Nearly ₹120 crore have been taken by bank account holders as overdraft under the Pradhan Mantri Jan Dhan Yojana (PMJDY).

With repeated prodding by the government, banks had disbursed ₹11,825 lakh to 8.37 lakh account holders under the scheme as of October 30, according to Finance Ministry data.

In the past banks had often shied away from providing the facility over repayment concerns. To encourage banks to provide an overdraft facility to subscribers, the Reserve Bank of India had in February also included the funding as part of priority sector lending targets.

An overdraft facility of ₹5,000 under the PMJDY is available to one of the earning (preferably a woman) account holders in each family after six months of satisfactory transactions.

Big jump

This is a significant jump since August when just about 1.64 lakh account holders had availed the overdraft. Of the total of 19.13 crore accounts opened under the PMJDY since August 2014, the overdraft facility is now available in 43.31 lakh accounts and had been sanctioned for 22.43 lakh accounts by October 30.

The data reveals that Punjab National Bank disbursed the highest amount as overdraft — ₹27.79 crore to 98,683 account holders by October 30 — followed by Bank of Baroda, which disbursed ₹20.68 crore to 88,215 account holders.

However, some banks, including City Union Bank, Federal Bank, IndusInd Bank and Kotak Mahindra Bank had not disbursed any funds in the period.

“We are monitoring the progress of the overdraft facility as it is one of the main tools for financial inclusion. We have been talking to banks and expect that in the coming months more account holders will use the facility,” said a Finance Ministry official, adding that the facility has now been automated.

The Department of Financial Services in the Finance Ministry had also taken it up with banks, pointing out that the progress was very poor.

“…it has been requested by some State Governments to consider automation of the Overdraft facility based on transaction record so that this can be easily availed by a customer through … on-line or ATM mode,” it had said in a recent note to banks.

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