Telangana: 40 per cent of PM's Jan Dhan Yojana accounts have zero balance

Hyderabad: Over 25 lakh people or 40 per cent of Prime Minister’s Jan Dhan Yojana scheme accounts in Telangana do not have any balance.

While 76 lakh accounts were opened in the state, 25 lakh have zero balance, which means that these account holders will not get the promised insurance cover and overdraft facility.

The financial inclusion scheme was launched to encourage the country’s vast unbanked poor to use bank accounts for cash transactions. Prime Minister Narendra Modi had launched the scheme across the country in August 2014. Banks have to lend a cumulative Rs 5,000 to each account holder, but hardly any bank is doing so.

Public and private sectors banks have raked in nearly Rs 708 crore so far from the remaining 51 lakh account holders in TS, but they are shying away from extending loans.

Under the scheme, on opening a bank account, holders are initially eligible for an overdraft facility of Rs 2,000, which can be extended up to Rs 5,000 based on the consumer’s credit and transaction history.

Account holders will also get a RuPay debit card with an accident cover of Rs 1 lakh. The negligence of ba-nks in creating awareness among account holders on the need to save is being cited as the reason for such a huge number of zero balance accounts.

The regional office of Reserve Bank of India (RBI) in the city, which reviewed the Jhan Dhan scheme with ban-ks recently, expressed anger at the negligence of the banks.

An RBI official said, “Banks are supposed to conduct financial literacy camps frequently to create awareness among Jhan Dhan account holders on the need to save and use their accounts for transactions. It was found that none of the banks were doing it regularly. The Reserve Bank has directed banks to conduct such camps once a month in all branches.”

However, bankers are blaming the state government for zero balance accounts claiming that unless the government supported the scheme by involving public representatives, it would not be possible to conduct such camps and achieve the desired results.