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Jan Dhan Yojana’s real test

MY LETTER IN BUSINESS STANDARD TODAY (09.09.2014)

Following is the HIGHLY edited version of my letter on JDY….

Jan Dhan Yojana’s real test

In his column “The inclusion triangle” (Muddy Waters, September 8), Subir Gokarn has lucidly brought out the high and low points of the Jan Dhan Yojana. The real challenge will be to keep the accounts alive, fund the overdraft mechanism and clarify doubts on the insurance cover. Moreover, the financial viability of running millions of such accounts will depend on the minimum balances maintained and number of transactions carried out in a year. In the past, many such accounts were opened but are now dormant. Getting the holders to use these accounts and ensuring that other players of the triangle stay within the system are two sides of the same coin. JS Broca, New Delhi

THIS IS WHAT I HAD ACTUALLY WRITTEN

Dear Sir, This refers to your article “The Inclusion Triangle” (BS 8TH Sept 2014) by Subir Gokran, the former Deputy Governor of RBI.
The learned author has very lucidly brought out the high and low points of the recently launched “ Jan Dhan Yojana (JDY)”, by the new but now over 100 days old Government, with the sole purpose of giving a big push to financial inclusion of the un-banked sector of society and ending its so called ‘ financial untouchability ’. All said and done, the real challenge will be of keeping the accounts alive, funding the overdraft mechanism and clarifying doubts related to the insurance cover. Moreover, the financial viability of running millions of such accounts will depend on the minimum balances maintained and the number of transactions carried out in a year. In the past, a vast majority of such accounts opened, are now classified as ‘dormant’ and were unused since the time they were opened. Getting account-holders to use these accounts and ensuring that the other players of the triangle, stay within the system are two sides of the same coin. Whether the scheme proves to be a game changer or not, remains to be seen in near future. Let us hope that this financial inclusion triangle does not become a “Bermuda Triangle!”

J S BROCA, Retired Chief Manager, Bank of India, New Delhi