Beruflich Dokumente
Kultur Dokumente
Place: COCHIN
Date: 20-04-2015
SARATH SIDHARTHAN
CHAPTER
-1
DESIGN OF THE STUDY
Account can be opened in any bank branch or Business Correspondent outlet. PMJDY
accounts are being opened with Zero balance. However, if the account-holder wishes to
get cheque book, he/she will have to fulfill minimum balance criteria.
Benefits of PMJDY Scheme
1. Interest on deposit.
2. Accidental insurance cover of Rs.1 lakh
3. No minimum balance required.
4. Life insurance cover of Rs.30,000/-
1.2
REVIEW OF LITERATURE
Kunthia R (2014) - The author in this research paper has attempted to study the recent
developments on Financial Inclusion in India with special reference to the recently
launched Pradhan Mantri Jan-Dhan Yojna (PMJDY).The author has presented an
analysis of its different important areas, the roadblocks in the process and has suggested
strategies to attain universal coverage of the PMJDY for the underprivileged population
and the large unbanked areas of the country.
Bhuvaneshwari P & Pushpalatha P (2013) - The authors say that even after attainment
of independence India is yet to provide independence to its poor from debt and cunning
money lenders.The authors are of the view that the Indian banking system has to
increase its focus on the problems faced by rural India. The authors advocate the
concept of social banking which primarily constitutes financial services that result in
human development; it is a system in which the rich subsidises the provision of the
financial services to the poor. Social banking exists in India in the form of cooperative
banks, regional rural banks but their success has been limited due to the combination of
a large population, the vast geographical spread of the country & unavailability of
banking services. They feel that social banking can be an instrument of financial
inclusion in India.
.G
.H
Dr.B.C.M. Patnaik , Dr. Ipsita Satpathy,D.Litt & Avinash Chandra Supkar
(in International Journal of Management (IJM)) PMJDY is a major catalyst in achieving
the goal of inclusive growth as the initial figures are encouraging and as more and more
people get in the ambit of formal institutions they will be in a position to contribute
more positively in the economic development of the country. When people save money
ultimately they make for themselves the availability of surplus which can be utilized by
the banks to channelize it to the needy sectors. Also by opening a bank account people
can earn risk free returns and can also enjoy the benefits of other linked financial
services which they were not able to access.
CHAPTER 2
THEORETICAL FRAMEWORK
As a measure towards financial inclusion of the poor in the national mainstream, the
government launched the Pradhan Mantri Jan-Dhan Yojana (PMJDY) on 28 August
2014.
Financial inclusion: It has been defined, by the Committee on Financial Inclusion,
2008, as 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 an affordable cost. It primarily represents access to a bank account backed by
deposit insurance, access to affordable credit and the payments system.
Importance of Financial Inclusion: Financial inclusion, more particularly when
promoted in the wider context of economic inclusion, can uplift financial conditions and
improve the standards of lives of the poor and the disadvantaged. Access to affordable
financial services would lead to increasing economic activities and employment
opportunities for rural households with a possible multiplier effect on the economy. It
could enable a higher disposable income in the hands of rural households leading to
greater savings and a wider deposit base for banks and other financial institutions. It will
enable the Government to provide social development benefits and subsidies directly to
the beneficiary bank accounts, thereby drastically reducing leakages and pilferages in
social welfare schemes. Further, expanding the reach of financial services to those
individuals who do not currently have access would be an objective that is fully
consistent with the people-centric definition of inclusive growth which attempts to
bridge the various divides in an economy and society, between the rich and the poor,
between the rural and urban populace, and between one region and another. Thus,
financial inclusion could be an instrument to provide monetary fuel for economic
growth and is critical for achieving inclusive growth.
Financial Inclusion in India Background: The efforts to include the financially
excluded segments of the society into formal financial system in India are not new. The
concept was first mooted by the Reserve Bank of India in 2005 and Branchless Banking
through Banking Agents called Bank Mitr (Business Correspondent) was started in
the year 2006. In the year 2011, the Government of India gave a serious push to the
programme by undertaking the "Swabhimaan" campaign to cover over 74,000 villages,
with population more than 2,000 (as per 2001 census), with banking facilities. Because
of the RBIs drive for financial inclusion, the number of bank accounts increased by
about 100 million during 2011-13
The Swabhimaan campaign, however, was limited in its approach in terms of reach and
coverage. Convergence of various aspects of comprehensive Financial Inclusion like
opening of bank accounts, digital access to money (receipt/credit of money through
electronic payment channels), availing of micro credit, insurance and pension was
lacking. The campaign focused only on the supply side by providing banking facility in
villages of population greater than 2000 but the entire geography was not targeted.
There was no focus on the households. Also some technology issues hampered further
scalability of the campaign. Consequently the desired benefits could not be achieved
and a large number of bank accounts remained dormant
The PMJDY is being implemented in two phases. In the first phase (till August 14,
2015) every account holder will receive a RuPay debit card, and will be able to use
basic mobile banking services, such as balance enquiry. Further, every account holder
under the scheme will get an accident insurance cover of Rs.1 lakh. Bank accounts
opened between 28 August 2014 and 26 January 2015 would also get life insurance
cover worth Rs30,000/-. These accounts are also eligible for over draft facility of
Rs.5,000/- based on performance during the first six months. There will also be a
financial literacy programme, expansion of Direct Benefit Transfer under various
schemes through the beneficiaries bank accounts, and issuance of RuPay Kisan Card.
In the second phase (from August 2015 to 14 August 2018), micro insurance and
unorganized sector pension schemes would also be provided. Bank accounts opened
after 26 January 2015 would be eligible for life insurance cover and micro insurance in
this phase. As it is difficult to spread bank branches across all unbanked areas, Business
Correspondents (BCs) will be deployed on a large scale to help execute the plan.
The programme for financial inclusion under the PMJDY is based on six pillars:
1. The country will be divided into a number of sub-service areas (SSA), each with
1,000-1,500 households. One banking outlet (branch or BC) will be established within a
distance of five km from every SSA by August 2015;
2. One bank account will be ensured for every household by August 2015, along with a
RuPay debit card and an accident cover worth Rs.1,00,000. If the credit history is
satisfactory during the first six months, the account holder will become eligible for an
overdraft worth Rs.5,000;
3. Financial literacy programmes will be expanded by August 2015 to spread awareness
about financial services;
4. A Credit Guarantee Fund will be created before August 2018 to cover potential
defaults in overdrafts;
5. All willing and eligible persons will be provided with micro-insurance by August
2018; and
6. Pension payments under the Swavalamban Yojana scheme for workers in the
unorganised sector will be paid through bank accounts by August 2018.
Special Benefits under PMJDY Scheme
a. Interest on deposit.
b. Accidental insurance cover of Rs.1.00 lakh
c. No minimum balance required.
d. Life insurance cover of Rs.30,000/e. Easy Transfer of money across India
f. Beneficiaries of Government Schemes will get Direct Benefit Transfer in these
accounts.
opportunities and the market potential for the poor by bringing them into the banking
and financial bracket which involves the following:
The urban poor population of the country is estimated to be around 8 crore (one third of
the urban population is poor). Most of them work for the unorganized sector having
limited sustainable livelihood options. According to some estimates 40 % of the adult
urban population does not have access to a bank account thus alienating them from the
basic financial services such as savings, credit and remittances. The first challenge for
the urban financial inclusion is the identification of the urban poor, followed by the
challenge of identity proof particularly in the case of the migrant work force. The main
factors keeping the migrant work force and the remaining urban poor from the bracket
of accessing financial services includes, low income, irregular earnings, migrant nature
of the population, inadequacy to provide the required documentation, bigger family size
combined with a single earning member and financial illiteracy leading to poor money
management skills.
The issue of financial illiteracy result in the migrant workers lack of awareness about
the remittance facility offered by formal service providers as a result of which even
those who do have bank accounts are not able to utilize these services. Also, those who
have money prefer to keep it at home or participate in informal savings scheme like chit
fund. Because of the ease and the speed of the services informal sources of credit the
urban poor prefer them over the formal sources and the lender takes advantage of their
situation and charges them with exorbitant rate of interest. The migrant nature of their
job also results in them in not having any dependable identities, references and contacts
as a result of which they are denied access to financial services form the banks. The
attitude and the mindset of the serviced providers also feature prominently in the factors
resulting in urban financial exclusion.
Financial Inclusion before PMJDY:
In India, financial inclusion first featured in 2005, when itwas introduced by K C
Chakraborthy, the chairman of IndianBank. Mangalam Village became the first village
in Indiawhere all households were provided banking facilities.KYC Norms were relaxed
for people intending to open accounts with annual deposits of less than Rs. 50,000. In
order to ensure financial inclusion various initiatives were taken up by RBI like
ATM Network in rural India is less hence the people are less aware of using
ATMs
No check on the new account chances of existing account holders opening
Summary:
The scheme is unprecedented in scale and coverage as more than 1.5 crore or 15
million bank accounts were opened in a single day when PM launched the
scheme on August 28.
Public Sector banks have opened nearly 6.5 crore accounts against the target to
open 7.5 crore bank accounts before 26 January next year.
Under the scheme an account holder is entitled to one lakh rupees accidental
death cover and 30,000 rupees life insurance cover.
Basic bank accounts with overdraft facility are provided. Financial literacy
program will also be rolled out. Credit guarantee fund will also be constituted.
This scheme is also being seen as one strong pillar of vast number of initiatives
and schemes that have taken place over the years.
Experts point out that, if implemented properly, the Jan Dhan Yojana has the
potential to wipe out the financial untouchability.
There is a lot of scope for improvement in the way the scheme is implemented at
the ground level.
Long cue can still be seen outside bank branches. Despite the governments
promise to open at least 2 accounts per household, many still havent made it
even to their first one.
Public sector banks are finding it difficult to cope with the rush.
Despite the massive publicity, several people from the targeted section are not
yet aware of the scheme.
The connectivity becomes very much important as the money is transferred from
the government on online basis.
There are about 50000 villages in the country which do not have internet
connectivity or have poor connectivity.
Public sector banks who are at the forefront of this massive financial inclusion
program have urged the centre, state governments and telecom service providers
to take corrective measures.
Providing telecom services and ICT infrastructure in the remote parts of the
country to bring the rural people into the financial system fold is critical to the
scheme.
Communication remains a huge issue with huge illiteracy levels. Several parts
are completely out of reach of any kind of media whatsoever.
Banks also need to streamline the process of enrolling people in the rural areas.
Under the PMJDY the banks are not mandated to collect the biometric data.
Many people are not happy with the overdraft facility of just 500 rupees. Banks
and experts are divided over the issue. Banks defend their policy of enhancing
the overdraft limit on the basis of credit history of account holders.
The target group comprises people who often dont have any official
identification documents. These are the same people who suffer heavily at the
hands of money lenders.
The recent Sharada Chit Fund scam is an eye opener for the policy makers. In
this case lack of access to the formal financial system caused havoc to the
millions of the lower and middle class as the chit fund company duped them of
their life time savings. The Supreme Court ordered for a CBI probe.
In the post-nationalisation era a significant move took place from -class- banking
to -mass- banking.
Today public sector banks admit that financial inclusion programmes like
PMJDY are a critical tool of overall national development.
Census data of 2011 says that out of 24.67 crore households in the country, 14.48
cr/ 58.7% of the households have access to banking services. 54% of the rural
households are availing the banking services. In urban areas the situation is
slightly better as 68% of the households have access to the banking services.
This suggests that there is room to move in further.
At the end of March 2014 there were 1.15 lac bank branches and 1.60 lac ATMs
in the country. Of this 38% of the bank branches and 16% of the ATMs are in
rural areas. 1.4 lac bank correspondents are in rural areas. These correspondents
represent banks to provide basic banking services. These correspondents need to
be trained efficiently.
Experts suggest that mere increase in number of bank branches is not sufficient
to implement financial inclusion. Banks need to change their approach
completely with regard to economically weaker sections and become more poorfriendly.
There are lessons to be learnt from the success of the fast moving consumer
goods and telecom companies in profitably catering to the lower economic strata
of the society.
The current state of regulatory environment is also responsible for the sorry state
of financial inclusion in the country.
Harnessing the wide network of post offices and fair price shops can help in
increasing the financial inclusion.
The objective of the financial inclusion program is to get rid of the money
lenders.
CHAPTER 3
DATA ANALYSIS AND INTERPRETATION
3.1.19
Question 19
To what extent do you think that the easy procedures of PMJDY scheme helped a lot to
achieve the target of 7.5 Cr household under the scheme?
NO
.OF PERCENTAGE
RESPONESES
Very much
32
32
Some what
41
41
Undecided
Not really
10
10
Not at all
12
12
NO .OF RESPONESES
10
12
32
5
41
Very much
Some what
Not really
Not at all
Undecided
INFERENCE
It is inferred from the table that, almost 73% of the respondents have a feeling that the
easy procedures in PMJDY helped to achieve the target of 7.5 crore house holds under
the scheme. Only 22% feels that the easy procedure was not helped in achieving the
target account openings.
CHAPTER 4
FINDINGS AND CONCLUSION
LIST OF CONTENTS
Chapter No.
1.
Title
Page no.
INTRODUCTION
1.1 Introduction
11
13
15
16
17
17
18
19
Theoretical Framework
20