insurance industry executives say rules require at least one transaction in the account in the preceding 45 days for an account
holder to be eligible for the insurance cover. But of the seven crore accounts opened under the scheme, only 1.71 crore accounts have seen
transactions while the rest have had zero balance since they were opened, which means there have been no transactions in these accounts.
PMJDY, which was launched by Prime Minister Narendra Modi on August 28, seeks to cover 7.5 crore un-banked households in the country
in the first phase. It provides Rs 5,000 overdraft facility for Aadhar-linked accounts and RuPay debit card, besides a Rs 1 lakh accident
insurance cover "If an account holder meets with an accident during the 45 days when there has been no transaction in his account, he is not
entitled to the insurance cover," said a senior executive with state-run Vijaya Bank who is involved in implementing PMJDY.
The executive said most of the account holders seem unaware of the '45-day clause'. "We are trying to explain it to them," he said. National
Payment Corporation of India (NPCI), which has an agreement with private sector HDFC Ergo to provide this insurance cover, is of the view
that the accident insurance should not be looked as a plain vanilla welfare measure. "These are initial days of the scheme and there is no
need to get disheartened," said AP Hota, managing director and CEO of NPCI."Most of these accounts will be soon linked with various direct
benefit transfer schemes and then there will be regular transactions."
The government is all set to launch a modified direct benefit transfer for liquefied petroleum gas (LPG) on a pilot basis in 54 districts across
the country. Under the scheme, LPG consumers will be able to get subsidy directly in their bank accounts even if they do not have Aadhaar
numbers.
So far, under PMJDY around 32% accounts have been seeded with Aadhaar and around 4 crore have been issued the Rupay debit card.The
prime minister had earlier said that a lot of effort will be required in promoting financial literacy among the new account holders. "New
accounts also need to be kept alive and properly utilised.

Aadhaar numbers will need to be seeded in bank accounts," he had said.Towards this end, the finance ministry is working on to increase the
reach of banks through various models, including banking correspondents to facilitate banking facilities.
Five crore of the seven crore bank accounts opened under the government's flagship financial inclusion programme, Pradhan Mantri Jan
Dhan Yojana (PMJDY), have fallen outside the ambit of the in-built Rs 1 lakh accident insurance cover as these accounts have seen no
transaction since they were opened.
Bankers and insurance industry executives say rules require at least one transaction in the account in the preceding 45 days for an account
holder to be eligible for the insurance cover. B ..
Read more at:
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Labels: 1 lakh insurance with rupay card, Jan Dhan Yojana, Jan Dhan Yojana scheme, PMJDY, Pradhan Mantri Jan Dhan Yojana, rupay card, rupay card news, rupay news
Jan Dhan balance tops Rs 5,000 crore mark, nearly 7 crore accounts opened
The Pradhan Mantri Jan Dhan Yojana has so far managed to bring over Rs 5,000 crore into the formal banking system, as close to seven
crore account holders have started depositing cash into their bank accounts. A large part of this money was hitherto kept at home, with little
or no productive use.
Latest data collated by the finance ministry showed that on November 3, 6.98 crore bank accounts had been opened across the country, with
Rs 5,300 crore parked in them. Just a tad under 4 crore RuPay cards had been issued to these account holders, with the remaining
expected to get the ATM card over the next few weeks, officials said.
At the current pace, it's a matter of days before bank employees help the government scale the target of opening 7.5 crore bank accounts
under the financial inclusion scheme launched on August 29. The government was looking to achieve the target before January 26, 2015,
well ahead of the earlier schedule of August 15, 2015. But with the target within reach, the finance ministry is now looking at doubling the
target to open 15 crore accounts, said an official.
While banks have been ahead of the curve in opening bank accounts, the run rate for deposit accumulation has started picking up now. At
current levels, each Jan Dhan account has a balance of around Rs 750. Initially, the average balance in each account was around Rs 500.
Historically financial inclusion accounts have been low value accounts for public sector banks with balances of less than Rs 1,000. For
banks, experts said, the challenge is to ensure that the accounts remain active and account holders keep depositing funds as low account
balance have in the past deterred bankers from pushing financial inclusion.
This time, however, the government is hoping that cash transfer into the accounts will ensure that transactions take place and sufficient
balance is maintained. With the finance ministry also proposing overdraft facility based on the financial history of an account holders, there is
an added attraction to maintain a healthy balance.
A recent report by Boston Consulting Group, Ficci and the Indian Banks' Association had pointed out that among the 16 crore no-frills
accounts opened before Jan Dhan's launch, only a quarter had a single transaction last year. Similarly, a quarter actually had a balance. "In
effect, five years of effort has led to about 20% addition to active savings bank accounts in the nation," said the report, released in
September.
Chandra Shekhar Ghosh, CMD of micro finance institution Bandhan Financial Services, which recently got RBI permission to set up a bank
network, told TOI on Tuesday that the challenge for banks is to deliver services at the doorstep. "The Jan Dhan Yojana is a very good
initiative to open the accounts but how banks design the products and services and bring it to the doorstep that is the issue. You need to
inculcate the habit of banking with those customers," he said.
Labels: Jan Dhan Yojana, Jan Dhan Yojana scheme, PMJDY, Pradhan Mantri Jan Dhan Yojana, rupay card, rupay news, rupaycard
Three-fourths of Jan-Dhan accounts hold zero deposits

Even as banks race to open up accounts under the Pradhan Mantri Jan-Dhan Yojana, only a quarter of the accounts opened till date have
any cash deposited in them.
Official data reveals that of the 6.99 crore bank accounts opened till November 4, 75 per cent or 5.29 crore accounts have zero balance. The
data also reveals that it is two non-BJP states Uttar Pradesh and West Bengal where the maximum number of bank accounts have
been opened under the scheme.
However, 1.69 crore accounts under the scheme have managed to bring in Rs 5,294.10 crore of household savings into the formal banking
channels. Back of the envelope calculations show that on an average each of the accounts have deposited Rs 3,100.
Officials, however, argue that opening of bank accounts is more important and savings will pick up gradually. A bank account will help
inculcate the habit of saving, said an official. The Jan-Dhan Yojana was launched by Prime Minister Narendra Modi on August 28 with the
goal of eradicating financial untouchability of the poor by opening at least one bank account for every family in the country in less than six
months.
At the time banks had been given a target of opening 7.5 crore accounts under the scheme. Each of the accounts come with a debit card, Rs
1 lakh accidental insurance policy and Rs 30,000 free medical insurance cover for those who enroll before January 26. Depending on the
performance of the accounts in the first six months, banks will later extend a Rs 5,000 overdraft facility to one account per household.
While Samajwadi Party led-Uttar Pradesh has opened 1.16 crore bank accounts under the scheme, Trinamool Congress-governed West
Bengal has opened 49.54 lakh bank accounts. BJP-led Rajasthan and Madhya Pradesh have opened 46.3 lakh and 45.82 lakh accounts,
respectively, under the scheme till October 29, 2014. The finance ministry, which has been keeping an eye on the progress of the scheme is
hopeful that it will meet the target for account opening this fiscal. The data reveals that of the 6.99 crore accounts opened, 3.69 crore RuPay
debit cards have also been issued while 2.15 crore accounts have been seeded with Aadhaar numbers.
However, experts say that for the scheme to be truly successful, banks need to provide doorstep services. Bankers need to understand that
if they want to really do financial inclusion, accounts have to be active they need to provide doorstep banking along with overdraft facility
from day one so that the holder can easily access the services, said Chetna Vijay Sinha, chairperson, Mann Deshi Bank Organisation that
runs a regulated cooperative bank for women.
Labels: Jan Dhan Yojana, Jan Dhan Yojana scheme, Pradhan Mantri Jan Dhan Yojana, rupay card, rupay card news, rupay news
Friday, October 31, 2014
Get account holders under Jan Dhan to use RuPay card, FinMin tells banks
To get customers opening accounts under the Pradhan Mantri Jan Dhan Yojana to use their RuPay debit cards, the Finance Ministry is
believed to have asked banks to take a carrot-and-stick approach.
So, to remain eligible for the 1 lakh accident insurance cover that comes with the Basic Savings Bank Deposit Account (BSBDA), the cards
may have to be used at least once in 45 days.
At a recent meeting, Finance Ministry mandarins told top bankers that mere issuance of cards will not suffice. The cards have to be activated
at the earliest and made operational.
Ministry officials said that customers have to be advised to operate the cards at a certain time interval, say, once in 45 days, in order to
continue to enjoy the accident insurance cover without any charge to them.
Banks were also advised to have an SMS alert system for BSBDA beneficiaries so that they use the RuPay card once in 45 days and
remain eligible for the accident insurance cover, said a senior official of the Union Bank of India.
RuPay is the home-grown card payment scheme launched by the National Payments Corporation of India (NPCI) to rival global payment
processing giants Visa and MasterCard.
It has been conceived to offer a domestic, open-loop, multilateral system which will allow all Indian banks and financial institutions to
participate in electronic payments.
This card is accepted at all ATMs (for cash withdrawal) and at most of the PoS machines (for making cashless payment for purchases) in the
country.
A Basic Savings Bank Deposit Account or no-frills account does not have any minimum balance requirement. The services available for
such accountholders include deposit and withdrawal of cash at bank branches as well as ATMs; receipt/credit of money through electronic
payment channels or by means of deposit/collection of cheques drawn by Central/State Government agencies and departments.
While there is no limit to the number of deposits that can be made in a month, accountholders will be allowed a maximum of four withdrawals
in a month, including ATM withdrawals; and comes with the facility of ATM card or ATM-cum-debit card.
The Pradhan Mantri Jan Dhan Yojana (PMJDY), which was launched on August 28 by Prime Minister Narendra Modi, is a National Mission
for Financial Inclusion.
Financial inclusion is the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable
groups such as weaker sections and low-income groups at affordable cost
The Yojana seeks to ensure access to financial services namely, banking/savings and deposit accounts, remittance, credit, insurance and
pension in an affordable manner.
Banks have been set a collective first target of reaching 7.5 crore unbanked families under the PMJDY by January 26, 2015.
Labels: Jan Dhan Yojana, PMJDY, Pradhan Mantri Jan Dhan Yojana, rupay card, rupay card news,RuPay debit card, rupay news
Sunday, October 26, 2014
We expect credit growth to pick up by end of third quarter: Bank of India MD

Vijayalakshmi Iyer
Bank of India is planning to set up a subsidiary dedicated to social work, a first among its domestic peers. Amid increasing competition, the
public sector lender is trying to consolidate the credit portfolio, cut expenses and focus on fee and treasury income to stay profitable. The
bank is focusing on bringing down stressed assets by strict monitoring and faster resolution of cases. Vijayalakshmi Iyer, chairperson &
managing director, tells Manju AB how she is steering the bank out of its bad debt problem by personally attending to large accounts.
Excerpts from the interview:
What is driving business at Bank of India? With credit growth being at a decade low, how will banks beat the trend and still stay
profitable?
The growth has been very low in tune with the industry trend post March 2014. This actually provided an opportunity to consolidate credit
portfolio and to put more resources for monitoring mechanism. These efforts will result in lower credit cost and will improve profitability. With
more focus on timely resolution of stressed assets, the profitability will, in fact, improve.
When do you expect corporate credit to pick up? And which sectors do you see reviving faster than others?
There has been slowdown in corporate credit demand. Many steps are being taken by the government to enable economic growth to
assume faster pace. With pro-growth environment being created, we expect credit growth to pick up by the end of third quarter of the current
fiscal. We expect pick-up in SME sector to lead.
How is the retail credit growth?
Notwithstanding lower corporate demand for credit, the retail sector continues to grow resulting in better balancing of portfolio. Focus on
agriculture, retail and MSME is driving the business. Widespread geographical spread of branches is helping us growing in these sectors.
During the first half of this fiscal, schematic retail loan has grown 12.21% from Rs 21,982 crore as on March 31, to Rs 24,665 crore as on
September 30. The growth is 28 % year on year (Rs 19,284 crore to Rs 24,665 crore). Home loan growth has been 31% on a year-on-year
basis (Rs 11,400 crore to Rs 14,913 crore). Home loan and LAP constitutes 74% of schematic retail loans as on September 30, 2014 (home
loan Rs 14,913 & LAP Rs 3,424 crore). Total retail loans (personal loan segment) of the bank stood at Rs 29,654 crore as on September 30,
2014. Considering the growth pattern in the earlier years, we expect about 40% growth in retail loans during 2014-15.
What will be the key driver of your profits during the current quarter?
The deposit rates have softened in the absence of demand for credit. This will help in achieving lower cost of fund and better "NIM' (net
interest margin). Initiatives have been taken to curtail operational expenses as well as to increase non-interest income. All out efforts are
being made to achieve lower credit cost by improving monitoring process and also by achieving speedier resolution of non-performing
assets. There are two major sources of fee income, in addition to general banking services including remittances, etc. That is (1) business
related to credit portfolio and (2) fixed income portfolio. Given the softening of yields on fixed rate bonds, we do expect gains on that account
to contribute to our profits.
How are your deposits growing? Any specific campaigns to mobilise CASA (current account savings account)?
It is desirable to match growth in deposits to growth in credit business. Given that demand for credit has been muted, the deposit portfolio is
registering slower growth in keeping with opportunities for deployment. We are placing thrust on CASA business and special drives are being
arranged across the country to expand the customer base further. Technology related initiatives are being implemented to make banking
more customer friendly. The government business is also being expanded with a view to increase CASA portfolio.
How is the joint lending forum (JLF) helping the bank combat the rise in bad loans? Is the JLF being implemented in all
earnestness with co-operation from all banks?
Joint Lending Forum (JLF) has been helping the banking system in early resolution of stressed accounts as RBI guidelines warrants time
bound rectification process by all banks if majority of banks (75% in value and 60% in numbers) agree for any of the three options available,
that is rectification, restructuring or recovery. The implementation of corrective action plan under JLF route has almost stabilised barring
addressing of few issues like short period available for implementation of restructuring under CDR
on-CDR route.
Asset reconstruction companies (ARCs) say banks need to give bigger discounts for sales to happen. What has been your
experience?
In fact, the role of ARCs is very important in faster resolution of stressed assets. We feel that ARCs need more capitalisation to meet the
revised norms of payment of cash up-front of 15%. Admittedly, with higher cash up-front, the ARCs will have more commitment, which will
lead to even faster resolution. Bigger discounts on sales will force banks to have bigger hit to their P&L.
Now social media networks like Facebook and Twitter are attempting at money transfers, printing cheque books, etc. Is there any
threat to traditional banking from these alternate channels?
There is no question of threat. Innovations in technology are always welcome as they help in achieving higher level of efficiency in providing
banking services. It is desirable to remain aligned with evolving technology. We have focus on IT enabled services to ensure that our
customers have access to state-of-the-art technology. We were the first PSU bank to introduce first ATM long back in the country. Recently,
we introduced cash remittance through ATM to non customers without use of ATM card. It has received good response. Most of our ATMs are
now enabled to provide this service of Instant Money Transfer (IMT).
Banks are planning to sell off their non-core assets to streamline the organisation What would be your non-core assets that you
might put on the block?
We do have strategic investments and keep reviewing the same from time to time. It is always desirable to realise gains on such investments
to augment capital. It is a continuous process.
You had plans of setting up a wholly owned subsidiary for corporate social responsibility. What has been the progress of that?
With a view to have consistent approach for achieving our corporate social responsibility objectives, we have proposed formation of a trust.
We have approached appropriate authorities for approvals. We are expecting approvals soon.
Will you have to raise money for Basel III compliance? Will you give some details on the fundraising plans of the bank?
We need to strengthen our capital structure to ensure consistent growth while maintain the desirable levels of capital adequacy. This is a
continuous process. We are observing capital market developments very closely and have plans to raise capital at an appropriate time.
Finally, how is Jan Dhan scheme faring and how much of deposits in these accounts if at all have you collected?
Our bank has opened 28.82 lakh accounts from August 16 to October 16 under Jan Dhan scheme and collected Rs 70.07 crore deposits.
The scheme is in full swing by means of carrying out household surveys in all the allotted Sub Service Areas (SSA) and wards which is
expected to be completed by October 31.Number of RuPay Cards issued by our Bank so far is 17.94 lakh. The backlog is expected to be
cleared by November 15. Aadhaar seeding and opening of accounts through e-KYC is picking up and we have seeded 23.48 lakh accounts
and opened 11,716 accounts through e-KYC so far.
Have you also rolled out Swachh Bharat campaign?
In this national endeavour, BOI has committed Rs 4 crore for construction of toilets in government schools. The project will cover 85 girls
secondary schools in Jharkhand. List of schools and districts covered in the state has already been conveyed to finance ministry, and
ministry of HRD. Implementation will be done through local agencies in coordination with BOI zonal offices situated in Jharkhand.
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August 28, 2014
TPDDL organises camps for opening of bank

accounts under Pradhanmantri Jan Dhan Yojana
Four day long initiative (August 25-28) launched in association with Axis Bank, PNB and HDFC Bank
Initiative targeted JJ Clusters residents without bank accounts in North and NorthWest Delhi
More than 2223 bank accounts opened during the four day period
TPDDL organises camps for opening of bank accounts under

Pradhanmantri Jan Dhan Yojana
New Delhi: With a view that an extension of banking services is a must for the economic development of
the country, Tata Power Delhi Distribution (TPDDL) has extended support to the Prime Ministersrecently
announced Pradhanmantri Jan Dhan Yojana. The scheme aims at financial inclusion of people left out from
the mainstream of the financial system and promotes a minimum of two bank accounts per family.
Presently, a major chunk of the Indian population does not have a bank account. TPDDL is of the view that the lack of financial
inclusion means that a significant amount of household savings stays away from the banking channel, not only harming individuals, but
also adversely affecting the countrys economy. With an extension of banking services to even the last person in the queue, all would be
able to keep their money safe and earn interest on the savings and at the same time the larger availability of funds with the banks would
imply lower interest rate which is critical for the economic growth of the country.
To achieve the goal, TPDDL joined hands with leading banks Axis Bank, PNB and HDFC Bank. Together with the banks, TPDDL
organized 19 camps in JJ Clusters of North and North West Delhi from August 25 to 28, 2014, and facilitated the opening of accounts for
2223 consumers in the leading banks.
The areas covered under the initiative were BG Block, Shalimar Bagh; Wazirpur Industrial Area, Bagkare Khan, near Vivekanand Puri
and Sarai Rohilla, Indra JJ Colony, Rohini Sec-3, Furniture Block, Kirti Nagar, Shakurpur, near HP Petrol Pump, Netaji Subhash Place,
Haiderpur Village; Farishta Soap Shahazada Bagh; B & C Block, Ambedkar Bhawan, Wazirpur; Kathputli Colony, Sawana Park, GP
Block Pitampura; JJ Colony, Bawana, Metro Vihar, Phase 2; Om Nagar and Dhobi Ghat, Jawahar Camp, Kala Pahar, Daya Basti/Sarai
Basti, Shaktinagar, etc.
For opening of bank accounts, the electricity bills of TPDDL were accepted as a valid address proof. All banks accounts opened under
the scheme were zero balance accounts and provide facilities like debit card, cheque book and an accidental insurance to the tune of Rs
1 lakh per family.
Commenting on the initiative, Mr. Praveer Sinha, CEO and ED, TPDDL, said, "We, as an integral part of the Tata Group have always
supported the Government in its landmark initiatives. Pradhanmantri Jan Dhan Yojana is an ambitious programme which aims to extend
banking services to all the citizens of the country and we are going to extend all our support to the initiative as it is critical to include
every family in the financial domain for the economic growth of the country. I thank, Axis Bank, PNB and HDFC Bank for partnering
with us."
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USIBC Welcomes Finance Minister Arun Jaitleys
First Full-Year Union Budget as a Bold Roadmap
for Improving the Ease of Doing Business in India
Category: Business & Finance

Published: Wednesday, 04 March 2015 01:22
The U.S.-India Business Council (USIBC) welcomes Finance Minister Arun Jaitleys Union Budget as a bold roadmap
for improving the ease of doing business in India. The Council strongly supports many reforms announced in the
budget targeted to encourage infrastructure development, modernize capital markets, reduce tax uncertainty, and
spur domestic economic growth. We applaud Finance Minister Jaitley for today's ambitious reform agenda and
welcome concrete policies that demonstrate the Government of India's commitment to a new era of growth,
said Dr. Mukesh Aghi, President of USIBC. U.S. companies stand ready to partner with the Government of
India on priority initiatives including Smart Cities, Make in India, Jan Dhan Yojana National Financial Inclusion
Mission, Clean India, and Digital India. This Budget provides us positive steps forward in strengthening this
partnership." USIBC supports the commitment by the Government of India to expeditiously implement a Goods
and Services Tax (GST) regime by April 2016. Once implemented, the GST will dramatically increase government
revenue while streamlining operational and cost planning for businesses and could increase Indias GDP growth rate
by 1-2% by establishing a free-trade zone within its own borders. A delay in implementation of the General AntiAvoidance Rules (GAAR) is a welcome move which will allow time for critical business planning. Reduction in the
corporate tax rate and a more clear direct tax regime - both key announcements of this budget - will rejuvenate
the investment outlook and increase predictability. Furthermore, USIBC applauds the Finance Minister's focus on
infrastructure, including rejuvenation of public-private partnerships, the announcement of a National Infrastructure
Investment Fund to provide public capital in support of increased private investment in infrastructure, and steps
toward bankruptcy reform which will unlock liquidity in stalled projects. USIBC will continue to provide support in
expediting the transformation of Ajmer, Allahabad, and Vizag into smart cities with American technology, capital,
and expertise in the months and years ahead. Moreover, the industry body commends the Government of India on
allowing foreign investment in Alternate Investment Funds as well as important steps toward developing a more
robust pension system providing financial stability for all Indians. USIBC supports Finance Minister Jaitley's
assertion that a "quantum jump" forward is the change needed to kickstart India's next era of growth. Formed in
1975 at the request of the U.S. and Indian governments, the U.S.-India Business Council (USIBC) is the premier
business advocacy organization advancing U.S.-India commercial ties. Today, USIBC is the largest bilateral trade
association in the United States, with liaison presence in New York, Silicon Valley, and New Delhi, comprised of 325
of the top-tier U.S. and Indian companies.
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PM Modi Congratulates Bankers on

Success of 'Jan Dhan Yojana'
NDTV | Updated On: January 24, 2015 15:23 (IST)
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Prime Minister Narendra Modi on Saturday sent an email to bankers, congratulating them on the success of the
'Pradhan Mantri Jan Dhan Yojana. '
"It gives me great pleasure to have seen the exceptional work done by you all in ensuring the success of the Pradhan
Mantri Jan Dhan Yojana," the Prime Minister wrote.
Announced by the Prime Minister during his Independence Day speech, the scheme is a national mission to bring
every household under the financial radar.
The scheme was launched on August 28, 2014, with a target of covering 7.5 crore households till January 26.
"The target set for opening bank accounts for all households has been surpassed well ahead of the target. By
opening 11.5 crore new accounts in a very short span, we have achieved a coverage of 99.74 per cent of all
households in the country. I congratulate you for your extraordinary efforts," the mail said.
However, the Prime Minister also asked bankers speed up this process and redouble efforts on financial literacy and
said that all 'Jan Dhan' bank accounts should be linked to 'Aadhaar'.
"We need to redouble efforts on financial literacy. Aadhaar seeding needs to improve further. Bank Mitras need to be
enabled to carry out RuPay card and Aadhaar enabled transactions in villages itself," he told the bankers.
"I want you to work to ensure that each account holder enrolls for Aadhaar and seeds it in the bank account. This
needs to be done for all accounts. I am sure you will do this seeding with the same zeal you showed in driving bank
account opening," he added.
Noting that "well begun is half done", PM Modi laid out a roadmap for the future as he said the 'Jan Dhan Yojana'
provides a platform for changing the economic condition of the people.
"We need to build on this success and leverage these accounts to provide our citizens a wide range of credit,
insurance and pension services. We also need to maintain high standards of customer service. This is the next phase
of Pradhan Mantri Jan Dhan Yojana," he said.
Underlining that most development activities are hindered by the single disability of not having bank accounts, he
said, "We have now overcome this disability. Benefits have already started flowing to people through some of the
Direct Benefit Transfer schemes. This not only ensures that benefits reach people directly, but also utilises your
accounts well."
In words of encouragement to the bankers, he said, "You will recall that when we started this mission, many had
doubts about our ability to achieve this task in a limited time span of five months.
"However, you have proved sceptics wrong and achieved what appeared impossible. This feat alone should motivate
you, as well as others to work to make our dreams a reality."
He said this was their great contribution to nation- building and thanked them for being a part of this huge national
mission through which "we shall be able to help every citizen of India achieve a better quality of life."
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Pradhanmantri Jan-Dhan Yojana

Bank accounts of over 14 lakh unorganized labourers to be opened
Published by cg-04.com on Mon, 09/08/2014 - 13:05
Saving accounts of more than 14 lakh labourers of unorganized sector will be opened in various banks under Pradhan Mantri JanDhan Yojana. Various departments of the state government will work with mutual coordination for identification and rehabilitation of
child labourers and to provide them education facilities. Grade-III Field-level Officers of all the development-related departments will
be given powers of Labour Inspector for identification of child labourers.
Source:
Read more
Pradhan Mantri Jan-Dhan Yojana will prove to be a milestone: Shri Vishnudev Sai
Published by cg-04.com on Fri, 08/29/2014 - 12:21
Union Minister of State for Minerals, Steel and Labour Shri Vishnudev Sai today inaugurated the Pradhan Mantri Jan-Dhan Yojana in a
function organized at new circuit house in capital city Raipur. In his address to the function, Minister Sai said that the scheme
announced by Shri Narendra Modi is a beneficial scheme for crores of poor people in the country. Pradhan Mantri Jan-Dhan scheme
will prove to be a milestone of socio-economic development for poor families of the cities and villages, which lack proper banking
facilities.
Source:
Raipur
14th of September 2014 10:55:22 AM GMT
aking tablet solutions for Jan Dhan Yojana
California-based chipmaker Intel is working in India on certain solutions centred around tablets that
offer a new set of functionality and ease of basic banking at doorstep, which in turn could facilitate the Pradhan Mantri Jan
ojana (PMJDY) that aims at financial inclusion.
ve Intel Architecture-based solutions centred around tablets that offer a new set of functionality and ease of basic banking at
ep. By empowering the business correspondents with tablets it helps to increase productivity and ease of use for them,"
s Tadigadapa, director, enterprise solution sales, Intel South Asia, told IANS in an interview.
tly in urban areas tab banking has caught on. "Taking tab banking to the rural areas allows for a bigger and easier financial
ent a few public as well as private sector banks are trying to implement the IA-based solutions in India.
ntly we are working with ISVs (independent software vendors) and have already rolled out solutions for financial inclusion
ncludes tightened security features that runs on IA," Tadigadapa said.
MJDY scheme was flagged off Aug 28 by Prime Minister Narendra Modi. Till Sep 8, 30.2 million accounts have been opened of
18.9 million are in rural areas and 11. 3 million in urban areas. Banks have collected deposits of Rs.1,496.51 crore under the
e so far, says a finance ministry statement.
about technology consumption in India, Tadigadapa said: "It's growing in double digits, 20 percent or so in overall devices."
of consumption is happening. Overall in India it is growing much faster in the hinterland. In South Asia each country has its
ttern and no country has the size that India has, in terms of diversity," he added.
d devices penetration will provide the necessary impetus to digital literacy drive in the country. "It's increasing rapidly and that
he aim to turn the country into a digitally empowered society and knowledge economy, the government has envisaged Rs.1
will be a lot of first time users in the rural India who have not seen technology but now they can see the benefits of
ong with The National Association of Software and Services Companies (NASSCOM) had launched the National Digital Literacy
n (NDLM) in August 2012 bringing together several players from the ecosystem on the same platform to work towards a
on goal of accelerating digital literacy in India.
ve trained two million people in two years in digital literacy and a majority are in the rural areas," Tadigadapa said.
ing the purchasing capacity of devices by the people in the hinterland, he said: "Affordability is not much of an issue. Devices
ailable at various prices. Tablets at around $100 are also available in India."
will be one of the top three markets in terms of devices very soon due to sheer amount of population. India is among the top
h India has excelled in software services, presence of hardware manufacturing is zilch in the country. "We strongly feel that
nment has to be created. We do strongly believe in a robust domestic ecosystem for the hardware including the manufacturing.
speak with the government and share our experience of working with other countries," he said.
we have more hardware manufacturing there will be more efficiency in the cost structure. It will also provide the much needed
jita Gupta can be contacted at aparajita.g@ians.in)
Se
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Jan Dhan Yojna to connect poor with banks

August 15, 2014 4:11 amViews: 127
Prime Minister Narendra Modi on Friday launched Pradhan

Mantri Jan Dhan Yojana to help the poor open bank accounts which will come with the facility of a debit card and an
insurance cover of Rs. 1 lakh, reports The Hindu.
We want to integrate the poorest of the poor with bank accounts with Pradhan Mantri Jan Dhan Yojana, he said in
his maiden Independence Day address to the nation.
Observing that people have mobile phones but not bank accounts, Mr. Modi said, the scheme will help in bringing
the benefits of formal banking system to them.
Today there are crores of families which have mobile phones but no bank accounts. We have to change this. The
economic development must benefit poor and it should start from here, he said.
Under the Jan Dhan Yojana, he said, the person who will open bank account will get a debit card and the family will
get Rs. 1 lakh insurance cover. This will help the family to tide over the unforeseen eventuality.
The Union Cabinet has already cleared the two-phase financial inclusion scheme under which bank accounts will be
opened for 15 crore poor persons with an overdraft facility of Rs 5,000 and accident insurance of Rs. 1 lakh.
The scheme, to be pushed by the government in a mission mode, seeks to provide two accounts to 7.5 crore
identified households by August 2018.
The main features of the scheme include Rs. 5,000 overdraft facility for Aadharlinked accounts, Ru Pay Debit Card
with inbuilt Rs. 1 lakh accident insurance cover and minimum monthly renumeration of Rs. 5,000 to business
correspondents who will provide the last link between the account holders and the bank.
Download the information brochure and account opening form to get benefits of Prime Minister Jan
Dhan Yojna here
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RBI says overdraft under Jan-Dhan is

priority sector lending
25 Feb 2015, 18:55Jagran Post News Desk Jagran Post Editorial
| Last Updated: 25 Feb 2015, 19:28
Mumbai: Giving a big boost to Pradhan Mantri Jan-Dhan Yojana (PMJDY), the RBI on Wednesday said bank
overdrafts of up to Rs 5,000 in accounts opened under this financial inclusion mission will be treated as
priority sector lending.
Representational picture
"...overdrafts extended by banks up to Rs 5,000 in PMJDY accounts will be eligible for lassification under
priority sector advances ('others' category) as also weaker sections, provided the borrowers household
annual income does not exceed Rs 60,000 for rural areas and Rs 1,20,000 for non-rural
areas," the Reserve Bank of India (RBI said in a notification).
Under PMJDY, the overdraft facility is permitted to Aadhaar-enabled accounts after "satisfactory operation" of
accounts for six months.
Last August, Prime Minister Narendra Modi had launched the scheme to provide all households across the
country access to banking facilities.
As on January 31, more than 12.54 crore accounts were opened the scheme. Under priority sector lending,
RBI ask banks to provide a specified portion of loans to few specific sectors.
Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the
absence of the special dispensation.
As per the RBI, these are small value loans to farmers for agriculture and allied activities, micro and small
enterprises, poor people for housing, students for education and other low income groups and weaker
sections.
Jan Dhan needs financial literacy for success: ASSOCHAM
Alka Sirohi
03 October, 2014
5.0/5
1
2
3
4
5
Jan Dhan scheme of opening banking accounts for all households also needs to be backed up with training of
account holders to enable them to benefit from the overdraft of Rs 5,000 to each account envisaged in the scheme,
a panel of banking experts has suggested.
There should also be a parallel training of banking staff posted for Jan Dhan accounts handling and reorientation of
their attitudes to account holders from the low income groups.
"Instead of treating them as a mere number among many such numbered accounts, the banking staff should
develop relationship with them to guide them to use the accounts for setting up micro enterprises. Their orientation
has to change," said former Chairman and Managing Director of Punjaband Sindh Bank, K.S. Bains IAS.
In Focus
Bains was participating in the panel discussion that was part of the ASSOCHAM 10th Annual Banking Summit here
on Tuesday. Other participants included Indian Oversees Bank's former CMD Narendra who moderated the
proceedings, associate director of E&Y Rajendra Rele, senior vice-president and head of corporate affairs of SREI
Raman Aggarwal and senior director off CRISIL Risk Solutions Manish Jaiswal.
"Think of the Jan-Dhan accounts as Priority Banking and orient your relationship with them," said Bains who had driven such lending to low
income groups advised the audience from the banking industry.
He quoted his experience at Punjab and Sindh Bank when a lady from the rural area asked for a loan to start a beauty parlour in her area and
justified her claim by pointing out how the cultural change in rural areas was creating clients for beauty treatments. After the loan was sanctioned
on his intervention, the business flourished as clients who had earlier.
The former banker also suggested special bank branches for promoting micro enterprises in urban slums and reorientation of account holders
from such urban slums as well as from the rural areas. Most of the account holders would not know what to do with the banking facility and the
overdraft of Rs 5000 should be encouraged for specific micro enterprises. Government and banking industry must fund such reorientation.
For the success of the Jan-Dhan Yojana, banks must lay down to their staff that "unless you are posted there, you will not be promoted," said
Bains insisted.
The banks that were pushing for getting low income households to open banking accounts under Jan-Dhan Yojana could fruitfully utilize the large
number of non-banking financial companies (NBFCs) that have considerable experience in lending to small and medium enterprises, for making
these accounts active all the time. Otherwise there was danger of as much as 70 per cent of the accounts lapsing into inactivity after opening,
Raman Aggarwal pointed out.
Pointing out that banks were already in the mood for serving rural areas, Mr. Narendra who is also the chairman of ASSOCHAM National
Council for Banking and Finance, revealed that last year 7,000 branches were opened in rural areas. Mobile banking was also catching up in these
areas.
The presence of differentiated banking like small banks and pay banks as well as the banking correspondents would be a parallel vehicle for the
inclusion of unreached areas and households. He suggested the overdraft of Rs 5000 per account under the Jan-Dhan Yojana to be used as "seed
money" for orienting account holders for going for micro enterprises.
Financial inclusion should be integrated with skill development, make in India, and other entrepreneurial activity and should be treated as
opportunity for participation in economic development, according to Rajendra Rele (E&Y).
Participants in Jan Dhan Yojana should be made to understand it as a means to grow more money for them, according to Mamish Jaiswal
(CRISIL). He pointed out how collateral free, movable finance was just nine per cent of financing in India while it was as high as 60 per cent in
China and 32 per cent inMalaysia.
That revealed the vast opportunity in this area and the new scheme should be utilized to raise the ratio of this type of lending. Among others he
also suggested creating of a collateral management company to speed up lending to potential small and micro enterprises.
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Wednesday, January 21, 2015 14:17 Hrs IST
MID-SESSION
BSE Small-Cap, Mid-Cap indices in red

Intraday volatility continued as key benchmark indices
once again pared gains in mid-afternoon trade. The
broad market depicted weakness. The market breadth
indicating the overall health of the market turned weak.
The BSE Mid-Cap and Small-Cap indices were both in
the red. Shares of index heavyweight and cigarette
major ITC extended losses after the company reported a
muted sales growth in its main cigarettes business. The
barometer index, the S&P BSE Sensex, was currently
was up 47.06 points or 0.16% at 28,831.73. Sugar
stocks were in demand.
Earlier, the Sensex and the 50-unit CNX Nifty, had, both
surged to record high in morning trade as these key
benchmark indices extended initial gains.
Other Stories
Bank stocks edge lower (5-
Mar 14:12 Hrs IST)

Bosch gains after inclusion in
FTSE's Asia Pacific ex-Japan

index (5-Mar 13:21 Hrs IST)
Key indices slip into the red
from green (5-Mar 12:11 Hrs IST)

Key indices retain positive
zone (5-Mar 11:08 Hrs IST)

PSU OMCs edge higher (5-
Mar 10:10 Hrs IST)

Key indices edge higher in
early trade (5-Mar 09:13 Hrs IST)

HDFC hits record high (4-
Mar 14:09 Hrs IST)

Sun Pharma, Ranbaxy vault (4-
Foreign portfolio investors (FPIs) bought shares worth a Mar 13:13 Hrs IST)
net Rs 1275.59 crore yesterday, 20 January 2015, as per
Market breadth turns negative
provisional data.
from positive (4-Mar 12:17 Hrs
IST)
In the foreign exchange market, the rupee edged higher

against the dollar on optimism demand for local assets
will increase as plunging oil prices improve India's
economic outlook.
Telecom stocks advance as
spectrum auction begins (4Mar 11:10 Hrs IST)

Next
Finance Minister Arun Jaitley yesterday, 20 January

2015, said that the success of the Pradhan Mantri Jan
Dhan Yojana (PMJDY) is a game changer for the
economy as it has provided the platform for direct
benefits transfer (DBT) which, in turn, will help in
plugging leakages in subsidies and thereby provide
savings to the exchequer.
Brent crude futures edged higher amid signs that prices
are receiving support around current levels.
In overseas markets, European shares reversed their
initial gains. Chinese shares led gains in Asian stocks.
US stocks eked out small gains yesterday, 20 January
2015, after seeing high intraday volatility.
At 14:16 IST, the S&P BSE Sensex was up 47.06 points
or 0.16% at 28,831.73. The index jumped 173.43 points
at the day's high of 28,958.10 in morning trade, a lifetime
high for the index. The index rose 7.90 points at the
day's low of 28,792.57 in mid-morning trade.
The CNX Nifty was up 16.20 points or 0.19% at
8,711.80. The index hit a high of 8,741.85 in intraday
trade, a lifetime high for the index. The index hit a low of
8,689.60 in intraday trade so far.
The BSE Mid-Cap index was off 50.26 points or 0.47%
at 10,677.55. The BSE Small-Cap index was off 43.92
points or 0.38% at 11,402.35. Both these indices
underperformed the Sensex.
The market breadth indicating the overall health of the
market was weak. On BSE, 1,744 shares declined and
1,095 shares advanced. A total of 110 shares were
unchanged.
Shares of index heavyweight and cigarette major ITC
dropped after the company reported a muted sales
growth in its main cigarette business. The stock was off

4.57% at Rs 354.25. The stock hit high of Rs 373.60 and
low of Rs 353.50 so far during the day. The company's
net profit rose 10.46% to Rs 2635 crore on 2.47% growth
in total income from operations (net) to Rs 8942.59 crore
in Q3 December 2014 over Q3 December 2013.
Segment wise results showed that sales of the cigarette
division rose 0.62% to Rs 4141.94 crore in Q3
December 2014 over Q3 December 2013. Sales of the
FMCG business jumped 11.37% to Rs 2314.12 crore in
Q3 December 2014 over Q3 December 2013. ITC
announced the third quarter results during market hours
today, 21 January 2015.
ITC's non-operational income jumped 48.82% to Rs
581.99 crore in Q3 December 2014 over Q3 December
2013. ITC's operating profit rose 5.47% to Rs 3464.20
crore in Q3 December 2014 over Q3 December 2013.
Operating profit margin (OPM) edged up to 38.73% in
Q3 December 2014, from 37.63% in Q3 December
2013.
Sugar stocks were in demand. Oudh Sugar Mills (up
5.44%), Rana Sugars (up 2.95%), Shree Renuka Sugar
(up 2.22%), Bajaj Hindusthan (up 2.11%), KCP Sugar &
Industries (up 1.50%), Dhampur Sugar (up 1.50%),
Simbhaoli Sugars (up 0.98%), Sakthi Sugars (up 0.90%),
Dwarikesh Sugar (up 0.82%), Balrampur Chini Mills (up
0.65%), Triveni Engineering Industries (up 0.41%) and
EID Parry (India) (up 0.11%), edged higher.
In the foreign exchange market, the rupee edged higher
against the dollar on optimism demand for local assets
will increase as plunging oil prices improve India's
economic outlook. The partially convertible rupee was
hovering at 61.6175, compared with its close of 61.70
during the previous trading session.
Brent crude futures edged higher amid signs that prices
are receiving support around current levels. Brent for
March settlement was up 51 cents at $48.50 a barrel.
The contract declined 85 cents, or 1.74%, to settle at
$47.99 a barrel during the previous trading session.
Finance Minister Arun Jaitley yesterday, 20 January
2015, said that the success of the Pradhan Mantri Jan
Dhan Yojana (PMJDY) is a game changer for the
economy as it has provided the platform for direct
benefits transfer (DBT) which, in turn, will help in

plugging leakages in subsidies and thereby provide
savings to the exchequer. As against the original target
of opening bank accounts for 7.5 crore uncovered
households in the country by 26 January 2015, banks
have already opened 11.50 crore accounts as on date 17
January 2015 under PMJDY after conducting survey of
21.02 crore households in the country. Jaitley further
said that so far 19 schemes out of 35 DBT schemes
have been rolled-out across the country, including
MGNREGS in 300 districts. The Finance Minister said
that the state governments have also been requested to
transfer cash/benefits directly in the bank accounts of
beneficiaries thereby cutting layers in the delivery
process.
Meanwhile, the Ministry of Commerce & Industry today,
21 January 2015, said that Vietnam's Deputy Prime
Minister Hoang Trung Hai while meeting an Indian
delegation to Vietnam led by Rajeev Kher, Secretary,
Ministry of Commerce, Government of India, has
expressed his pleasure at the blossoming of trade and
economic relations and his confidence that India and
Vietnam would be able to achieve the target of bilateral
trade of $15 billion by 2020. He noted that there is great
potential for trade and investment cooperation in textiles,
agriculture, pharmaceuticals, leather, energy and oil and
gas, and invited Indian companies to invest in Vietnam.
European stocks reversed their initial gains today, 21
January 2015. Key benchmark indices in France and
Germany were off 0.05% to 0.26%. In UK, the FTSE 100
index was up 0.65%.
The governing council of the European Central Bank
(ECB) is scheduled to undertake monetary policy review
tomorrow, 22 January 2015. The ECB may announce a
large-scale bond-buying program tomorrow, 22 January
2015, aimed at spurring Europe's ailing economy.
Meanwhile, uncertainties over the status of Greece
including its possible exit from the eurozone are likely to
persist until the early election in the country on 25
January 2015. Greece is set to hold snap elections on 25
January 2015 after it failed to elect a new president in a
third round of voting late last year. The Greek leftist
opposition party Syriza leads opinion polls ahead of
national elections on 25 January 2015. Syriza has
demanded debt relief from the eurozone and promised to

roll back the austerity and reform measures that the
country has undertaken in exchange for the international
bailout that the government negotiated in 2012.
Chinese shares led gains in Asian stocks today, 21
January 2015. Key benchmark indices in Indonesia,
South Korea, Singapore and Taiwan were up 0.15% to
0.95%. Japan's Nikkei Average fell 0.49%.
Mainland China's benchmark Shanghai Composite Index
shot up 4.7%, marking its biggest daily percentage
increase since October 2009, extending gains after 1.8%
advance yesterday, 20 January 2015. The advance in
mainland Chinese markets also boosted Hong Kong
stocks, with the Hang Seng Index closing up 1.7%.
China yesterday, 20 January 2015, reported a higherthan-expected economic growth for December.
In Japan, the Bank of Japan (BoJ) today, 21 January
2015, cut its near-term inflation outlook and left its key
easing policy unchanged, citing brighter economic
growth that could eventually help put prices back on a
firm upward path. The BoJ sharply raised its view on
growth adjusted for inflation, expecting gross domestic
product to rise 2.1% in fiscal 2015 and 1.6% the
following year. But it cut its forecast for the year ending
in March to a 0.5% contraction from the previous 0.5%
expansion.
Trading in US index futures indicated that the Dow could
fall 40 points at the opening bell today, 21 January 2015.
US stocks eked out small gains after high intraday
volatility yesterday, 20 January 2015. In economic news,
a gauge of confidence among home builders ticked
down this month by one point to 57, staying close to the
highest level since late 2005, according to National
Association of Home Builders/Wells Fargo data.
Readings above 50 signal that builders, generally, are
optimistic about sales trends.
Analysis
You are here:orfonline.org Publications Analysis
Financial inclusion is the key
Samir
16
January
Saran
2015
For the last two decades India has not only accepted but actually revelled in being labelled an "emerging
market". India felt pleased and privileged by this tag, which seemed to signify that it had somehow 'arrived'.
Strangely enough, the country's sense of pride came not from being an industrial powerhouse, financial centre,
or
innovation
capital.
It
was
perversely
derived
from
being
seen
as
a
'market'.
The problem is that markets fluctuate and can be a haven for merely temporary investments. As just a 'market',
India was consigned to remain the chosen destination for everything the rest of the world produced in excess.
Therein lay a deep disconnect consumption can only go hand in hand with production. Surely India could not
have hoped to emerge as a global power on the back of being a mere market, one that ran a trade deficit with
over
100
countries!
Aspirations
Clearly, India's self-image needed a re-boot. This rebooting of India's 1.3 billion aspirations was conducted by
the Prime Minister on the 15th of August last year. He did it with characteristic simplicity, by a simple call for
"Make in India". A call he hoped, would catalyse a seismic shift in India's image of itself.
The world has changed since the Financial Crisis. Economic growth cannot be taken for granted. According to
the IMF, global growth will continue to be under four per cent for some years. Even this nominal growth will not
come without innovation to increase productivity, enhance quality and cut costs. And importantly, the race to be
at the forefront of global innovation has intensified. India's economy and enterprises must be prepared to face
increasing global competition. "Make in India" must therefore attempt pushing Indian industry through global
competition into a tsunami of innovation. It must not be misappropriated for primitive protectionism or
misunderstood
to
imply
insular
industrialisation.
The "Make in India" initiative is at its core a 'call to arms' so that we as a country invest in our most precious
resource- our demography. In a few years India will have the world's largest workforce. It perhaps already is
the world's youngest workforce. Why must our youth be productive and innovative in Silicon Valley alone or help
create financial instruments in only London and New York? To rectify this, we must build the eco-systems and
conditions that can create the most productive, the most innovative army assembled in human memory; a
peaceful
army
of
wealth
creators
for
the
society
and
country.
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Consulate General of the United States Hyderabad, India

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India and the United States: Building Strong and Sustainable Economies for Our People: Remarks
by Ambassador Richard R. Verma at Indian Business School, Hyderabad
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India and the United States: Building Strong and Sustainable Economies for Our People:
Remarks by Ambassador Richard R. Verma at Indian Business School, Hyderabad
Hyderabad | February 23, 2015
(As prepared for delivery)

Dean Rangnekar, thank you for that kind introduction. Id like to begin by welcoming members of the
many business chambers with us here tonight: the American Chamber of Commerce, the
Confederation of Indian Industry, the Federation of Indian Chambers of Commerce and Industry
(FICCI), the Indo-American Chamber of Commerce (IACC), and the National Association of Software
and Services Companies (NASSCOM). Im happy to see that so many of you have taken time out of
your schedules to discuss this incredibly exciting moment in the economic relationship between India
and the United States, and to think about what we can do to make sure that the relationship is
working for all of our people.
Im also happy to see how many students are with us tonight as well since you are the ones who will
be leading this relationship in the years to come. Whether you are from the Indian School of Business,
the Narsee Monjee Institute of Management Studies, Aurora's Business School, or the Institute of
Management Technology, I know tonights event falls in the middle of the exam and job placement
season, and so despite the importance of the topic, Ill try to stay brief!
While all of these are excellent schools, I would like to pause for a minute to acknowledge the
accomplishments of tonights host institution. ISBs founding Dean, Dr. Pramath Sinha, happens to be
a good friend of mine, and I am simply in awe of how he and all of you managed to create a world
class business school in the space of only ten years. I was struck in looking through his book the other
day - the aptly titled An Idea Whose Time Has Come at how from the very conception of the school,
Dr. Sinha and his colleagues were determined to build a world-class institution that was also inclusive.
This beautiful campus could easily have become just a school for the well-off. The book describes the
founders early decision that ISBs admissions process would remain entirely based on merit, and they
stood their ground on the issue despite plenty of criticism from the skeptics. Now, with the help of a
robust loan and scholarship program, admission is entirely need-blind, and ISB is rated among the top
business schools in Asia. I cant think of any better settingone that so perfectly merges excellence
with opportunityfor the discussion we can have tonight.
These are exciting times for our two countries. I think the historians will look back on this period
and President Obamas recent visit in particular as a transformative time in our bilateral relationship.
If it seems like half of the Presidents cabinet was here, or will be here, thats about right. These highlevel visits reflect the excitement about our deepening friendship and the good path we are on
together. Tonight I want to talk about the economic relationship between our two countries, why it
matters, some areas where our partnership really has an impact, and some of the challenges that we
confront which prevent us from closer economic cooperation.
Common Purpose Shared Successes
In recent weeks, I have had the good fortune of traveling around India and I have been able to see
first-hand the renewed enthusiasm and confidence in the economy, the great potential for US/India
business collaboration, and the positive spin-off effects that are possible in both countries. Only a few
days ago, I was in Bangalore for the Aero India show and while it was an impressive display of
Indian military power, I was equally impressed with the number of US companies, from the very large
to the start-ups, that were already collaborating in India in the aerospace and defense sectors. I was
thrilled to see how much trade, joint research and collaboration, and development were taking place
among smaller and mid-sized companies too. During the Presidents visit, we were able to formally
announce four pathfinder projects and two working groups on aircraft carriers and jet engine
technology under the Defense Technology and Trade Initiative. Who would have believed such
cooperation was possible even a few years ago.
I also know that here in Hyderabad, US companies employ several hundred thousand workers, and are
involved in every sector of the economy. The joint ventures here, including the cutting-edge defense
projects, are well known. Would you have ever thought part of the U.S. Presidents helicopter would be
assembled here?
When I traveled to Gujarat recently, it was terrific to see first-hand a massive new Ford automotive
factory that will produce state of the art vehicles for Indian and the Asian markets, where hundreds
and eventually thousands of skilled workers will be employed. The facility gives Ford, an iconic US
company, a great platform in Asia, which is not only good for workers in Gujarat, but also for workers
in Detroit and beyond. Its same story with GE. In Pune with the Prime Minister just a few days ago, I
was able to tour their new advanced manufacturing facility, where four different product lines would be
operated from the same plant, and where 25% of the workforce would be women. As I learned from
the GE team, the innovation, research, and development will take place across borders so while the
manufactured part may be from the Pune plant its likely that engineers in Pittsburgh or elsewhere in
America helped contribute to the final design, its functionality, and its distribution. Thats how
modern manufacturing takes place.
But the economic relationship between our two countries is not just about large companies coming
here to build factories. Its about shared prosperity on all levels. When I was in Kolkata just three
weeks ago, I was able to meet with the American founders of Sari-Bari, a for-profit NGO that provides
good jobs, education, and training to women who were once part of the commercial sex trade, and
who were looking for a better life, a stable income, and good job. Sari-Bari just does that, taking used
saris and converting them into handbags, wall hangings, and other distinctive items. Theyve sold
goods to major European and American retailers for sale in their stores, theyve made a profit, and at
the same time, they have changed the lives of women who otherwise would not have had much hope.
Yes, you can do well by doing good.
Another compelling example involves the United StatesIndia Science & Technology Endowment
Fund , a public-private partnership that promotes innovation and entrepreneurship for the public good.
Some of the work that we see coming out of this partnership today is extremely impressive. To take
just one example, Rajasthans JaipurFoot Organization is the largest provider of prosthetic limbs in the
world. So, when some engineers at Stanford University thought they had found a way to reduce the
price of prosthetic knees from $15,000 and make them affordable to all those who need them, what
did they do? They brought their new design to the JaipurFoot Organization, which was able to bring
together the experience, technical expertise, and manufacturing capability to create a product that has
now been fit onto 6,238 people. Soon, as a result of this exciting collaboration, the price of a highperformance prosthetic knee, typically one of the most complicated and expensive prosthetics to
produce, will come down from $15,000 to less than $100.
Hundreds of Indian companies are also operating in the United States and have made significant social
impacts with their philanthropic initiatives and community engagements. To take just one example
from here in South India, Shri Govindaraja Textiles (SG Mills), is a third-generation, family-owned
business. In May 2014, Governor Pat McCrory of the U.S. state of North Carolina announced that SG
Mills plans to open its first U.S.-based operation in Eden, North Carolina. The company will invest more
than $40 million and create 84 direct jobs and hundreds more indirect jobs in just the next two years,
in a city that has suffered through difficult times with the decline of its own industrial economy. Eden
has been a proud textile town since the establishment of the countys first textile mill in 1792. And
with its investment in Eden, North Carolina, SG Mills is not just generating employment, but also
becoming part of an American towns story and ability to maintain its traditions.
I could go on, and list the success stories there are so many of them. We know this is a positive
story because the data tells us so. Two-way trade between the US and India has nearly quintupled in
the last dozen years from $19 to almost $100 billion. Defense sales have gone from virtually 0 to $10
billion in only a decade. Indian companies now employ tens of thousands of American workers, and US
companies employ even more back here in India. But we also know the data shows that we have
barely scratched the surface on what is possible. Only 1% of US exports come to India, and only 2%
of Americas imports come from India. Thats not enough. And, given the size of our two economies,
no one should be satisfied with $100 billion in two-way trade. Thats why the President has called for
another five-fold increase to $500 billion in the next dozen years. We know we can get there and we
will try to do so even faster than that.
Why the Partnership Matters
We seek this enhanced economic partnership for a number of reasons. As the President said when he
was here, Indias rise is the interest of regional and global stability, and global economic growth. If our
two economies are growing together, we can be a powerful engine for prosperity across the globe. Our
interests in this region, and across Asia are also aligning more and more. The fact is that Asian
economic integration is good for economic prosperity and for stability. Our rebalance to Asia is aligned
well with Indias Act East policy. When the countries of Asia are trading and working together in an
open, fair, rules-based commercial order thats good for society, for working people, and for the
bottom line.
But on the micro level too, our economic cooperation is critical to impacting the lives of so many. The
fact is our businesses have been closely cooperating for many years. It is through this rich network of
commercial relationships, where personal connections are often forged, where trust is deepened, and
bonds are established for the long-term. The reality is that businesses and commercial transactions
can move faster than governments and thats a good thing. With the touch of a key-stroke, deals
can be forged, information exchanged, and services provided from New Delhi to New York, Hyderabad
to Houston.
But perhaps most importantly, the growth of economic connections between our two countries is good
for ordinary people; people who want the same things, whether they are in India or the United States
a good job, a safe community, and the prospect that their children will have a brighter future. All of
us know that economic growth rates and statistics alone cannot be sufficient, unless that growth
creates the opportunity for a better way of life, and a more sustainable future, including and especially
for those at the base of the economic pyramid. As President Obama asked in his annual State of the
Union address this year, Will we accept an economy where only a few of us do spectacularly well? Or
will we commit ourselves to an economy that generates rising incomes and chances for everyone who
makes the effort?
This is a question that both of our countries have to answer, but I believe that we can do more to
create the kind of economy that lifts our people and reflects our values if we work to build it together.
The United Statesour companies, our research facilities, and our peoplewants to work with the
business and thought leaders in India to create innovation-based economic growth that doesnt just
provide worthwhile jobs to the students with us here tonight, but eventually to the employees you will
hire and the generations that will follow. We share in the vision of Sabka Saath, Sabka Vikas,
together with all, development for all.
Going forward, let me mention three areas in particular where we are pleased to be partnering with
India: (1) financial inclusion; (2) skills training; and (3) clean energy development.
Economic and Financial inclusion
In his recent visit here, President Obama commended Prime Minister Modis Jan Dhan Financial
Inclusion initiative, and signaled that America wants to be your partner as you progress toward the
ambitious goal of 100% financial inclusion. Prime Minister Modi has rightly noted that financial
untouchability is a scourge on the poor, and that full participation in todays economy requires savings
as well as access to loans and insurance. Financial exclusion in any form prevents us from reaching
our full economic potential. For the land-poor farmer, financial inclusion enhances her ability to smooth
out normal consumption and manage lifes risks; while for the new urban migrant, it allows him to
take advantage of economic opportunities such as starting or growing a small business. From a
broader national perspective, we know that financial inclusion has a direct bearing on economic
growth rates and correlates with financial stability and institutional integrity.
When Treasury Secretary Jack Lew and I were in Mumbai two weeks ago, we had the opportunity to
visit a Unique Identification Enrollment Center in a small local fishing village. We got to see what it
meant to the men and women there, some of whom had no identification documents whatsoever, to
finally have access to a modern biometric ID card. We also spoke with women who used their new
Aadhaar cards to open up bank accounts and learned what a difference bank access, accident
insurance, and an overdraft facility had made in their lives. The scale of these undertakings 800
million enrolled in Aadhaar so far, and 125 million in the Prime Ministers Jan Dhan Yojana is
remarkable, and it doesnt end with banking and insurance. Indias rapid financial inclusion campaign
will enable direct benefits transfer and improve the efficiency of vital welfare programs as well.
Already, through the sheer demand that biometrically enabled ID systems have created, prices of
Aadhaar-compatible iris scanners have gone down from hundreds of dollars to just $50. Nandan
Nilekani, who conceived of Aadhaar and led the effort as its first chairman, foresees a time when even
a $100 smart phone will come loaded with an iris scanner, bringing reliable banking services within the
reach of everyone.
It is part of President Obama's pledge of U.S. support for this vital goal, the Government of India and
the U.S. Agency for International Development (USAID) are finalizing an agreement to establish a
public private partnership with key U.S., Indian, and international organizations to support the
Government of Indias efforts to create an inclusive digital economy.
Skills
Second, let me just say a word about skills training and education. As President Obama pointed out in
his speech at Siri Fort, the majority of Indias people are under 35 years old, and in not too long, India
will become the most populous country in the world. This is sometimes referred to as Indias
demographic dividend, but cashing in on that dividend wont be easy. Young people need access to
modern skills training and a good education, one that prepares them for good jobs and molds them
into responsible citizens.
Today, the State Department is working closely with the Ministry of Human Resource Development to
help U.S. community colleges partner with Indian polytechnic schools, improve curricula, and build
stronger links with industry. The first American community colleges were established around 1900 at a
moment when the United States was itself struggling to train large numbers of skilled workers and
improve our higher education system. The concept has evolved over the past hundred years, and their
primary feature today is one of openness: providing students with a stepping stone to attain the skills
they need, or to reach the highest levels of academic study. They provide students the opportunity to
learn new skills, re-enter the education system, and transition between the vocational and the formal
education tracks. Working together, our countries can build top-quality institutions to help millions of
young Indians get the skills they need to make a stronger India.
Climate Change
Third, I wanted to note a few of our initiatives together in the clean energy arena. During his Republic
Day visit, President Obama reminded us that 2014 was the hottest year ever on record, and that India
has already started to feel the impact of a warming planet with water shortages, melting glaciers,
severe monsoons, and intense droughts. That is why we are committed to support Indias ambitious
targets on renewable energy, including its target of achieving 100 gigawatts of solar capacity by 2020.
The U.S.-India Partnership to Advance Clean Energy has already mobilized over $2.4 billion to invest in
clean energy projects here, and the U.S. Export-Import Bank is ready to make an additional $1 billion
available to finance clean energy. Meanwhile, our U.S. Agency for International Development is helping
to build the capacity of Indias power grid and integrate renewable energy. And, of course, our
breakthrough understanding on civil nuclear cooperation will help open the door to US built reactors
helping to provide electricity to the 300 million people who currently go without it.
Challenges
So, if this is all the good news.whats the flip side of this story, and where do the pitfalls and
obstacles lie? Let me mention a few. India continues to be perceived as a tough place to do business.
It ranks, as you well know, at 142 in the World Bank ranking measuring the ease of doing business.
Investor confidence is still shaky.
Intellectual property enforcement is perceived as weak. And many sectors still remain closed to
outside investors and businesses. We know that the Prime Minister has made rationalization of
bureaucratic procedures a high priority on his list of reforms, and we eagerly anticipate substantive
progress in this direction. One hotel chain CEO recently mentioned that it takes on average 80 permits
to build a hotel in India, but only six in Singapore. Moreover, according to the World Bank, it takes an
average of nearly four years to resolve a commercial dispute herethe third longest average in the
worldwhile creditors wait even longer, 4.3 years, to recover funds from a company thats become
insolvent. Indian courts face a backlog of 30-40 million cases nationwide, and companies simply
cannot afford to invest in or provide financing for an economy where legal justice comes too late,
when it comes at all. As they say, justice delayed is very often justice denied.
Some of these challenges could be addressed by a high-standard Bilateral Investment Treaty, and
thats why the United States remains committed to negotiating a BIT with India. A high-standard BIT
will give assurance to those people and companies who want to create jobs and invest in Indias future
and it could even lead to a more comprehensive bilateral agreement between our two countries.
And the United States and India have more of a common interest in intellectual property rights than
many of you may think. If India wants the best technologies, newest products, and innovations, then
it must also be known for the best intellectual property protection regime. This is not only in the
interest of US innovators, its also in the interest of Indian scientists, artists, and filmmakers, who
often lead the world in their respective fields, and who will also want and deserve to have their
intellectual property protected. Everyone knows, for example, that India is home to the largest film
industry in the world, but according to a report by Ernst & Young, the industry loses about $4 billion a
year due to piracy. Its not sufficient to talk about the importance of innovation, we must also protect
it, whether its a work of art or a life-saving medication.
Ultimately, questions about the openness of the Indian economy, the effectiveness and efficiency of
legal proceedings, the protection of IP, the burdens of licensing or the transparency of government
decision-making are questions to be resolved by the Indian people. I would only say that experience
tells us that economic reforms, legal certainty, enforceability, and transparency are hallmarks of
successful economic systems with high investor confidence, and potentials for growth that will lift
more people into the middle class.
In Closing
Many of you have already heard my father and mothers stories which are similar to so many others
in this room they showed up in America with only a few dollars, and with a dream of a better
tomorrow. Those dreams of ordinary people exist in both of countries, and its up to all of us the
leaders here assembled today to see that those dreams are given a chance to become a reality. If
we do, we can not only help transform the lives of millions, we can also continue to pull our two
countries the best partners -- closer together. Both of our countries may face fiscal and economic
growth challenges in the coming years, but clearly working together, our economies are stronger than
they are by themselves. And so long as there are great institutions like yours , promoting opportunity
and achieving excellence for all, Im excited and confident about our future together. Thank you, and
chalein saath saath.
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India
Modi Governments quest for

meaningful legislative
reforms
18 February 2015 03:39 pm
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There is bound to be resistance to change or reform. But it

cannot be done in stealth
- Narendra Modi, Prime Minister of India, at G20 Plenary Session
in Brisbane, Australia
Introduction
Reforms, in any area of governance, are a function of political will. Managing the balance of
power within the government and the continued trust and goodwill of the electorate are factors
which serve not only as the source of political will but also nourishes and sustains it. This is
more pertinent in a parliamentary democracy like India, with its demographic and territorial size,
its diversity as also its federal structure and constitutional distribution of legislative powers
between the Union and the State legislatures.
The National Democratic Alliance government led by the Bharatiya Janata Party (BJP) came to
power in May last year with a massive mandate. The general elections saw the worst ever
electoral defeat of the Indian National Congress party which had headed a coalition government
for a decade and for much of post-independence India. The last years of the previous regime
were mired in a series of corruption scandals, unwise economic decisions, oppressive business
environment, and ultimately a policy paralysis, that severely corroded the image of the
government among the electorate.
The BJP, lead by Mr. Narendra Modi, successfully tapped into the voters sense of despondency
with the promise of high economic growth and a responsive administration. The new Prime
Minister, Mr. Modi enjoys almost unquestioned authority in the Government. His party is the
single largest in the Parliament and is in power in at least 7 Indian States, which gives him
ample power and opportunity to bring in legislative changes to fulfil his economic agenda.
The journey so far

Mr. Modis stamp as an efficient, result-oriented administrator as the Chief Minister of the State
of Gujarat is seen in his lean cabinet, placing of key party legislators in critical ministries and
empowering of bureaucrats to cut red-tape and innovate. Early initiatives give a glimpse of the
governments wider vision of creating a growth-oriented ecosystem.
The National Mission for Financial Inclusion (Prime Ministers Jan Dhan Yojana) is an ambitious
project which aims to provide every household in the country with at least one bank account. It
is an effort to bring millions of Indias poor into the financial mainstream and ensure direct
transfers of subsidies to the bank accounts of intended beneficiaries. 15 million bank accounts
were opened on the very first day of the Mission.
Inspired with the vision of converting India into a global manufacturing hub, the government
conceptualized the Make in India initiative. It is expected to help create over 10 million jobs,
spur growth and boost per capita income. Concomitantly, some positive steps have been taken
to introduce flexibility in labour laws and focus on skill development. Measures to end Inspector
Raj with a system that is expected to sharply curb the element of discretion with labour
inspectors and a single window compliance process for companies on labour-related issues.
The six schemes which have been streamlined are universal account number (UAN) for
subscribers of the Employees Provident Fund, on-line compliance system for labour laws, a new
labour inspection system, a revamped Industrial Training Institutes (ITIs) and apprenticeship
scheme to give requisite skills to the workforce. The health insurance plan for unorganised
sector workers is also being tweaked.
Reflecting Mr. Modis mantra of minimum government maximum governance, one of the first
initiatives of the government was to identify 288 archaic and redundant legislations for repeal as
promised during his election campaigns. Many of these laws date back to the colonial era and
the post independence phases of law making where the government commanded economic
activities. Of the 3000 odd Central laws and numerous subordinate legislations, there are many
that have long outlived their utility, are repetitive, and inconsistent with later amendments. This
maze of confusing laws is fraught with legal risks and uncertainty creating a payoff culture for
those who can afford to wriggle out of contraventions and an overburdened judiciary.
Another area of concern for the global investors has been environmental clearances required for
various projects. The laws and procedures are opaque and prone to rent seeking and have little
relevance to changing needs. The government set up an expert committee to review forests and
environment laws with the aim to integrate environment, economic and social concerns in the
development paradigm. The committees recommendations not only aims at making it easier to
set up industrial or infrastructure projects, but also ensures that those who flout pollution norms
or violate green laws are penalised heavily. It has also recommended settling on a definition of
forest and identifying no go areas with over 70% tree canopy. The committee has
recommended creation of new institutions National Environment Management Agency
(NEMA) and State Environment Management Agencies (SEMA), a new All India Environment
Service, a national laboratory that will host a databank of all environmental parameters, and
introduction of digital and non-tamperable methods of monitoring compliances.
Allocation of natural resources, one of the most corruption-ridden sectors, has also received
attention of the government. In the coal sector, the government has ,allowed mining by private
companies, bringing in trading practices of international standards, granting more autonomy to
government run coal companies and setting up a coal regulatory authority.
The economic growth ecosystem cannot be complete without a business friendly tax regime.
The long pending Goods and Services Tax (GST) Bill has been introduced in the winter session
of Parliament. The GST will integrate the indirect taxation schemes across the country. Bilateral
advance-pricing agreements (APA) are also on the cards with major Japanese Corporations,
with Mitsui, Toyota and Marubeni being the first ones to do so. It is also been widely reported
that India will soon renegotiate its tax treaties with Germany, France, Singapore, Italy and South
Korea to pave the way for bilateral APAs with those countries.
The government is also working on subsidy reforms cutting wasteful subsidies on fuel, fertiliser
and food. Diesel pricing has been deregulated. The first subsidy reform on cooking gas (LPG
fuel) to plug leakages got off the ground from 1 January 2015 with all subsidies going into the
bank accounts of the intended beneficiaries.
A comprehensive Communications Bill to overhaul the way in which the telecom sector is
presently regulated is on the anvil. This sector was hit by major corruption scandals during the
previous regime. The government has expressed its intent to reduce its role in regulating this
sector and limit its focus to issues of security, morality, public safety, and disaster management
and to promote competition and optimal use of spectrum. The new Bill is expected to repeal the
archaic Indian Telegraph Act, 1885, Indian Wireless Telegraphy Act, 1933 and the Telegraph
Wires (unlawful possession) Act, 1950 and the Telecom Regulatory Authority of India Act, 1997.
Another area of reforms to boost investor confidence is the financial sector. The government
proposes to implement the Financial Sector Legislative Reforms Commission report that has
recommended an overhaul of this sector. The legal and institutional structures of the financial
sector lie in over 60 laws and numerous regulations and require harmonizing of contradictory
provisions.
Early challenges to reforms

8 months down the road, the gap between the promise and delivery has widened. The
government has not been able to pass important legislations in the last couple of Parliament
sessions. Opposition parties united to disrupt proceedings over the Sangh Parivars (collective
term for right wing Hindu organisations - the Rashtriya Swayam Sewak Sangh (RSS), Vishwa
Hindu Parishad (VHP) and Bajrang Dal), of which BJP is a part, polarising actions. Articulation
of concepts like Ghar Wapsi (reconversion of Muslims and Christians to Hinduism) and Love
Jihad (opposition to an alleged movement of Indian Muslims to marry Hindu women) have
tested Mr. Modis inclusive development agenda. Mr. Modis silence in Parliament on the
activities and utterances of the Sangh Parivar entities gave the impression of the governments
tacit support to such divisive agenda and ensured that the government was unable to undertake
any significant legislative business in the last 6 months.
Government then resorted to promulgating ordinances to bring in some important changes to
the legal framework. An ordinance is a temporary legislative measure available to the Executive,
under the Constitution, to make laws when Parliament is not in session, subject, of course, to its
ratification within 6 weeks from the date of reassembly of Parliament.
Insurance Laws (Amendment) Ordinance 2014 aims at lifting the cap on foreign
investment in insurance sector from 26% to 49%.
The Mines and Minerals (Development and Regulation) Amendment Ordinance 2015
provides for competitive bidding through auction route and gives existing mining leases
substantial extension providing production stability.
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation

and Resettlement (Amendment) Ordinance, 2014 has amended the 2013 law removing
mandatory consent clause and Social Impact Assessment (SIA), in case, the land is acquired
for national security, defence, rural infrastructure including electrification, industrial corridors and
housing for the poor including PPP where ownership of land continues to be vested with the
government.
Citizenship (Amendment) Ordinance 2015 which primarily seeks to change the

categorisation of Non Resident Indians (NRIs) from Persons of Indian Origin to Overseas
Citizen of India to encourage and facilitate NRIs to be party to Indias growth story through their
capital, technical prowess and entrepreneurial skills.
Coal Mines (Special Provisions) Second Ordinance 2014 was re-promulgated because
the bill remained pending in the Upper House of the Parliament after being passed by the Lower
House.
The ordinance route of law making was been widely criticised for bypassing democratic
processes. The land acquisition ordinance in particular drew flak for virtually doing away with
social impact assessments amounting to taking away land and livelihood of land losers without
any scrutiny. Uncertainty of the ordinances lapsing when its term expires if not converted into
legislations is hardly conducive to investor confidence, though the government has assured
investors that it would call a joint session of Parliament, where the government will have
majority, to pass the bills, if the ordinances cannot be ratified by Parliament in the Budget
Session starting February 2015. All investments made during the ordinance period will be
irreversible whatever the outcome of the ordinances.
The business community and foreign investors have been looking for more signs of economic
reforms that were expected of this avowedly pro-business government. The government has
been tardy on its plans to disinvestment in public sector undertakings and is unlikely to meet its
fiscal deficit target before the financial year ends in March 2015. Little has been heard about the
governments specific plans to reform the power sector where insufficient generation, power
thefts and transmission losses plague the electricity distribution companies. The governments
FDI policy is ambivalent, selective in opening of sectors and still denying entry to multi-brand
retail.
Judicial reforms and the question of judicial independence

Indian judiciary led by the Supreme Court has played an important role in the realisation of
Constitutional ideals. However, the tug of war between the Judiciary and the Executive over the
appointments to the higher Judiciary i.e. High Courts and Supreme Court, has seen another
turn with the passage of National Judicial Appointments Commission Bill, 2014. The Bill puts an
end to the collegium system (appointment of judges by a collegium of senior most judges) which
had given the judiciary supremacy over the executive on judicial appointments for over two
decades. The Bill reverses that position by creating a National Judicial Appointments
Commission comprising of the Chief Justice of India as the Chairman, Union Law Minister, two
senior-most Supreme Court judges and two eminent persons. The two eminent persons will be
selected by a collegium comprising of the Prime Minister, Chief Justice of India and leader of the
opposition or the leader of the single largest party in the Lok Sabha. Appointments of the Chief
Justice of India and other Judges of the Supreme Court and Chief Justices and other Judges of
High Courts through the judiciarys collegium system had been a highly secretive and nontransparent procedure and the quality of judges who held positions in the highest courts were
often called to question by the law-makers and the bar.
Conclusion
The beauty of hope is that even when there is nothing perceptively different in the
circumstances, it keeps the spirits alive. Mr. Modis government through campaigns such as
Clean India, Make in India, Jan Dhan Yojana, Beti Bachao Beti Padhao (about saving and
educating the girl child), has kept the rhetoric of change alive in the public mind. It remains to be
seen how quickly he can recast the legal and institutional architecture of India to meet the
demands of an aspiring nation. His Sabka Saath, Sabka Vikas (collective efforts inclusive
growth) will come to nought if he is unable or unwilling to keep the Sangh Parivar outfits in
check.
*****
Write To Us :
letters@sunday-guardian.com
SATURDAY | MARCH 07, 2015
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Rana Kapoor
ana Kapoor, MD & CEO of Yes Bank, talked to Rajiv Kapoor.

Excerpts:
Q: Over a year ago, Reserve Bank of India Governor

Raghuram Rajan emphasised on "a more effective
judicial process or a better bankruptcy system". Has
anything happened since then?
A: From a banker's perspective, the Governor's comment is

a valid observation. One of the reasons for poor recovery of
bad loans is the sluggish judicial process, which, in some

sense, can be seen as inadvertently supporting the noncooperative defaulter at the expense of banks and therefore
public savers. To remedy this, the government has set the
ball rolling with a plan to expand the number of Debt
Recovery Tribunals (DRTs) in the country, which will be
critical, given that these tribunals have managed to recover a
meagre 13% of outstanding balances in a year.
On 14 December, the Cabinet approved the establishment of

six new DRTs along with the rationalisation of jurisdiction of
some of the existing ones. Along with the new DRTs, the
government must expand facilities of the existing ones, hire
trained personnel, and bring in electronic filing and online
tracking of cases, given that there are over 50,000 cases
pending with DRTs currently.
Also, a new bankruptcy law is in a draft mode. Such a law, by

bringing clarity and predictability, will allow a more orderly
resolution system. A bankruptcy law will only facilitate the
aim to reduce the time spent in a judicial process. Therefore,
I fully support the RBI Governor's viewpoint on this mission
critical subject.
Q: What is your take on financial sector reforms in

general and the pace at which they are being carried
out, if they are being carried out, that is?
A: Financial sector reforms are not a linear process. The

progress of reforms is dependent on the conditions in the
real economic sectors, macroeconomic policies, and strength
of our institutions. In my opinion, India is now at a juncture
where its macros will steadily improve. Structural strengths
have regained focus, with the policy environment beginning
to change. Most importantly, we see that there is political
will to push forward financial sector reforms now. The
success of the Jan Dhan Yojana over a short span is an

illustration of this. In addition to bringing the "unbanked"
within the ambit of financial services, the scheme has
significant multiplier effects in terms of efficient targeting of
subsidies and promoting a cashless society via RuPay.
Further, the government and RBI are working on a new
monetary policy framework basis, the Urjit Patel report,
which is expected to be announced soon. So, reforms in the
financial domain have gathered pace over the last few
quarters. To support infrastructure-led revival in growth, the
RBI has resorted to the easing of some of the financial
constraints too. Going forward, we can expect to see the RBI
broadening and deepening financial markets, while
strengthening banking structure through newer entries and
differentiated bank licences.
Q: So far, the government has shied away from bigticket reforms and focused on incremental change;
perhaps, it feels that the forces of status quo should
not be allowed to get aggressive and cause trouble.
Is this a good strategy?
A: Let's consider the economic background that existed over

FY12-FY14. Economic growth of sub-5%, coupled with retail
inflation running at twice that pace, spawned domestic
macro imbalances manifesting in unsustainable deficits that
eventually had an adverse impact on the rupee. The stimulus
aided consumption amid stagnation in investments due to
inadequate governance led to the overall downbeat
sentiment. It was important to break this vicious loop. The
new government has adopted a "bottom-up" approach via a
three pronged strategy, aiming to create "absorptive
capacity" in the economy before embarking on big-ticket
reforms:
* It has maintained policy continuity where it was necessary,

e.g., the use of Aadhar based platform for efficiency in
subsidy disbursement.
* Fine-tuned policy as per the evolving economic dynamics

e.g., the announcement of rule-based coal auctions, moving
ahead with changes in the gas-pricing formula and land
reforms.
* Introduced prudent changes in areas like bureaucracy and

policy formulation, e-clearances for projects, buffer stock
management for curbing food inflation, gradual FDI
liberalisation, labour reforms, and diesel price deregulation.
I would call this an incremental change approach with the

acceleration of micro reforms. While at the singular level,
these could be perceived as small steps, the collective impact
of all these micro reforms will be instrumental towards
removing investment hurdles and improving ease of doing
business in India.
As far as big-ticket reforms are concerned, the vision has

already been laid out. In the coming years, focus will remain
on efficiency (GST, Digitization, Smart Cities, Skill India)
and inclusive (Rurban schemes, Jan Dhan programme)
economic growth (Make in India).
Q: What are your expectations from the Budget for

the financial sector in particular and the
development in general?
A: The FY16 Budget will be the first full-scale statement of

intent by the NDA government. At the macro level, I expect
the Finance Minister to continue on the path of gradual
fiscal consolidation while improving the quality of
adjustments by focusing on introducing efficiency in revenue
expenditure and prudently using the space for capital

expenditure to occasion private investment and capital
formation. In terms of specifics, I expect a rolled-out
roadmap for a well-focused disinvestment programme,
incorporation of recommendations of the Expenditure
Management Commission, steps towards gradual
corporatisation and monetisation of Railways, and increased
budgetary allocation for sectors like infrastructure, housing,
education and skills. Last, but not the least, it should pave
the way for implementation of GST from April 2016.
From the perspective of the financial sector, I expect the

Budget to announce measures to increase household
financial savings in bank deposits, equity instruments, and
alternative saving avenues like REITs. In addition, I look
forward to a long-term plan of action for recapitalisation of
public sector banks, and incentives for the development of
corporate/municipal bond market to augment growth of
Smart Cities in the country.
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IMF lowers Indias economic growth forecast by 1

per cent to 5-6 per cent for 2012-13 on October 9,
2012 3:58 am
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Nitesh Srivastava
Basic Author | 1 Article

Joined: September 6, 2014
Centralized Banking by Government of

India
By Nitesh Srivastava | Submitted On September 10, 2014
Indian PM Mr. Narendra modi launched Jan Dhan Yojana, a mega financial
inclusion plan for poor and common man having no access to formal banking
facilities. The objective is not only to help establishing formal banking system
in India for all but also to have centralized banking by the government of India.
This will in turn bring economic development and strengthen the government by
accumulating funds to India rather than routing funds to international foreign
banks. This is a great initiative that will not only help all classes in India, but
also bring social and economic growth across the nation.
Narendra modi's financial inclusion drive is to help the poor open bank accounts
and to integrate the poorest with formal banking system in India. On the other
hand, its attractive benefits to account holders as debit cards, overdraft facility
up to Rs 5000, accident insurance cover of Rs 100000, life cover and medical
cover of Rs 30,000. The high aim is to help poor who do not have bank accounts
and are not aligned to the Indian national banking system.
The Prime Minister aims to integrate 7.5 crore households to have bank
accounts by next year. This initiative will help allow people from rural and
urban areas to open bank accounts with PM's Jan Dhan Yojana. Integrating
common man is great initiative to centralized banking system in India and
people from villages who have no access to banking facilities will be greatly
benefited. This will be facilitated with 7000 branches and 20,000 new ATM
centers in the country.
Government of India provides many other schemes for the welfare of its
citizens, but the benefits are not reached to common man. Post Offices are fully
government owned bodies and provide many policies for the benefit of citizens.
These are safe investment options allowing great savings and earn good interest
on long term investments.
There are many such policies by IPO like Kisan Vikas Patra, National Savings
Certificates (NSC), Public Provident Fund (PPF), Senior Citizen Savings
Scheme, Post Office Monthly Income Account Scheme, Post Office recurring
deposit and savings account etc.
There are several benefits of investing in post office schemes:
- These schemes are offered directly by Government of India.
- Safest, secure and risk-free investment options.
- No Tax Deduction at Source (TDS).
- The instruments can be purchased from any Post Office anywhere in India.
- Attractive rates of interest
Post office savings as an Investment avenue is most convenient for investors
from all classes, this is common not only in urban but also rural areas. The
Indian Postal Services and the schemes offered by it, have gained high public
trust and confidence of common people. India possess the largest network of
postal offices in India with nearly 160,000 branches spread across the country.
Various accounts offered by Indian Post Offices include:
Savings Account: Post office savings account works same as savings account in
a bank. This is convenient for people in rural areas who have limited banking
facilities. This account can be opened with minimum of Rs.50 and maximum of
Rs.1,00,000 by an individual.Withdrawal from the account is by cheque and
there is no restriction on withdrawals, unlike commercial banks. Interest earned
from your savings is tax free under section 80 of income tax act and interest is
higher by 1 to 2% than other commercial banks.
Post Office Recurring Deposit Account: Recurring deposit account is systematic
way of saving money. The scheme is meant for those investors who want to
deposit a fixed amount regularly on monthly basis in order to get a tidy sum
after 5 years on the maturity of the account. The recurring deposit account can
be opened at any post office. Period of maturity of account is 5 years. Sixty
equal monthly deposits shall be made in an account in multiples of Rs.5 subject
to a minimum of Rs.10. The scheme covers free life insurance cover after
receiving contributions for 24 months on account of denomination of Rs. 5, Rs.
10, Rs. 15 or Rs. 20. One must have no withdrawals or defaults during the first
two years to enjoy all benefits of the policy. Premature closure of account is
permissible after expiry of three years. In case of premature closure of account,
the interest at the rate applicable to post office saving account shall be payable.
Post Office Monthly Income Scheme (MIS): is one investment option which
offers guaranteed regular monthly income post its maturity and very good
returns with annual rate of interest from 8.4% to 9% good as any fixed deposit
with banks. The Post Office Monthly Income Scheme (MIS) provides for
monthly payment of interest income to investors. It is meant for investors who
want to invest a lump-sum amount initially and earn interest on a monthly basis
for their livelihood. The scheme is therefore, a boon for retired persons.
However, there is a need for little improvement, private companies do a lot of
promotion and reach out to every individual who also may not be interested to
purchase a policy will tend to buy. Private companies are just a phone call away
and the agents would reach to interested individual in person. However, so is not
the case with government policies, one has to really struggle to buy a policy.
Post offices are easiest and convenient options to reach out to every individual
and masses.
What is required in favor of citizens is, to promote these government policies

and reaching out to masses. Most the post offices in small villages will have
these schemes available at only the centralized post offices. People who want to
buy these policies do not have the buying options through online, or by visiting
nearest post offices. They are routed to the central bank to purchase these
policies. If a person is interested to buy a policy by government or post office,
his interests should be served by providing door to door service or at nearest
post offices.
Great savings account opening and income saving options provided by
government of India.
Article Source: http://EzineArticles.com/?expert=Nitesh_Srivastava
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