Jan Dhan Yojana Case Study

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Jan Dhan Yojana- challenges in execution

Story :Jan Dhan Yojana the biggest financial inclusion drive.

The Purpose
Jan Dhan Yojana - the prime minister's biggest project to ensure financial inclusion of households in India was started with an idea to provide 'Universal access to banking facilities'.

The Problem
Pradhan Mantri has given a target of 7.5 crore bank accounts to be opened by banks. Raghuram Rajan, the governor of Reserve Bank of India identifies the challenges and cautions banks in which he regulates to be careful about the 'Jan Dhan Yojana'. He warns that aspiring people can open multiple bank accounts with different identities . Another area of concern is the growing perception of public , as mentioned in various media
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5000 to be provided after six months of satisfactory performance in phase II. Rajan cautioned banks against running on 'Jan Dhan Yojana' numbers, but this scheme infact helped banks with lack of funds collected over 370 crore deposits from over 4 crore first time account holders. This is moving at a faster pace so as to reach the prime minister's target to banks of opening 7.5 crore accounts before january 26,2015. But, not only the numbers are important but also the number of genuine people who are benefitting out of the …show more content…
Out of the 246 million households , 144 million have access to banking . RBI figures show that there are over 900 million deposit accounts in India .This suggests that many households have multiple accounts. So, it will be a challenge for this scheme to handle this issue.

Economics behind the Scheme
The scheme is evolving. It even conflicts with the payment banks , its target is to reach the unbanked customers. It was recommended to give incentives to financial inclusion .It is the economics of the scheme that has drawn the attention. Experts are still figuring out the monthly average balance that helps banks meet the costs. Besides that, LIC is still in process of structuring 30,000 life cover to be offered under the scheme after finance ministry asked it for the details.
The life policy is to be issued only to few people(2-3 crore) because of the following reasons
• Those who come under the age of 18 -59 can avail the life policy offered by LIC under the scheme
• It is open for only those who have their Aadhaar cards.
So, as it is limited only to few people there will be urgency among people in opening the accounts.

Ease of

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