Friday, October 31, 2014

Get account holders under Jan Dhan to use RuPay card, FinMin tells banks

To get customers opening accounts under the Pradhan Mantri Jan Dhan Yojana to use their RuPay debit cards, the Finance Ministry is believed to have asked banks to take a carrot-and-stick approach.
So, to remain eligible for the ₹1 lakh accident insurance cover that comes with the Basic Savings Bank Deposit Account (BSBDA), the cards may have to be used at least once in 45 days.

At a recent meeting, Finance Ministry mandarins told top bankers that mere issuance of cards will not suffice. The cards have to be activated at the earliest and made operational. 

Ministry officials said that customers have to be advised to operate the cards at a certain time interval, say, once in 45 days, in order to continue to enjoy the accident insurance cover without any charge to them.

Banks were also advised to have an “SMS” alert system for BSBDA beneficiaries so that they use the RuPay card once in 45 days and remain eligible for the accident insurance cover, said a senior official of the Union Bank of India.

RuPay is the home-grown card payment scheme launched by the National Payments Corporation of India (NPCI) to rival global payment processing giants Visa and MasterCard. 

It has been conceived to offer a domestic, open-loop, multilateral system which will allow all Indian banks and financial institutions to participate in electronic payments.

This card is accepted at all ATMs (for cash withdrawal) and at most of the PoS machines (for making cashless payment for purchases) in the country.

A ‘Basic Savings Bank Deposit Account’ or ‘no-frills’ account does not have any minimum balance requirement. The services available for such accountholders include deposit and withdrawal of cash at bank branches as well as ATMs; receipt/credit of money through electronic payment channels or by means of deposit/collection of cheques drawn by Central/State Government agencies and departments.

While there is no limit to the number of deposits that can be made in a month, accountholders will be allowed a maximum of four withdrawals in a month, including ATM withdrawals; and comes with the facility of ATM card or ATM-cum-debit card.

The Pradhan Mantri Jan Dhan Yojana (PMJDY), which was launched on August 28 by Prime Minister Narendra Modi, is a National Mission for Financial Inclusion. 

Financial inclusion is the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low-income groups at affordable cost 

The Yojana seeks to ensure access to financial services — namely, banking/savings and deposit accounts, remittance, credit, insurance and pension — in an affordable manner.
Banks have been set a collective first target of reaching 7.5 crore unbanked families under the PMJDY by January 26, 2015.

Sunday, October 26, 2014

We expect credit growth to pick up by end of third quarter: Bank of India MD Vijayalakshmi Iyer

Bank of India is planning to set up a subsidiary dedicated to social work, a first among its domestic peers. Amid increasing competition, the public sector lender is trying to consolidate the credit portfolio, cut expenses and focus on fee and treasury income to stay profitable. The bank is focusing on bringing down stressed assets by strict monitoring and faster resolution of cases. Vijayalakshmi Iyer, chairperson & managing director, tells Manju AB how she is steering the bank out of its bad debt problem by personally attending to large accounts. Excerpts from the interview:

What is driving business at Bank of India? With credit growth being at a decade low, how will banks beat the trend and still stay profitable?
The growth has been very low in tune with the industry trend post March 2014. This actually provided an opportunity to consolidate credit portfolio and to put more resources for monitoring mechanism. These efforts will result in lower credit cost and will improve profitability. With more focus on timely resolution of stressed assets, the profitability will, in fact, improve.

When do you expect corporate credit to pick up? And which sectors do you see reviving faster than others?
There has been slowdown in corporate credit demand. Many steps are being taken by the government to enable economic growth to assume faster pace. With pro-growth environment being created, we expect credit growth to pick up by the end of third quarter of the current fiscal. We expect pick-up in SME sector to lead.

How is the retail credit growth?
Notwithstanding lower corporate demand for credit, the retail sector continues to grow resulting in better balancing of portfolio. Focus on agriculture, retail and MSME is driving the business. Widespread geographical spread of branches is helping us growing in these sectors. During the first half of this fiscal, schematic retail loan has grown 12.21% from Rs 21,982 crore as on March 31, to Rs 24,665 crore as on September 30. The growth is 28 % year on year (Rs 19,284 crore to Rs 24,665 crore). Home loan growth has been 31% on a year-on-year basis (Rs 11,400 crore to Rs 14,913 crore). Home loan and LAP constitutes 74% of schematic retail loans as on September 30, 2014 (home loan Rs 14,913 & LAP Rs 3,424 crore). Total retail loans (personal loan segment) of the bank stood at Rs 29,654 crore as on September 30, 2014. Considering the growth pattern in the earlier years, we expect about 40% growth in retail loans during 2014-15.

What will be the key driver of your profits during the current quarter?
The deposit rates have softened in the absence of demand for credit. This will help in achieving lower cost of fund and better "NIM' (net interest margin). Initiatives have been taken to curtail operational expenses as well as to increase non-interest income. All out efforts are being made to achieve lower credit cost by improving monitoring process and also by achieving speedier resolution of non-performing assets. There are two major sources of fee income, in addition to general banking services including remittances, etc. That is (1) business related to credit portfolio and (2) fixed income portfolio. Given the softening of yields on fixed rate bonds, we do expect gains on that account to contribute to our profits.

How are your deposits growing? Any specific campaigns to mobilise CASA (current account savings account)?
It is desirable to match growth in deposits to growth in credit business. Given that demand for credit has been muted, the deposit portfolio is registering slower growth in keeping with opportunities for deployment. We are placing thrust on CASA business and special drives are being arranged across the country to expand the customer base further. Technology related initiatives are being implemented to make banking more customer friendly. The government business is also being expanded with a view to increase CASA portfolio.

How is the joint lending forum (JLF) helping the bank combat the rise in bad loans? Is the JLF being implemented in all earnestness with co-operation from all banks?
Joint Lending Forum (JLF) has been helping the banking system in early resolution of stressed accounts as RBI guidelines warrants time bound rectification process by all banks if majority of banks (75% in value and 60% in numbers) agree for any of the three options available, that is rectification, restructuring or recovery. The implementation of corrective action plan under JLF route has almost stabilised barring addressing of few issues like short period available for implementation of restructuring under CDR
on-CDR route.

Asset reconstruction companies (ARCs) say banks need to give bigger discounts for sales to happen. What has been your experience?
In fact, the role of ARCs is very important in faster resolution of stressed assets. We feel that ARCs need more capitalisation to meet the revised norms of payment of cash up-front of 15%. Admittedly, with higher cash up-front, the ARCs will have more commitment, which will lead to even faster resolution. Bigger discounts on sales will force banks to have bigger hit to their P&L.

Now social media networks like Facebook and Twitter are attempting at money transfers, printing cheque books, etc. Is there any threat to traditional banking from these alternate channels?
There is no question of threat. Innovations in technology are always welcome as they help in achieving higher level of efficiency in providing banking services. It is desirable to remain aligned with evolving technology. We have focus on IT enabled services to ensure that our customers have access to state-of-the-art technology. We were the first PSU bank to introduce first ATM long back in the country. Recently, we introduced cash remittance through ATM to non customers without use of ATM card. It has received good response. Most of our ATMs are now enabled to provide this service of Instant Money Transfer (IMT).

Banks are planning to sell off their non-core assets to streamline the organisation What would be your non-core assets that you might put on the block?
We do have strategic investments and keep reviewing the same from time to time. It is always desirable to realise gains on such investments to augment capital. It is a continuous process.

You had plans of setting up a wholly owned subsidiary for corporate social responsibility. What has been the progress of that?
With a view to have consistent approach for achieving our corporate social responsibility objectives, we have proposed formation of a trust. We have approached appropriate authorities for approvals. We are expecting approvals soon.

Will you have to raise money for Basel III compliance? Will you give some details on the fundraising plans of the bank?
We need to strengthen our capital structure to ensure consistent growth while maintain the desirable levels of capital adequacy. This is a continuous process. We are observing capital market developments very closely and have plans to raise capital at an appropriate time.

Finally, how is Jan Dhan scheme faring and how much of deposits in these accounts if at all have you collected?
Our bank has opened 28.82 lakh accounts from August 16 to October 16 under Jan Dhan scheme and collected Rs 70.07 crore deposits. The scheme is in full swing by means of carrying out household surveys in all the allotted Sub Service Areas (SSA) and wards which is expected to be completed by October 31.Number of RuPay Cards issued by our Bank so far is 17.94 lakh. The backlog is expected to be cleared by November 15. Aadhaar seeding and opening of accounts through e-KYC is picking up and we have seeded 23.48 lakh accounts and opened 11,716 accounts through e-KYC so far.

Have you also rolled out Swachh Bharat campaign?
In this national endeavour, BOI has committed Rs 4 crore for construction of toilets in government schools. The project will cover 85 girls secondary schools in Jharkhand. List of schools and districts covered in the state has already been conveyed to finance ministry, and ministry of HRD. Implementation will be done through local agencies in coordination with BOI zonal offices situated in Jharkhand.

Amazon shopping, Jet Airways booking now easy via RuPay Card

NPCI has already issued more than 30 million RuPay cards.
After Flipkart, home-grown payments gateway RuPay has tied up with Amazon and one of the largest carriers Jet Airways.

With this, the RuPay debit card holders can now shop best deals on Amazon and book air tickets on Jet Airways, the Reserve Bank-promoted National Payment Corporation which issues the RuPay cards said in a statement today.

"Acceptance on Amazon is a breakthrough for us. We are glad to offer a wider horizon to our cardholders to transact online. Also, our integration with Jet Airways will definitely benefit our cardholders,," says NPCI managing director AP Hota said.

Commenting on the tie-up, Amazon India general manager for payments Srinivas Rao said, the arrangement is in line with its strategy of offering the widest set of customers a variety of payment options that will enhance their shopping experience.

The NPCI had last week announced that it has tied up with Flipkart, Snapdeal and LIC who are among over 15,000 merchants who will be accepting the RuPay cards, which are the homegrown alternative to foreign gateways like Visa and MasterCard.

Following the tie-up Jet Airways has begun accepting RuPay cards on their site for air-ticketing, airlines’ senior vice-president Gaurang Shetty said.

NPCI has already issued more than 30 million RuPay cards, which are accepted at all ATMs, and by 9.8 lakhs POS terminals and over 15000 online merchants.

The domestic online retail industry, as per a Crisil report, is expected to touch Rs 50,400 crore by FY16 from Rs 1,500 crore in FY08.

According to online industry body IAMAI, travel has emerged out as the most transacted segment in the online space accounting for 60 percent of online payments. The value of online payments for travel industry stood at Rs 50,000 crore in FY13.

Sunday, October 19, 2014

RuPay cards to boost e-commerce, says SBI

RuPay e-Commerce has roped in big online merchants such as IRCTC, Life Insurance Corporation (LIC), Flipkart and Snapdeal to facilitate online payments. 

RuPay cards’ acceptance has grown to over 15,000 online merchants with having a customer base of 30 million RuPay cards that are acceptable at all ATMs and 9.8 lakh PoS (point of sale) and over 15000 online merchants in the country, said RuPay in a statement. 

With this arrangement, RuPay card holders can book train tickets on, make online payments for LIC premium, shop on,, and book movie tickets on Also, the country’s largest bank- State Bank of India (SBI) has started accepting RuPay cards on its payment gateway. RuPay e-Commerce service was launched in June 2013 with an additional anti-phishing feature for security checks, the statement 

“Team-SBI is quite upbeat about the development. State Bank Payment Gateway (PG) facilitates every month, around 1.3 crore Card-Not-Present (CNP) transactions. Addition of RuPay platform will give a further boost to e-commerce transactions. Flipkart is one of our active merchants. Acceptance of RuPay Card for online transactions by Flipkart will add to the transaction flow from their site to our NetBanking and PG”, said B Sriram, Managing Director at SBI. 

Sachin Bansal, Co-founder and CEO, Flipkart, said “Payments is a core area of focus for Flipkart. We are constantly looking for ways to expand and improve the payments experience on our site and this initiative with RuPay is an important step in that direction. We look forward to working with SBI and NPCI on more such initiatives that will contribute towards enhancing the payments ecosystem for our customers”. 

RuPay scheme aims at addressing the needs of Indian consumer, merchants and banks with benefits attached to it including - lower cost, customized product offering, protection of information related to Indian consumers, electronic product options as relevant to untapped/unexplored consumer segments and Inter-operability between payment channels and products. 

A P Hota, MD and CEO, NPCI said, “Acceptance on large merchants like IRCTC, LIC, Flipkart, Homeshop18, Snapdeal and BookMyShow among others marks an important milestone for RuPay ecommerce. Today, 30 million RuPay cards have already been issued in the country. RuPay cards today are enabled at all ATMs across the country, 9.8 Lakhs POS terminals and over 15000 online merchants. It is our vision to touch every Indian with at least one payment mode of NPCI by 2020”
NPCI offers e-commerce solution PaySecure, through which a RuPay cardholder uses ATM PIN to make an online transaction which is easy and quick.

Every BPL household to have RuPay card in 6 months

Speaking on the sidelines of the launch of RuPay card at GSC Bank on Tuesday, S K Gupta, chief project officer, RuPay, National Payments Corporation of India (NPCI) said that in six months, every household in the country below poverty line (BPL) will have a bank account and a RuPay card. More than 40 million RuPay cards have been issued in the country till now. "There are 2,000 licenced banks in the country. Earlier, only 50-55 banks could issue debit cards but now around 310 banks are issuing RuPay cards," said Gupta.

RuPay card which was launched 2.5 years back is fully Indian card payment network set up by NPCI. Along with a RuPay card, customer also gets an accidental insurance of Rs 1 lakh, the scheme will be valid till March 2015.

Under Pradhan Mantri Jan Dhan Yojana (PMJDY), three districts in Gujarat have achieved target of opening one bank account in each household. Porbandar, Mehsana and Gandhinagar have reported that at least one bank account of all households has been opened thereby making these areas fully saturated in PMJDY. There are 1.22 crore households in Gujarat, of which more than 95 lakh households have one or more bank accounts as of now. As on October 7, 2014, 5.52 crore accounts have been opened and a deposit of Rs 4268 crore have been mobilized under PMJDY so far.

Guj State Co-op Bank launches RuPay card

amit shah
Gujarat State Co-Operative Bank (GSC) got a new feather in its cap on Tuesday. BJP President Amit Shah inaugurated RuPay ATM and debit card at its head office in Naranpura area in Ahmadabad.
On this occasion, Shah who himself is a cooperator and had been Chairman of co-op banks in the past dwelt on the issue of cooperative movement at length.

The GSC Bank is the apex bank of 18 co-operative banks in Gujarat having more than 1,200 branches across the state. While launching the first ‘RuPay’ ATM and debit card for the bank, Shah said one should not underestimate the capabilities of such banks.

Apart from Gujarat, Shah claimed that co-operative movement is still active in many other states, such as Maharashtra, Karnataka and Rajasthan.

“I know the strength of co-operative movement. This newly launched RuPay card and ATM is just a beginning. Looking at the sheer size and reach of this sector, I am sure that within next 5 years, debit cards issued by co-operative banks will be highest in India,” he said.

Jan Dhan scheme goes against KYC norms, is time bomb for banks

Do not get me wrong. I believe financial inclusion is a wonderful initiative and everybody should have access to a bank account. The concern I have is how this should be done.

Shortly after the budget, on August 28, the Jan Dhan scheme was announced. Its purpose was to make opening a bank account attractive and thereby to coax individuals who do not have a bank account to open an account. As sops there were several inducements – the account could be opened with no deposit; accident insurance of Rs 1 lakh; life insurance cover of Rs 30,000; an overdraft facility of Rs 5,000 and a RuPay debit card to withdraw money.

Banks were asked to promote Jan Dhan, and in the first ten days a mind boggling 3 crore accounts were opened. By October 7, 5.52 crore accounts had been opened.

My concern stems from various factors.

The first is that the account can be opened with just two signed photographs. An individual does not have to submit PAN card or Aadhar card or any other documentation. My concern here is two-fold. This submits that no real verification of an individual is required and that goes against the purpose of the Know Your Customer (KYC) rules that were brought in to check money laundering and terrorist activities.

Earlier before these rules were enforced individuals opened accounts in fictitious names to "bank" their black money. The other worry is that individuals will have multiple accounts in different banks which they may then misuse for the benefits under the scheme. The one-page account opening form has a column seeking self-declaration that a person does not have any account in any bank. This self-declaration is meaningless as there is no mechanism to stop multiple accounts. Furthermore there is no inter-bank arrangement to stop duplication.

Bankers agree that accounts opened without a valid address proof are high risk. They are unable to do anything though in this regard as the scheme permits accounts to be opened with two signed photographs.

The Prime Minister after announcing the scheme wrote to the chairmen of all public sector banks to aggressively open accounts – the target given was 7 crore accounts. The large number of accounts opened is testimony to the enthusiasm displayed by these worthies. State Bank alone opened 11,300 camps solely to open Jan Dhan accounts. Others were not far behind. There have been 12-hour Saturday camps and account opening Sundays. The issue that needs to be addressed is whether banks can service these accounts. Service in some of the large public sector banks are often found wanting. The infrastructure does not exist to handle this volume. No one seems to have addressed the issue on banks expect to manage this.

In the initial years of bank nationalisation, public sector banks were given targets that had to be met. There were loan melas held and large amounts were disbursed. These ended up as bad loans as the recipients viewed these loans as a right. I remember a public sector banker who told me that he was told that he should disburse amounts to farmers for digging wells. In this endeavour he would meet villagers who had land and force them to take money to dig wells they did not ask for.

The aim was to meet the target. More often than not the money was spent for another purpose as no follow-up was done and in time they became bad debts. I foresee a situation that is similar. Many will run up an overdraft of Rs 5,000 and then disappear off the grid or open another Jan Dhan account at another bank and in time run up another overdraft. Public sector banks labouring with huge non-performing loans cannot afford to be saddled with another potential time bomb. I foresee too that even though bankers may say that all will not be permitted to run up an overdraft, there would be political pressure that will be brought to bear and bank managers may have no alternative.
I honestly hope these concerns do not become a reality but I am frightened. We, as a race, have a tendency to subvert even the best of intentions and financial inclusion is a good thing.

Thursday, October 9, 2014

Jan Dhan Yojana: Delay in issuing RuPay cards may block benefits

After the initial euphoria over Jan Dhan Yojana, operational difficulties are casting clouds over the execution of the ambitious financial inclusion scheme. 

The most serious concern for the government is delay in issuing the RuPay cards by banks after opening of the accounts, apart from significant duplication of the accounts. 

“These are the issues which have been observed by us nationally. Proper data on the issue of RuPay cards should also be maintained,’’ N Srinivasa Rao, Director, Ministry of Finance, said at a bankers’ meeting here last week. 

According to the Ministry, 5.29 crore bank accounts were opened as on October 2, 2014 and 1.78 crore RuPay cards have been issued. It had also asked all banks to set up exclusive grievance cells to provide service to the account holders. 

Without the issue of Rupay cards, the assured benefits such as RuPay card offers and personal accident insurance and permanent disability of ₹1 lakh cannot be extended to the accountholders. 

Supply constraints

When contacted, M Anjaneya Prasad, Executive Director, Syndicate Bank, said that a major reason for the delay in issuing RuPay cards was supply constraint.

“As every bank is opening new accounts, there is lot of demand for the cards which have to be issued by the National Payments Corporation of India. The supply needs to be augmented as about 10 crore cards have to be issued by 2015 for the new accounts holders,” he said.

According to senior executive of Canara Bank, there is also need to work out the cost aspects of the cards. As of now, ₹1 is being charged for the card, which is borne by banks. 

The total number of banks issuing RuPay cards is now more than 250 and the card base as on April 30 is over 17 million and is growing at a rate of about 3 million a month. 

“This will go up significantly, thanks to the new scheme,” he said. 

Duplication of accounts

Another issue for banks is duplication of accounts as many no frills accounts were already opened under financial inclusion drive so far. 

Banks are hoping to deal with the issue with seeding of all accounts to one Aadhar number so that all could be linked.

It remains to be seen how the knotty issues are dealt with in the days to come.

5.29 crore accounts opened; 1.78 crore RuPay cards issued under PMJDY

"As on date, 5.29 crore accounts have been opened under PMJDY, of which 3.12 crore are in rural and 2.17 crore are in urban areas. RuPay Card have been issued in 1.78 crore accounts," an official statement said.

Prime Minister Narendra Modi had launched this ambitious scheme of financial inclusion on August 28.

The benefit of Pradhan Mantri Jan Dhan Yojana (PMJDY) can be extended to existing account holders without opening a new account.

The statement said Mission Director and Additional Mission Director reviewed the progress in implementation of PMJDY with Executive Directors of PSU banks and some of the private banks such as Axis Bank, HDFC Bank, ICICI Bank and IndusInd Bank.

It said banks have been advised to increase their capacity to issue RuPay cards and clear the backlog quickly.

While most of the banks expect backlog to be cleared by October 15th, in some banks it may take four weeks, it added.

Banks have initiated the survey work for identification of uncovered households which will be completed by October 10. This is excluding the states of Haryana and Maharashtra where
survey work has been temporarily suspended in view of Assembly Elections, the statement said.

The main features of the PMJDY scheme include Rs 5,000 overdraft facility for Aadhar-linked accounts, RuPay Debit Card with in-built Rs 1 lakh accident insurance cover.

Besides, account holders under the scheme will get life insurance cover of Rs 30,000. This is an additional benefit that was announced by the Prime Minister during the launch of the scheme.

The government is also considering transfer of kerosene oil and LPG subsidies directly to bank accounts.

Presently, the government subsidies the products so that consumers can buy fuel below market price, however, under direct benefit transfer the consumer will be paid cash subsidy so that he can buy kerosene and LPG at market price.

Jan Dhan target to be met, on paper


Enquiry about a Jan-Dhan account form at a Bank of Baroda branch in the National Capital Region (NCR) was greeted with: but don't you have an account in any bank? After 10 minutes, the form did eventually come, with a stare that had 'why burden us with another account that is going to remain idle' written all over it.

Just a few kilometres away, one of the branches of IDBI Bank had run out of forms. An executive explained that since there was a huge pile of forms yet to be processed, it had been decided to go slow in opening new accounts. A nearby United Bank of India branch is yet to issue RuPay cards to some customers who opened their accounts nearly a month ago. One such customer said: "Bank officials were clearly in no mood to open our accounts in the first place. We were asked to come some other time. When we persisted, they went through the motions. But we are yet to receive anything."

  • 47,630,652 - Number of new accounts opened
  • 13,303,975 - Number of RuPay cards issued
  • Rs 3,226.97 crore - Balance in accounts
  • 36,574,947 - Number of zero balance accounts
Status as on September 23 Source: Ministry of finance

As the Jan-Dhan scheme completes a month since its official launch, reports coming in from various parts of the country suggest the stated target of 75 million new accounts will be achieved much before January 26 next year. But the scheme's implementation is patchy. Agents are charging commissions for filling forms in Bihar. Reports indicate in Madhya Pradesh and Uttar Pradesh, stationery shops are selling forms as bank branches have run out. "These reports are not baseless. Some of these things are happening. But an overburdened banking system cannot be expected to do everything," said an executive with a leading public sector bank (PSBs).

In terms of numbers, the scheme has exceeded expectations. By September 23, all banks put together had opened 47 million new accounts. RuPay cards have been issued to 13 million people. Of all accounts opened in less than a month, 36 million are zero-balance ones.

Bankers this reporter spoke to complain they are flooded with inane queries. What are the benefits of this loan scheme? When will the insurance money come into the account? How much loan can be taken against this account? Can insurance money multiply with multiple accounts and can the RuPay card serve as another proof of identity? "With such a deluge of questions every day, two executives of a bank branch, on an average, are entrusted with the task of dealing with them," said another bank executive. It was bound to have some impact on core banking operations, he added.

The less-than-enthusiastic response of bankers stems from the fact that most branches have been asked to hold 12-hour camps every Saturday. At times, staff are made to come in on Sundays to ensure satisfactory completion of targets. "Even if we take the help of business correspondents, verification of documents and processing of forms have to be done by bank staff. There is a limit to how many forms can be processed in a day," said another executive with a PSB.

Bankers also say multiple accounts might prove a spoiler. "I will say 50-60 per cent of all the accounts that have been opened under the Jan-Dhan scheme are by those who already have accounts in other banks," said the executive of the leading bank. Other bankers concurred. In fact, this reporter came to know about a person who opened a new account under the scheme in the branch where she already had an account. "What is wrong in this? If there is a new scheme, why should we be denied its benefits just because we are already part of the banking network?" her husband, a resident of Ghaziabad, asked.

The one-page account opening form has a column seeking self-declaration that a person does not have any account in any bank. But bankers say the self-declaration is meaningless as there is no mechanism to stop multiple accounts. "If a person has multiple documents as proof of identity, he can open multiple accounts and our system cannot detect it. There is no inter-bank arrangement to stop duplication," said the branch manager of another PSB.

Bankers say accounts opened without valid address proof are put in the high-risk category and these are unlikely to get the overdraft facility. Such account holders will be asked to furnish proof of residence within a year, as is the case with all accounts in the high-risk category. The Bank of Baroda form mentions that eligibility for an overdraft facility of up to Rs 2,000 is "satisfactory operation" of an account for at least six months. "There is a great deal of misconception about the overdraft facility. Those who have opened accounts under this scheme are under the impression that they automatically become eligible for the overdraft facility, which is not the case," said the executive of the leading PSB.

On accident insurance of Rs 1 lakh for each account holder, bankers say it comes automatically with the RuPay card. What it means is that existing account holders who opened their accounts prior to the launch of the scheme may get RuPay cards issued against their old accounts and become eligible for accident insurance. However, bankers are awaiting further instructions on who is going to pay the premium for the life insurance cover of Rs 30,000 that has been promised with each Jan-Dhan account.