Having opened over 12 crore Jan Dhan bank accounts under its flagship financial inclusion programme, the government is now mulling over ways to step up the utilisation of these accounts, including through POS transactions and the Business Correspondents.

A meeting has been called by the Finance Ministry on Tuesday, April 7, of representatives from public sector banks and the business correspondents (BCs) of the banks, who can help in last-mile implementation of the inclusion efforts.

Among other matters, the meeting would deliberate on issued faced by the business correspondents and banks in their operations, including with regard to remuneration, technical support and the required incentives.

Earlier last week, Prime Minister Narendra Modi had said at a function to mark RBI’s 80 years that as much as Rs 14,000 crore has been deposited in Jan Dhan accounts and the challenge now will be to increase the transactions.

The scheme offers free zero-balance bank account with a debit card, a Rs 1 lakh accident insurance policy and Rs 30,000 free medical insurance cover for the poor. In his Budget speech, Finance Minister Arun Jaitley had said that over 12.5 crore bank accounts had been opened under the scheme in just nine months.

However, concerns have been raised in some quarters that a large number of people are not transacting through these accounts, although the government has been passing on subsidy and other benefits to them.

Anand Shrivastav, Chairman, Regulatory Affairs Committee, Business Correspondents Federation of India (BCFI), which will be attending the meeting, said that the underutilisation of the Jan Dhan cards is a result of several factors.

“The solution that we will be discussing revolves around the fact that the BC Networks or Bank Mitras under the BCFI need to be formally recognised as a self-regulating- organisation and their remuneration fixed that is economically viable.

“At present a single ATM withdrawal would cost a bank Rs 15-20 per transaction whereas Bank Mitras/BCs receive inadequate remuneration for their services. Due to the relatively poor ATM network in rural areas, there is virtually no place to withdraw or swipe the cards by the financially excluded strata who are issued Jan Dhan cards.

“Unless the government fixes these problems and addresses the structural limitations faced by BC Network Managers we will be away from achieving efficiency under the PMJDY scheme,” he added.

Among others, it is being proposed to increase the cash withdrawal limit at Point of sale (POS) from Rs 1,000 to Rs 5,000 per transaction.

It has also been suggested that all banks should enable cash at POS which is allowed only by few banks and that too only for the debit cards issued by the respective banks.

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