Dec 012015

The shocking drawbacks and issues with Jan Dhan Yojana

One of the most ambitious projects taken up by the central government of India in the year 2015 is the Jan Dhan Yojana. The scheme is actually aimed for opening bank accounts for all the inhabitants of India and also to remove the bank untouchability completely. It can be said to be a move towards the nation’s biggest financial achievement but at the same time, it has been reported that this Jan Dhan Yojana can cause different issues and challenges for both the individuals and government in the future. A huge number of farmers, who are not properly educated, do not understand why the government wants to open the new bank accounts or how they are going to access the overdraft and many other facilities.

The shocking drawbacks and issues with Jan Dhan Yojana

Increased accounts but not transactions

This is undoubtedly a huge task and a lot of bankers feel that this project is going to drain a lot of resources of the already economically affected industry. There are a few points that are not in favor of the inhabitants of rural areas. For instance, the insurance coverages on the name of the account holder are linked with the transaction history of the account holder. People in rural areas in most of the times, do not have any major transaction records to show and this can inhibit the insurance coverages. There are a lot of instances that a huge number of accounts are just frozen because of no transactions since a lot of account users are there who are really poor to have the income of making bank transactions. And thus, the re-activation of old accounts takes several weeks or months. The number of accounts might increase in banks, but it cannot be said that there will be any increase in the number of transactions.

False overdraft facility

Coming to the “overdraft facility” factor, it needs to be mentioned that initially, while the opening of the bank accounts, it was mentioned that this facility meant, the government shall provide Rs 5000 in the newly opened bank accounts as a mark of subsidy. But this was not the scenario. The people who opened the new account did not get the overdraft or subsidy amount. Thus, this overdraft facility offered by the present government seems to be a false facility for a lot of people who have opened the account and this can be said to be a major reason, the Jan Dhan Yojana might fail.

Consider the logistics before

A lot of blames have been put on the factors like the rural areas do not have proper connectivity, electricity, internet and the ATM facilities. This results in the improper activation of the RuPay cards issues by the government since those cards need to be activated in ATMs. The PIN numbers of the card becomes useless since it reaches a long time after it should be activated. Account activation requires these factors. It cannot be denied that there are such issues but while conducting the project of Jan Dhan Yojana, these factors were necessary to consider before taking up the project.

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