‘ Financial burden won’t be on banks’

Finance minister Arun Jaitley said on Saturday that under the ambitious mega financial inclusion scheme of NDA government Pradhan Mantri Jan Dhan Yojana ( PMJDY) around 2.14 crore accounts have been opened. Finance ministry said that the scheme will not put financial burden on the banks and makes a “reasonable business case for them.”

“First of all let me tell you that banks are not going to bear the costs and there is already a separate financial mechanism. I have seen some write ups which are not accurate,” Mr Jaitley said.

The scheme was launched by Prime Minister Narendra Modi on Thursday envisages to open bank accounts for 7.5 crore families by 26th January 2015.

“Any apprehension that this scheme may cause financial burden on the banks does not hold any ground as PMJDY makes a reasonable business case for the banks and there are enough safeguards inbuilt,” said a finance ministry statement issued later on in the evening.

It said that experience of certain banks was looked at and it was found that financial inclusion makes a reasonable business case for the banks due to CASA deposits (( current and savings account, which are considered cheap source of raising funds for the banks) from such accounts.

“Over and above this, PMJDY makes the infrastructure ready for direct benefit transfer ( DBT) schemes to be rolled- out quickly. This will improve governance and plug leakages. In principle approval of 2 per cent commission to be paid for DBT Scheme has already been granted,” said the finance ministry.

It said that at present accidental insurance scheme of ` 1 lakh to each account holder, is part of the RuPay Debit Card.