Imagine opening 15 million new bank accounts being opened in a day. The Narendra Modi government’s much-touted idea of universal bank accounts and ending “financial untouchability” has turned real with the big-bang launch of Modi’s pet project for financial inclusion, the Pradhan Mantri Jan Dhan Yojana.
Banks across the country opened a record 15 million accounts, against a target of 10 million, on the first day of its launch August 28. The ambitious programme aims to bring banking facilities to 75 million households by January 26, 2015 – 150 million bank accounts are expected to be opened.
The prime minister announced a slew of initiatives to make opening bank accounts more attractive, including a life cover of Rs 30,000 for all those opening bank accounts by January 26. In addition to the Rs 100,000 accidental insurance benefit already available under the account that will come bundled with a Ru-Pay-enabled debit card.
Customers will also be provided an overdraft facility of Rs 5,000, subject to satisfactory operations of the account for at least six months.
“Banks have assured me they will do this work before January 26. Those who open accounts by January 26, 2015, over and above the Rs 1 lakh accident, they will be given life insurance cover of Rs 30,000. This will help the poor families,” said Modi
“I believe when a person opens a bank account, he or she takes the first step to get connected with the economic system. Today, the 1.5 crore families which got connected with the economic system will give a boost to the economy,” added the prime minister.
Modi added that the irony of India’s economic system was that while it was easy for the rich to get loans at low interest rates, the poor are forced to borrow from moneylenders at five times that figure.
The financial inclusion programme is expected to help socially uplift the poor, and give them an additional insurance cover.
The programme was launched with much glitz as several union ministers and 20 chief ministers simultaneously launched the scheme at 600 programmes and 77,852 camps across the country.
According to reports, State Bank of India, the country’s largest bank, opened 20 lakh new savings accounts on August 28 through 10,000 camps held across the country, while Union Bank of India opened 5 lakh accounts. Bank of Baroda also opened more than the targeted 10 lakh accounts.
The Modi government has made a push for the financial inclusion through e-banking services, and on August 28, he also launched a mobile banking facility on basic phones. This facility will enable customers to transfer funds and check the available balance using any handset, through the SMS platform. Access to banking facility and ending poverty go hand in hand, asserted Modi.
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