Jan Dhan Yojana: Banks to get ‘handsome’ compensation

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Banks and their banking correspondents (BC) who provide basic services under the Pradhan Mantri Jan Dhan Yojana (PMJDY) will be compensated “handsomely", said government sources.

The commission payable to banks (which then pass on the share to BCs) under the Direct Benefit Transfer (DBT) scheme launched under UPA rule is 1% of the total DBT amount transferred.

While there was a plan to raise this to 2% of the “actual amount transferred through BCs", under the new PMJDY the commission could be even higher, the sources indicated.

Also, they added, the finance ministry would assess the performance of each Public Sector Bank in implementing the PMJDY and consider it as one of the main parameters while capitalising them.

PMJDY is a comprehensive financial inclusion programme targeting opening of 7.5 crore new accounts within five months with insurance and pension facilities. Around 1.84 crore accounts (1.2 crore in rural areas and 64 lakh in urban) have been opened so far.

BCs are employed in places where banks do not have branches. The target under PMJDY is for banks to have an additional 50,000 BCs, in addition to 7,000 more branches and 20,000 new ATMs.

Also, to make the dormant accounts (estimated at around 5 crore) active, the government will soon announce that dormant accounts holders, if found eligible, will get subsidies and other payments related to DBT as well as the National Rural Employment Guarantee Scheme directly into their accounts if these accounts are activated. Such account holders will also get accident insurance worth R1 lakh, overdraft of up to R5,000 and life insurance of R30,000.

On the accident insurance cover of R1 lakh being offered to new account holders, officials said it comes with the condition that before making the claim, the holder should have used his/her account during the 45 days prior to the claim date. However, officials are considering if some exceptions can be made to this rule.

On setting up of the credit guarantee fund to cover defaults of the overdraft facility of up to R5,000, the sources said the corpus of the fund is likely to be R1,000 crore and soon a cabinet note would be moved for the purpose by the department of financial services.

The overdraft facility is only for Aadhaar-enabled accounts after they have been operated satisfactorily for six months. The fund will be set up only after August 2015. The allocation for the fund will be in the supplementary demands for grants or in next year's Budget. Banks have been told to assess the creditworthiness of people before opening accounts so that they do not misuse the overdraft facility.

Banks have also been asked to link new accounts to the Aadhaar card/number, take self-declaration on creditworthiness and other details and make sure that accounts are active. Wrong self-declaration can lead to legal action.

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