Banks to open 70,000 accounts on launch day of Jan dhan Yojana

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Banks are expected to open about 70,000 accounts on the first day of launch of Pradhan Mantri Jan Dhan Yojana by Prime Minister Narendra Modi on August 28.

"All the banks have started preparatory work and the mega camp will be held on August 28," Financial Services Secretary G S Sandhu told PTI.

"We are looking to open a large number of accounts. It would be between 60,000 and 70,000 accounts through mega camp. The accounts would be opened by both public and private sector banks," he said.

The ambitious financial inclusion scheme was announced by the Prime Minister in his maiden Independence Day speech on August 15.

The scheme, 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 Aadhar-linked accounts, RuPay 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.

The new scheme is an improvement over the UPA's financial inclusion programme.

The earlier scheme had no focus on households and no emphasis was given on urban financial inclusion, according to some experts. Besides, they maintained that there was a cumbersome Know Your Customer formality, restricting account opening.

Other deficiencies cited included lack of credit disbursement and 47 per cent of business correspondents being untraceable, resulting in inactive accounts.

The new scheme has tried to address all the possible deficiencies and its monitoring would be done at state and district levels.

The 'mission mode' approach has been envisaged with the Finance Minister as head of the mission.

The mission will have five different levels for overseeing the implementation of the programme -- three with the Centre and two with state governments.

The programme assumes importance as 42 per cent of the population is still out of the formal banking system, and has to depend on money lenders for meeting their credit needs.

The present banking network of the country comprises of a bank branch network of 1,15,082 and an ATM network of 1,60,055. Of these, 43,962 branches (38.2 per cent) and 23,334 ATMs (14.58 per cent) are in rural areas.

The first phase of the mission, starting this month, would end in August next year.

The second phase will start from 2015 till 2018, covering aspects such as micro insurance and pension schemes like 'Swavlamban'.

Some of the Phase II activities would also be carried out in Phase I.

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