Life Insurance Corporation wants the Government to bear the premium cost involved in providing ₹30,000 life cover for each beneficiary of the Pradhan Mantri Jan Dhan Yojana (PMJDY), the flagship financial inclusion scheme launched by Prime Minister Narendra Modi.
While the insurance behemoth has agreed to extend life cover, it has conveyed to the Finance Ministry’s top brass that it is in no position to bear the premium cost, sources close to the development said.
Even a premium as low as ₹100 for every life insurance contract with a sum assured of ₹30,000 would mean an outgo of at least ₹750 crore, a rough calculation shows.
This is because the Government wants to open at least 7.5 crore basic bank accounts for un-banked families by January 26 next year. The Modi administration is keen that each un-banked family has at least two accounts (including one for a woman member of the family).
Apart from a basic bank account, a beneficiary will get accident cover of ₹1 lakh under the programme. The premium bill for the accident cover will be borne by the National Payments Corporation of India and the cover, by HDFC Ergo.
Meanwhile, Financial Services Secretary GS Sandhu on Wednesday reviewed the implementation of the scheme with top executives of all the public sector banks.
Good startThe scheme got to a flying start with 2.5 crore accounts opened on the launch date of August 28 and subsequent few days. The main draw to this financial inclusion project has been the free accident cover that was being bundled with the Rupay debit card.
The Prime Minister's move to add life cover for the beneficiaries sweetened the deal for the un-banked families, say bankers.Moreover, the Finance Ministry’s “camp mode” strategy paid rich dividends. About 78,000 camps were organised across the country on August 28 to enable enrolments.