PMJDY – Making numbers work and engaging masses





PM Narender Modi’s PMJDY scheme reached out to the Guinness book of records which is fantastic. The government’s motive of bringing financial inclusion is a fillip with PMJDY, with more than 125 million new bank accounts being opened from August 2014 to January 2015; a big enough number to make a pat on the back. But on analysing the numbers I am astonished to see that 72% of these accounts have zero balance. There is another stat which baffles me, which is that according to World Bank 43% of bank accounts in India are dormant, what can be the plausible reasons for such high dormancy. How can we increase the activity of people in banking? Merely opening a zero balance account won’t help in solving the problem of financial inclusion. People should also use the facility.

A recent article in The Hindu by Ms. Jayshree Venkatesan dated 17th August 2015, describes how a poor maid was denied banking facilities even under PMJDY. This is not a lone case but lot of poor are denied new accounts or are not treated with dignity when using their accounts, therefore high dormancy of bank accounts. A second reason for high dormancy can be that banks are open only during work hours; taking time off from work is difficult for most poor people and thus availability of banking facilities is a problem. 

So what can be the solution; a solution which not only offers availability, ease of use but also doesn’t discriminate. This is where I see the role of digital banks coming in because a human may discriminate but technology will always be fair. There are many internet companies facilitating digital payments and wallet and PayTM is a leading company in this sector. Few days back PayTM was granted the payments bank license this will bring them one step close in the direction of setting up a digital bank. But at the same time digital banks must realise that to succeed and drive masses to participate they will have create an omnipresent ecosystem of Online-Offline channels where offline channels can serve as point of deposits into the digital wallet and the Smartphone will be the point of consumption. Recently SBI launched its digital wallet app; soon other banks may also launch their wallet apps to keep up with the competition. But can the redundancy in effort of creating similar wallets be reduced by collaboration and partnerships. Can we see a PNB-PayTM or a HDFC-PayTM collaboration to improve lives of many Indian people who would like to participate in India’s growth?

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