Prime Minister Narendra Modi on Thursday unveiled the Pradhan Mantri Jan Dhan Yojana across 76 centres across the country. On the occasion, he spoke to the nation from New Delhi’s Vigyan Bhawan.
Here are 10 key highlights from his speech:
1. Earlier, the poor took loans from sahukars at interest rates eight times more than the bank. The burden of these loans drove them toward suicides. Now, the loan taker will be free from the vicious circle of high-interest loans.
2. Financial untouchability is a woe. But now, a poor man can go to a hotel and use his debit card to settle his bill, just like any other person.
3. Why wait till 2015 to launch this programme? The finance ministry has promised to complete the project by January 26, 2015.
4. Financial inclusion is the prerogative of the government. Through Jan Dhan Yojana, the poor man will have money on his hand and the government will be directly responsible for it. This is not a mere bank account, but has other benefits including an RuPay debit card and insurance benefits. He said the account performance would be monitored and overdraft facility would be given. The Prime Minister said he had sent 7.25 lakh bank employees, exhorting them to help reach the target of 7.5 crore bank accounts, and bring freedom from financial untouchability.
5. Corruption will be negated with the direct deposit of welfare money into the poor man’s account.
6. Saving is a virtue for Asian societies, where people like to save money rather than spend it. These bank accounts will strengthen this virtue.
7. On this occasion, let me recall a story from my life. Once, when I was living in rural Gujarat, people from Dena Bank came to my village. Mr Vohra or someone with a similar name. He told us about the virtues of opening a bank account and saving money in piggy banks. I also opened an account, but my piggy bank never materialised. Then it happened that I left the village to go on my onward pursuits. But the bank people kept looking for me after I left. They wanted to meet me to have my account closed, because it had to carried over for renewal every year, and inactive account could be closed only with the owner’s consent. Finally, they traced me to get my account closed and were freed of the burden. That was a time when we persevered to close an account. Today we are persevering to open bank accounts.
8. People opening accounts by January 26, 2015, will get up to Rs 1 lakh accident insurance cover, and an additional Rs. 30,000 life insurance cover.
9. Opening of bank accounts of 1.5 crore people is a big record in the banking history
10. I thank the people of the banking sector for taking up this task, and promising this to be done by January 26, 2015.
What is Pradhan Mantri Jan Dhan Yojana?
The scheme, which envisages every account holder gets a Repay debit card with a Rs.1 lakh accident cover, will see the nationalised banks target opening of one crore bank accounts.
“There is an urgency to this exercise as all other development activities are hindered by this single disability,” he had said in a Twitter post.
By paying benefits directly into bank accounts, the scheme would seek to cut waste and corruption that inflate India’s $43 billion subsidy bill, equivalent to more than 2 per cent of its GDP, for handouts of grain, fuel and fertiliser.
The push for greater financial inclusion would also diminish the influence of moneylenders and other informal financing channels who operate outside the ambit of the Reserve Bank of India (RBI), blunting its monetary policy tools.