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Jan Dhan Yojana achieves 70% of target led by PSBs

Banks have opened a whopping five crore accounts under the Jan Dhan scheme till 25 September and collected over Rs 3,500 crore in deposits, a top Finance Ministry official said here on Monday.

Led by state-run banks, the system has opened over 5 crore accounts under the Jan Dhan scheme as of 25 September and the deposits collected through the scheme have crossed Rs 3,500 crore, Financial Services Secretary GS Sandhu told the annual meeting of the Indo-American Chamber.

The average deposit per account through this scheme is Rs 800-900, he said.

Giving a major push to the Aadhaar scheme, Sandhu said, all these accounts will be seeded to the Aadhar number and will have biometrics to avoid the duplication.

The Jan Dhan scheme was announced by Prime Minister Narendra Modi during his Independence Day address and was formally launched on 28 August. On the opening day itself, banks opened over 1.5 crore accounts. The government has set a target to open 7.5 crore such no-frills accounts by Republic Day next year. Opening of 5.1 crore accounts means meeting 70 pe cent of the target of 7.5 crore set by the government by 26 January, 2015, he said.

Each of these accounts comes with Rs 5,000 overdraft facility and a Rs 1 lakh accident cover and are linked only to the RuPay cards.

Allaying fears that the Reserve Bank of India (RBI) had raised, Sandhu claimed  all the concerns have been addressed. Reserve Bank Governor Raghuram Rajan had earlier this month flagged concerns on the speed at which the scheme was being rolled out.

‘We have to make sure it does not go off track. The target is universality, not just speed and numbers,’ Rajan had told a bankers’ summit earlier this month.

‘We have discussed with RBI, with the governor and other functionaries there. We are all one. There are no differences now,’ Sandhu said today, adding that RBI is supporting the scheme and is also talking to banks.

As for the fear that such accounts may stay dormant, Sandhu said bankers are asking people to deposit money even though these are zero-balance savings accounts.

On an average Rs 800-900 is being deposited in these accounts, Sandhu said, adding this will help in increasing the savings and keep the accounts active.

The government will be transferring the subsidies directly to these accounts which will also help,
Sandhu said.

However, he conceded that at present 50 percent of the 20 crore accounts opened under financial inclusion programme are inactive. Each Jan Dhan account comes with Rs 5,000 overdraft facility, a Rs 1 lakh accident cover and a RuPay debit card.

The banks have so far distributed the RuPay debit cards to only 1.2 crore account-holders because of the high demand for the cards, Sandhu said, assuring that gradually everybody will get the card.
Sandhu also said his department has got the corporate affairs ministry to approve corporate contributions to financial literacy as  part of mandatory corpoarte social responsibilty (CSR) spend.
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