Financial inclusion or exclusion ?
- Hueiyen Lanpao Editorial :: September 02, 2014 -

In an impressive showing within 100 days of forming the new BJP-led NDA Government at the Centre, Prime Minister Narendra Modi launched his mega scheme ‘Jan Dhan Yojana’ to eradicate financial untouchability by providing bank accounts to all, specially the poor people in rural areas, four days back.

On the inaugural day itself, a record 1.5 crore bank accounts were reportedly opened across the country, which was unarguably one of the largest such exercises on a single day possibly anywhere in the world.

The scheme aims to cover 7.5 crore people by January 26, 2015, who will be provided zero-balance bank account with RuPay debit card, life insurance cover of Rs 30,000 in addition to accidental insurance cover of Rs 1 lakh.

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

The beauty of the scheme is not just the financial incentives that come along with opening of a bank account by an individual, but the efforts towards beating back the endemic corruption which has affected almost every level of the bureaucracy today by channeling the Government welfare initiatives and work payment directly into the accounts of the individuals rather than through regional and local offices or middlemen.

It’s a fact that even after 68 years of independence, a large section of Indian population still remain unbanked, and this has led to generation of financial instability and pauperism among the lower income group who do not have access to financial products and services and are at the mercy of greedy money lenders or unscrupulous middlemen.

Taking this into account, for the last few days the Government as well as the Reserve Bank of India have been pushing the concept and idea of financial inclusion, which is nothing but delivery of financial services at affordable costs to vast sections of disadvantaged and low income groups by ensuring opening of "no frill accounts".

So, Prime Minister Narendra Modi’s mega scheme of ‘Jan Dhan Yojana’ may not be such a new idea.

But what is important here is that same idea which has remained only on paper or in every discussion forum of bankers has now been launched formally to put into action.

There might be various challenges that need to be overcome for the success of this ambitious scheme like existence of so many unbanked blocks and addressing the concerns of business correspondents (BCs) who are to be be posted to cater to the need the customers living in areas where there is no physical bank branches (mortar and brick banks), mobile and internet connectivity since mobile banking through phones is to play an increasingly important role in the here, but what is really annoying in case of Manipur is for the bank officials to tell the customers who come to open their bank accounts that the copies of the application forms have been exhausted and one can downloaded them through internet, when internet connectivity almost non-existence even in the city. So much for financial inclusion!