The decision to treat the expenditure incurred by the banks to popularise the Pradhan Mantri Jan Dhan Yojana (PMJDY) as part of their corporate social responsibility (CSR) is a welcome step. The banks had spent money on setting up camps to reach out to a large section of the people within a few days of prime minister Narendra Modi announcing the scheme from the ramparts of the Red Fort on Independence Day. The expenditure yielded rich dividends, as could be gauged from the fact that the banks could open 3.2 crore bank accounts within the first 12 days of its launch. It is a world record which no country will ever be able to match.
True, it is a relaxation in the norms of address verification that allowed the banks to enrol so many new account holders. The criticism that in doing so the banks have allowed many fraudulent people to open accounts is baseless. The new accounts are linked to the biometric identity cards of the account holders and this itself rules out fraud. The banks have also been given time to verify the address details and, if necessary, seek more supporting documents. Of course, allowance has to be made for the fact that if so many people have remained out of the banks’ ambit so far, it was mainly because opening accounts was so cumbersome with the applicants having to submit multiple proofs.
The fear that the new accounts will be a drain on the banks’ resources is misplaced. Every account holder is entitled to some insurance benefit for which the premium will be paid by the government. As regards the maximum overdraft facility of `5000 the accounts come with, the banks will decide on the basis of the account holder’s creditworthiness. The success of the yojana will depend on the Centre’s ability to quickly streamline most, if not all, subsidies and transition them to an Aadhaar-based direct transfer system. It will not only enthuse the banks and the account holders to keep the accounts active but also save a lot of money pocketed by the intermediaries.