Dormant and Multiple accounts

This result has been shown by a survey conducted by MicroSave under which 42 districts (from 17 states and 1 union territory) have participated. Some of the accounts have been duplicated since there is a misconception among the masses that these accounts will give people extra subsidy and benefits.

It turns out that duplication of accounts under the Jan Dhan Yojana is a major problem. RBI Governor Raghuram Rajan had expressed his concerns over the same previously – stating that the PMJDY will be a failure if people’s accounts lay dormant or if people were to create duplicate accounts.

Dormant and Multiple accounts

Dormant and Multiple accounts

  • MicroSave has been following the PMJDY by conducting surveys in three rounds. The first wave of survey was conducted in December 2014, while the second wave culminated in June 2015.
  • During this period it came into light that as many as 31 per cent of the account holders with PMJDY were already using bank accounts. In fact, these 31 per cent of the beneficiaries were using multiple accounts.
  • The survey said that “Customers believed that these accounts will remain active at zero-balance also and there was not much of trigger observed to use them.”

The presence of these multiple accounts is extremely harmful to the program as this will prohibit those who really need the help of this program, from getting benefitted by it. Dormant accounts on the other hand will be bad for the economy since the banks need some fund to be up and running. The deposition of funds will; affect the liquidity of the entire economy and therefore this is a concern not limited to just a handful of people.

Present challenges

While the deposits in the accounts have already crossed the 30,000 crore mark, the growing concern is that the accounts are either unused or multiples accounts are being created.

The experts are now of the view that the architects of this scheme (PMJDY) must now look at the different loopholes in it. Unless the different facets are considered and fixed, these problems are going to create problems for our economy.

The unused accounts could be linked to the disorganization in the banks. The poor people are not aware of the regulations of the banks and are often not adequately educated to do so. The rules and regulations of the bank are therefore thrust upon them. To check the causes of unused accounts, Banks and the government have to do a thorough investigation. ‘

A gist of the whole issue:

Serial no. Incidents in a gist Points to be noted
1 The survey 42 districts across the nation were surveyed
2 Dominant and multiple accounts 28% of the accounts lie dominant while 31% have duplicate accounts
3 Present Challenges The accounts if not used, will be a waste of resources.

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