PM Jan Dhan Yojana (PMJDY)
Days after the launch of Prime Minister Jan Dhan Yojana, appreciations and criticisms have started pouring in from various people and political parties. The Yojana, as claimed by the government is a step to improve the financial conditions of the poor and thus alleviate their living standards.
The day, 28th August 2014 would be recorded in the economic history of India when a record of 1.5 Crore accounts were opened in a single day. That was something great that PM Jan Dhan Yojana gave to the country, acting on the announcements by the Prime Minister Narendra Modi on Independence Day 2014, while addressing the nation from New Delhi.
The scheme is said to benefit almost every person in many ways, as claimed by the government. It is said that this scheme is ambitious in nature and the government is bound to provide every household atleast a bank account along with minimum insurance cover of a lakh.
When more than forty per cent of Indians live their lives on less than a dollar per day, this kind of scheme is said to alleviate their financial standings and security.
The scheme, as claimed, would minimize the role of money lenders in the lives of poor, who till now did not have access to banking services. It aims at providing the facility to poor traders who were earlier not able to borrow small money from banks that thus had to fall prey to unorganized money lending system.
One of the major limitations that PM Jan Dhan Yojana may come across is the retrieval and collection of loans. The borrowers are primarily going to be low amount borrowers and would often come from unorganized segments of society and profession.
It might be a little difficult for the banks and the system to keep a track of the borrowers and thus they may end up in losses. It is however yet to be seen how banks cope up with this opportunity and still be a source of the right financial change, as aspired by the Yojana.
The idea of Universal Banking facility is not really new in Indian financial reforms systems, however the approach has constantly failed to provide tailor made services to the poor, at times due corruption and often due to the inefficient system itself.
At the same time, the overdraft facility being claimed under the PM Jan Dhan Yojana is something worth concerning. If there are no sound mechanisms to collect the repayments from the borrowers, the scheme may well lose its purpose and thus such accounts would become dormant.
Last but not the least, if repayments are not mechanized efficiently, it may have a swelling loan burden on Indian banks and would thus impact the financial system altogether.
We all hope that the new scheme brings the projected benefits to the needy sections, for which the entire system and scheme has been created.
Government have come up with many financial schemes that are attached with PMJDY. Some of them are