Showing posts with label Jan Dhan Yojana. Show all posts
Showing posts with label Jan Dhan Yojana. Show all posts

Friday, December 23, 2016

Jan Dhan surges Rs 15,000 cr in 10 days as money launderers by-pass demonetisation

Official sources told FE that these accounts saw transactions of R19,250 crore in the 10 days to November 19; over R15,000 crore was deposited and some R4,250 crore was withdrawn. (PTI)

Jan Dhan accounts, integral to the Modi government’s plan for financial inclusion and direct benefit transfer, were meant to have a transformational role in the uplift of the underprivileged, but, ironically, demonetisation has made them a parking lot for black money. Official sources told FE that these accounts saw transactions of R19,250 crore in the 10 days to November 19; over R15,000 crore was deposited and some R4,250 crore was withdrawn. As on November 8, the day Prime Minister Narendra Modi announced that R500 and R1,000 banknotes would henceforth cease to be legal tender, Jan Dhan accounts held R45,637 crore, accumulated over two years and a month.
Deposits in these accounts, 25.5 crore at last count, rose by a third to around R61,000 crore between November 10 and 19, as people with hordes of unaccounted cash sought to convert them to legitimate wealth, according to data furnished by 27 public sector banks and 13 private banks. The account holders have either received rewards for allowing their accounts to be misused or been unaware of the third-party deposits made into their accounts.
According to a PTI report, Mamata Banerjee-ruled West Bengal leads the pack of states that has seen the highest deposits so far followed by Karnataka.
Modi launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) in August 2014. As the government kept public sector banks on their toes, in just over a year, 19.72 crore accounts were opened and 16.8 crore RuPay cards were issued under the scheme, but it later turned out that a sizeable number of accounts remained zero-balance ones. Accounts with nil deposits were 77% of the total at the end of September 2014, but thanks to various government schemes and transfer of subsidies, only 24% of the accounts showed nil balance two years later.
As it became clear that Jan Dhan and other low-deposit accounts were misused by black money holders, the finance ministry last Friday warned that such attempts to convert unaccounted cash would attract “income tax and penalty”.
The ministry added that persons who allow his or her accounts to be misused could be prosecuted for abetment. Revenue secretary Hasmukh Adhia had earlier said that if more than R10 lakh is deposited in an account between November 10 and December 30 without matching income declared, tax plus penalty of 200% of the tax would be levied as per Section 270 (A) of the Income Tax Act. While tax experts doubted the legal tenability of the move, Friday’s release by the ministry went a step further, as it did not specify any threshold trigger. The government had earlier announced that small deposits made in the banks by artisans, workers, housewives, etc, would not be questioned, up to an exemption limit of R2.5 lakh.
Sources added that the Finance Intelligence Unit was keeping tabs on bank officials who may be involved in the misuse of the Jan Dhan accounts. Since these accounts cannot hold more than R50,000 without know-your-customer compliance, the fresh deposits in them mostly tend to be slightly lower than that.
Jan Dhan accounts, along with Aadhaar seeding and mobile phones, form the Modi government’s “JAM” trinity for financial inclusion. Of the 25.5 crore Jan Dhan accounts, 13.69 crore are already Aadhaar-seeded while 19.44 crore RuPay cards have been issued.
A surge in net deposits in Jan Dhan accounts was seen immediately after the scrapping of high-denomination notes but the momentum slowed gradually: Net deposits peaked at R2,525 crore on November 13 but stood at R650 crore on November 19.

Saturday, November 12, 2016

Govt looking into sudden spurt in Jan Dhan account deposits

Image result for demonetisation

Government is looking into sudden 'propping up' of money into zero-balance Jan Dhan accounts+ , after anunprecedented Rs 2 lakh crore of cash+ flooded the banking system within just two days of demonetisation of high value currency.



Finance minister Arun Jaitley said law enforcement agencies are keeping a hawk eye on illegal currency changers, offering to change the junked 500 and 1000 rupee notes, as well as those investing their money in gold and bullion+ to hide unaccounted wealth.



"We are getting some complaints that suddenly monies have propped up in the Jan Dhan accounts, so there is a misuse and that is why the rationing in initial days takes place," he said, adding that the departments concerned will act if anything improper is found in the deposits.



The government is focusing on ensuring that replacement of currency notes withdrawn, with new legal tender, takes place smoothly and quickly so that inconvenience to people is minimised, Jaitley said, adding "the Enforcement Directorate and revenue department are keeping a close watch".



Cautioning those indulging in illegal usage of the demonetised currency, he said authorities will not hesitate to take action against any unlawful activity.



His statement comes amid reports that the old high denomination notes had been used to buy gold or were being exchanged for a premium.



ED is scrutinising as many as 67 foreign exchange dealers and Directorate General of Central Excise Intelligence is also monitoring prominent jeweller and bullion traders.



The finance minister said India as a country should move towards plastics currency and more and more use electronic modes for transactions.



Country's largest lender State Bank of India has got Rs 47,868 crore cash deposits during the last two-and-a-half days and since SBI accounts for about 25 per cent of the banking system, the total cash mobilised by all banks put together could be around Rs 2 lakh crore, said.



In a surprise move, Prime Minister Narendra Modi had on the night of November 8 announced withdrawal of 500 and 1000 rupee notes but allowed people to deposit them in their bank accounts or exchange them with new Rs 2000 and Rs 500 notes till December 30.



To give comfort to honest taxpayers, it has said deposits of up to Rs 2.5 lakh in accounts of housewives and farmers will not be reported to Income Tax authorities.

Demonetization makes RuPay record 100 percent usage at PoS terminals

rupee.

Since the demonetization of Rs 500 and Rs 1000, the National Payments Corporation of India (NPCI) has witnessed an impressive surge in the usage of RuPay cards at Point of Sale (PoS) terminals at shops and other retail outlets. During last two days (November 9 and 10, 2016), RuPay usage on PoS/e-commerce was around 8 lakh transactions a day compared with a daily average of 4 lakh transactions earlier. The value of transactions almost doubled.
Commenting on the surge, A P Hota, MD & CEO, NPCI said, “It is heartening to witness a good number of first time users at PoS terminals. Using the PoS is even simpler than using on ATM. When there are restrictions on withdrawal of cash in the aftermath of demonetisation of notes, usage of payment cards at PoS for all day-to-day purchases is the ideal way to transact.”
Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) usage has doubled. IMPS and UPI are 24×7 remittance service. There has been a surge in the usage of RuPay cards at Point of Sale (PoS) terminals at shops and other retail outlets. RuPay – the domestic card is enabled on all three channels – ATMs, PoS and e-commerce. India has 14 lakh PoS terminals and all the terminals accept all brands of debit and credit cards.
At PoS terminals, usually the staff at the counter takes the card, swipes on the machine and hands over the PoS machine for the customer to key-in PIN for authorization. Customers are not supposed to share their debit card PIN with anyone. PIN is a secret number and customer has to cover the key pad so that no one can see the numbers being keyed-in at ATM or PoS.
It is also worth mentioning that RuPay card can be used for booking railway tickets, bus tickets, shopping on the internet or paying bills / taxes. Usage of RuPay cards at e-commerce channel has also been growing rapidly and we see good number of RuPay customers in this segment as well.

Tuesday, February 9, 2016

RuPay Card is a excellent product, no visibility: Industry


India's domestic card service RuPay is an excellent card with better rates than foreign card payment processors for banks, merchants and end-users, but its lack of visibility make for less traction, say industry experts.



Launched in March 2012, RuPay currently has more than 230 million customers and handles 20% of transactions in the country. The card has a lower debit card interchange rate, compared to international service providers, who roughly charge between 0.65%-1% on every transaction. "That's an estimated 400 crore in transaction fees that's going out of the country - which we could retain if we used a domestic card provider," says A P Hota, managing director and CEO of National Payments Corporation of India (NPCI).



The NPCI has also launched RuPay Platinum and RuPay International, in partnership with Diners' Club and Discover Financial Services, and plans to launch RuPay credit cards by this June. "But do people know about these products. Where is the awareness? Where is the advertising? There needs to be visibility," says S Santhanagopalan, president-finance, TVS Iyengar & Sons Pvt Ltd.



Since processing of transactions happens domestically, usage of RuPay over Visa or Mastercard result in a lower cost of clearing and settlement for each transaction. But this transaction affordability should be driving higher growth and more visibility, says



Currently RuPay is accepted in more than 1.88 lakh ATMs in the National Financial Switch (NFS) network. In tune with the idea of a stronger domestic payment network, the NFS itself is run by the NPCI.





"Having a domestic card makes a lot of sense at every level. I've seen the domestic NETS card used in Singalore and its amazing the kind of reach, convenience and ease of transaction. That way, we are light years behind with RuPay," says Sudhakar G, a chartered accountant with BMR & Associates LLP.

Many people are unaware that RuPay is currently issued in 277 banks in India, including all the public-sector banks like State Bank of India, Indian Overseas Bank and all major private banks like ICICI and HDFC.



"I had to ask my private bank to issue me RuPay, because on their own they don't take the initiative to issue the domestic card. I think they already have a good relationship with the international service providers and don't want to jeopardise that," says N Arunkumar, who is employed at a private bank.



"It is an uphill task. We have now talked with some banks and they have agreed to issue RuPay cards on certain days of the month," says NPCI's Hota.

NPCI has also networked with 5 lakh merchants in India and RuPay can be accessed at more than 8.75 lakh POS (point-of-sale) terminals across the country. POSs being the machines one sees at every sale counter at supermarkets, boutiques, restaurants or bars.



"I've seen travel cards in Singapore and its so efficient. The ease of travel is remarkable. I'd certainly see it as a welcome move if any such thing is available in India," says Sudhakar on the NPCI's move to launch a tap-and-go mass transit card in March in Bangalore.

Tuesday, October 20, 2015

How Aadhaar card has made your life easier



How Aadhaar card can make your life easier


Supreme Court allows more instruments to use the biometric card.

Image: Many transactions in the financial sector are finally getting linked to the biometric card. Photograph: Reuters
Soon, linking the employee provident fund account with the Aadhaar card can make life much easier for employees.

K K Jalan, central provident fund commissioner, Employee Provident Fund Organisation, explains: "With the Supreme Court (SC) deciding to allow linking of PF with Aadhaar, it will help us go totally online. We wanted to use Aadhaar to give unique benefits to subscribers, like settlement of accounts through the online method. This can only be done if the account is linked with the biometric card. At present, for claims settlement, we are totally offline."

With the SC adding four more schemes (Jan-Dhan Yojana, Mahatma Gandhi Rural Employment Guarantee, EPF and pensions) where Aadhaar may be used, many transactions in the financial sector are finally getting linked to the biometric card.

Earlier, the use was limited to getting foodgrain and kerosene under the Public Distribution System and for cooking gas.

Image: Aadhaar has been allowed for pension schemes. Photograph: Reuters
Benefit
Says Guru Malladi, partner & leader, advisory services (government & public sector), EY: "For multi-channel service providers this is a welcome step. While there can be no denial of service if one does not have the card, it will help make things simpler for ones who decide to share their Aadhaar details."
For example, as Aadhaar has been allowed for pension schemes, the money can be deposited directly to a pensioner's account.
Even if the pensioner dies, things can move rapidly if his/her nominee's card details are with the department.

At present, it takes three to six months for transfer of such details.
Sushila Pai (name changed) lives with her 92-year- old mother in Mumbai's outskirts.

When her brother who'd retired from a state government organisation passed away, the pension amount was supposed to have passed to the nominee, their mother.

However, as the mother was 92 years and could not travel to the bank or even sign, bank officials had to come every month to get her thumbprint on cheques for withdrawal of pension. Frustrated with the process, the family withdraws the pension once in a quarter or six months.

Even the transfer of pension took over six months because bank officials had to come several times to take the thumbprints.

If Pai's mother had an Aadhaar card and had shared the details with the bank as the nominee of her son's pension, the transfer would have been much simpler.

Image: Usage of Aadhaar will soon be extended to other instruments like purchase of mutual funds. Photograph: Reuters
More products?
When Attorney General Mukul Rohatgi requested the SC to add the opening of bank accounts with a unique identification number, the court would not make more modifications.

However, experts hope this usage of Aadhaar will soon be extended to other instruments like purchase of mutual funds (MFs), insurance policies and so on. Chief executives of MFs believe this development will allow them to exponentially extend their reach.

At present, if distributors have client applications from another city, it is a big problem, as the process of physical verification is long.

Many online distribution companies do video conferencing as physical verification.

Image: The issue is about the authenticity and veracity of the database. Photograph: Reuters
Quiet spread
Backed by the Reserve Bank of India's permission to use Aadhaar, many banks have already started using it aggressively.

Some even insist on the card when one applies for a bank account or loans.
Also, the income tax department is making life easier for taxpayers who are willing to link their Aadhaar while filing returns.

Despite filing a return online, taxpayers had to take printouts of the acknowledgement and send it by post to the department. Now, those who have linked the card need not do it.

The problem
The apex court has not allowed mandatory use of Aadhaar. Without this, most financial institutions will be wary.

However, experts also believe such a development would be premature, for many reasons. At present, the Unique Identification Number covers only 900 million accounts, roughly 75 per cent of the population.

"Once we have reached 90 per cent or more, the courts will look at the government's plea to make it mandatory more favourably," says a tax expert.

 However, it is not only about coverage. Take the case of Anwar Sheikh, an assistant with a law firm, as an example.

He applied for the card, with his family. While the others got their cards in a couple of months, his brother and he did not.

After chasing the department and calling the helpline several times, he was told his documentation had not been received. He reapplied and got his card after a year.

What is more surprising is that when he made contact with the department, he was asked to send the details in a format.

When he did so, there was no response. "How can someone's documentation, eye scan, fingerprints simply disappear from the system? It is what worries me about the idea of a single identity like Aadhaar," says the lawyer.

Image: There is a lot of personal data already floating around. Photograph: Reuters

Voluntary vs mandatory

There is a strong debate on whether it should be made mandatory or not.
Pawan Duggal, cyber security lawyer, feels the government should not do so as of today because Aadhaar is based on biometric information, collected using a computer system. This means it is based on information in electronic form.

It is, therefore, governed by the Information Technology Act, which states that such information needs to have adequate security.

"It's not normal data - it's sensitive personal data. If it's not properly retained and securely maintained, it can be leaked out and the entire identity will be compromised," says Duggal.

Image: It won't be a bad idea to get an Aadhaar card and use it for transactions you are comfortable with. Photograph: Reuters
The bigger problem, as Duggal highlights, is that one doesn't know how the government is complying with the IT Act, as there's no information on data safety procedures adopted. People are clueless on the compliances done under the Act.

Some others feel the privacy issues will be resolved over time. "It is an opportunity for us to review our 70-year-old privacy laws. The security establishment around the card has to be created," adds Malladi.

According to him, there is a lot of personal data already floating around.
For example, with travel to the US and UK, one has to give biometric data even before entering the countries. Many others, like Dubai, seek data for people who are there even in transit. All this data can theoretically be misused.

The issue is about the authenticity and veracity of the database. This is the reason why some financial institutions, like MF companies, are not allowed to accept it as a proof, which can have bigger financial ramifications.

While this debate will be on for some time, or perhaps a very long time, it won't be a bad idea to get an Aadhaar card and use it for transactions you are comfortable with.

What is the Aadhaar case about?
  • After a few government departments made Aadhaar compulsory, several petitions were filed
  • Supreme Court impleads all states and Union Territories in the case
  • The principal opposition to Aadhaar in the SC turns out to be the question of privacy
  • The government's defence: Only basic identity data required
  • SC restrains UIDAI from transferring information to any agency without the written consent of the Aadhaar card holder
  • The attorney-general argues that a Right to Privacy is not guaranteed under the Constitution
  • SC refers the privacy question to a larger constitutional bench
  • A five-judge bench, accordingly, set up to hear the petition
  • Going forward, SC to look at whether there is any Right to Privacy guaranteed under the Constitution

Monday, September 14, 2015

RuPay cards in currency among bank users: official



Around one lakh of the nearly two lakh customers of Puduvai Bharathiar Grama Bank, the only Regional Rural Bank in the Union Territory of Puducherry, have been given RuPay cards, said D. Devaraj, Chairman of the bank at an e-Payments Literacy Workshop on Tuesday.

The workshop held in Puducherry is among 115 such workshops being held across the country as a programme of the National Payments Corporation of India (NPCI), an initiative of the Reserve Bank of India and an umbrella institution for all retail payment systems in the country. Here, the workshop was conducted by the Puduvai Bharathiar Grama Bank in association with NABARD.
A booklet on e-payments literacy manual was also launched at the event by Shanthamurthy, Joint Director, Planning and Research Department.

The workshops are aimed at promoting e-payments and safe banking practices. Around 200 customers and staff of the Puduvai Bharathiar Grama Bank participated in the interactive workshop.

New app planned

A.R. Ramesh, chief project officer, NPCI, Mumbai, took the audience through various aspects of e-payments like safe usage of ATM cards, fund transfer through IMPS (Immediate Payment Service), benefits of linking Aadhaar card and mobile phone number to bank account, and answered their doubts. Mr. Ramesh said that the NPCI has plans to launch a mobile application bringing on board a large number of billers for the convenience of customers. He also spoke about the benefits of the RuPay card, an initiative of NPCI, with the card being linked to insurance schemes, such as Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana.

“The RuPay card is as good as cash. It is accepted on leading websites, including 30,000 merchant websites, besides booking on IRCTC website and airlines websites also,” he said.

Puducherry has high usage of e-payments, said Ravichandran from Puduvai Bharathiar Grama Bank, adding that more than 50 per cent customers at the bank use some kind of e-payment methods. The event was also attended by O.S. Gnana Sekaran, Assistant General Manager, Indian Bank Zonal Office, Puducherry, and P. Veerashankar, Deputy General Manager, NABARD, Chennai. A workshop was also held at Karaikal.

One year of Jan Dhan: Many loose ends yet to be tied

One year of Jan Dhan: Many loose ends yet to be tied

Paramjit Kaur, a resident of Salempur village in Punjab's Ludhiana district, can barely hide her excitement when asked about the launched last year. She was one of the first women from her village to open what she calls the "zero balance" account. And she is one of the lucky few to have a passbook.

The entries, all in English, show her as a student (she is actually a home maker) and that she has not made a single transaction since the account was opened on August 28, 2014. Her father's name is given in the column for wife and the nomination column says "not registered".

All the people this reporter spoke to in the village had opened "zero balance" accounts. Few of them received passbooks. None has received a yet. They were not aware of the benefits of the scheme and did not know about the conditions to claim them.


The situation was no different in the neighbouring Humbran village where 55-year-old enrolled himself for the scheme and has a passbook. But he, too, has not made a single transaction and is yet to receive the RuPay card, making him and others like him ineligible for the overdraft facility and accident and life insurance benefits that come with these accounts.

According to the details of the scheme, an account holder becomes eligible for an overdraft of up to Rs 5,000 only after satisfactory operation of the account for six months and the RuPay card that comes with the account has an inbuilt accident insurance cover of Rs 1 lakh. According to government data, 179 million accounts were opened under the scheme till August 26, 2015. However, only "10 lakh (one million) accounts have been found eligible for overdraft. Out of these, the overdraft facility has been availed by 164,962 account holders."

The sense one gets after talking to a number of bankers is the scheme, though laudable in its objective, is suffering because of procedural complexities. "Since most of these accounts were opened in a great hurry and at organised camps, many entries need to be checked and rechecked. The feedback I receive is that entries, at least in 60-70 per cent cases, with regard to nomination just do not exist. In such a scenario, how can insurance claims be settled?" asked a middle-level banker with a leading public sector bank posted in Ludhiana.

Bankers say the reason so few account holders are eligible for overdraft is many of them have not strictly followed the know-your-client (KYC) norms. Non-existence of mandatory transactions within 45 days of the opening of the account is another reason. "We sent RuPay cards to addresses given by the customers. A majority of them came back to us as those addresses just do not exist. It is a huge problem for us," a Delhi-based banker with another government-owned bank told this reporter.

Bankers also say that since other schemes like the Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and are linked with Jan Dhan accounts, their success will depend on how the loopholes in the Jan Dhan accounts are plugged. "Suppose the premium for any of these schemes is to be deducted from the Jan Dhan account. If there is no transaction and hence no balance, how will the premium be deducted?" observed another banker.

Lack of awareness about the scheme, especially in villages, has created a situation where expectations are turning into disappointment. "All the workers who work in my field had opened Jan Dhan accounts. Once in 15-20 days they go to bank branches to check whether they have received some money. Once they get to know that no amount has been credited, they come back thoroughly disappointed," Jagjit Singh, sarpanch of Chankoin Khurd village in Ludhiana district, told this reporter.

(Our experience with how the Jan Dhan Yojana has unfolded in some villages in Ludhiana district raises questions about the sustainability and effectiveness of the financial inclusion scheme. We must, however, make it clear that we have not conducted an all-India survey, but base our observations on discussions with a few villagers in Ludhiana, selected at random, and a few bankers. The picture may be different in other parts of the country.)


http://www.business-standard.com/article/economy-policy/one-year-of-jan-dhan-many-loose-ends-yet-to-be-tied-115091200834_1.html

Wednesday, August 26, 2015

Now, Shop with IRCTC RuPay Card

Now, Shop with IRCTC RuPay Card

Now passengers can do shopping by using the IRCTC RuPay prepaid card as Indian Railway Catering and Tourism Corporation has expanded its range of service.

IRCTC Union Bank Prepaid Card was launched in collaboration with the Union Bank of India and the National Payment Corporation of India in May.

Till now, the card was used only for rail bookings.

The services are now being extended to allow payment at merchant locations like restaurants, malls and also for online shopping as we have got the necessary permission for expansion of the service, IRCTC chairman and managing director A K Manocha said.

The card allows for easy transactions on the railway booking website, with the first five transactions each month offered free of transaction charges, and an attractive rewards point system on every transaction.

"The IRCTC Union Bank Prepaid Card has already notched up 7,000 users since its launch, and the number of prospective users is showing an upward trend," Mr Manocha said.

A PSU of the Railway Ministry, IRCTC had recently tied up with Amazon, a leading e-commerce company, to offer its customers the online shopping opportunities in addition to its regular travel ticket booking and hotel accommodation booking services.

"The IRCTC Union Bank Prepaid Card will further expand the online shopping preferences of our patrons, besides online rail ticketing," Mr Manocha said.

Friday, June 12, 2015

Banking on the RuPay

The recent Jan Dhan Yojna has given RuPay a big boost as every account-holder is getting the RuPay card.

 

NPCI had brought to life RuPay debit cards in 2012.

It was recently revealed by the National Payment Corporation of India (NPCI), a government agency, that RuPay-branded credit cards would be launched in less than 10 months from now. Lalatendu Mishra and S. Varadharajan have this explainer on RuPay: 

What is RuPay?
RuPay is India’s own card payment scheme. Like all other card payment schemes, notably Visa and MasterCard, it was created to ensure cashless transactions. The scheme was conceived by NPCI, an initiative of the Reserve Bank of India and an umbrella institution for all retail payment systems in the country. 

Why the name RuPay?
RuPay is a play of the words rupee and payment. It was originally called IndiaPay. 

So, you can do with RuPay what you can do with other cards?
Yes, you can use them at ATMs, as well as while shopping both online and offline. 

How does any card system work?
Imagine you are paying for your grocery purchases at a supermarket using your card. When your card is swiped, the seller’s bank submits the transaction through a card payment network (the likes of Visa or RuPay) to the bank that issued your card in the first place. The card payment network forms the middle layer connecting the card issuing bank and the seller’s merchant bank. 

When there are other such systems already, why one more in the form of RuPay?
RBI wants to back a domestic card system with a few goals. One, provide affordable electronic transactions for local banks. Two, promote financial inclusion. The idea of a domestic card is to break the dominance of international majors such as Visa and MasterCard.
The website of NPCI also lists as a benefit the fact that transaction and customer data of RuPay users will stay in India. 

Where are RuPay cards accepted?
They are accepted at more than one million points of sale terminals. Over 20,000 online merchants accept RuPay cards. Internationally, RuPay cards can be used at all Discover & Diner PoS and ATM networks. 

How affordable are RuPay cards for banks?
Banks pay higher transaction fee in case of foreign cards such as Visa and MasterCard. Since the transaction processing of RuPay happens domestically, it leads to lower cost for clearing and settlement of transactions. According to NPCI officials, the cost is around one-third of the fee charged by foreign card brands. 

How much does NPCI charge for use of RuPay?
For use at ATMs, banks are charged 45 paise per transaction and 90 paise per transaction at point-of-sale in merchant establishments or e-commerce platforms, irrespective of the transaction value. Other card systems charge more in case of high value transactions. 

What is RuPay's market share in India?
According to information in the Finance Ministry’s website, around 14 crore RuPay cards have been issued till date. Out of the 50 crore debit cards and two crore credit cards in circulation, this works out to about 27 per cent. And, this number has been achieved in less than three years. Out of the 14 crore cards issued, 55 per cent are active, according to Finance Ministry data. The recent Jan Dhan Yojna has given RuPay a big boost as every account-holder is getting the RuPay card. The direct benefits transfer scheme has also helped in making the RuPay cards active.

Jan Dhan rolls on, but ‘dhan’ in accounts slow to accrue




About 47 per cent of bank accounts opened under the Pradhan Mantri Jan-Dhan Yojana in Karnataka have zero balance

Banks in Karnataka have gone about creating no-frills accounts under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) with great zeal and created close to 72 lakh accounts since August 15, 2014. The difficult task, however, has been ensuring transactions through the accounts, with nearly half of them categorised as ‘zero-balance’ accounts as of now.
Massive drive

Statistics accessed through SyndicateBank, Karnataka’s nodal bank for the scheme, shows that banks in Karnataka created 71.68 lakh accounts under the PMJDY between August 15, 2014 and May 23, 2015. Of them, 33.88 lakh are zero-balance accounts, which translates to 47.27 per cent.
K. Preetam Lal, General Manager of SyndicateBank, said population in the State yet to have bank account was “less than one per cent”, which includes migrant workers and people in very remote areas. He said the banks had not insisted on opening with a balance in the first phase, but the next target was making them operational, which they hope to achieve by the year-end.
A micro reading of the zero-balance accounts across districts under this much-talked-about financial inclusion mission throws up some interesting patterns. Predictably, many districts with over 50 per cent zero-balance accounts lie in north Karnataka, with Bagalkot (61.19 per cent), Haveri (60.64 per cent), Koppal (57.95 per cent), Vijayapura (56.64 per cent) and Ballari (56.42 per cent) among the toppers.
The contrast

However, it is Bengaluru Rural district that has the maximum number of zero-balance accounts (81.15 per cent). In contrast, Bengaluru Urban district has the least number of zero-balance accounts, at 29.87 per cent.
OD, but only with Aadhaar
People opening the PMJDY account are entitled to overdraft (OD) facility, but conditions apply. The account-holder should have “satisfactory” transaction for six months and he/she should be the head of the family. Another important condition is that he/she should mandatorily have an Aadhaar card, which is important for “reasons of regulation”. As of now, of the 71.68 lakh accounts, 41.25 lakh are Aadhaar-seeded accounts.
Reluctance for RuPay card
A PMJDY card holder is entitled to a RuPay debit card, but a substantial number of those who are entitled for the cards do not appear to be interested in taking them. As per the records, though 63.79 lakh debit cards have been issued, banks have reported that about 20 per cent of them have not been collected by beneficiaries.
* Total number of PMJDY accounts in State: 71,68,528
* Total number of accounts with zero balance: 33,88,737
* Total number of Aadhaar-seeded accounts: 41,25,839
* Total balance in accounts: Rs. 641.93 crore
* RuPay debit cards issued: 63,79,177

Wednesday, March 4, 2015

NPCI to come out with virtual form of RuPay debit card

After launching the RuPay debit card, National Payments Corp (NPCI) is set to come out with its virtual form in the next few months, a move that will give further push to smartphone-based transactions.

"We are planning to go for pilot of a virtual RuPay card over the next 4-5 months," NPCI Managing Director and Chief Executive A P Hota said here today.

 

NPCI is the nodal agency for all retail payment systems under the Jan Dhan scheme.
The physical plastic RuPay card carries a 16-digit number. Under the virtual form, there will be no need of a physical card and a transaction can be done with the help of the 16-digit number alone.
The initiative will enable all account-holders send and receive money from their smartphones with a single identifier which may include the Aadhaar number, mobile number or virtual payment address without entering any bank account information.

Average value of the card payment system per head as on date was Rs 1,500 and an average remittance stands at Rs 2,500. Under the new virtual system, the amount would be much less and may include school fee and grocery payments, he said.

The proposed payments banks are likely to provide this virtual card facility from the beginning, Hota said. "The specifications standards are now available for payments banks and hence it is a great opportunity for them."

Around Rs 8,000 crore worth of transactions are taking place through IMPS (immediate payment service) per month. What we are doing now is just putting another extra layer on the already existing system so as to make transaction more easy, Hota explained.

Currently, only around 20 per cent of the total transactions are happening through IMPS and hence NPCI is working on further simplification of the facility so as to make it more popular in future, he added.

Talking about authentication system for the virtual RuPay card, former Chairman of UIDAI Nandan Nilekani said "with everybody having cellphones, going forward the single- factor authentication can be the cellphone, replacing the physical cards."

"Later, Aadhaar-based authentication will come on mobile phone in 12-18 months. Second factor of authentication will be the Aadhaar number. We hope millions of transactions to take place through this mode in the country in days to come," Nilekani said.

Saturday, January 24, 2015

Next phase of Jan-Dhan to offer a range of insurance, pension services


Next phase of Jan-Dhan to offer a range of insurance, pension services
PM Narendra Modi said the banks should redouble efforts in financial literacy and seeding of Aadhar numbers with bank accounts needs to improve.
 Prime Minister Narendra Modi on Saturday outlined the next phase of the Jan-Dhan Yojana to include credit, insurance and pension as he complimented bankers for near 100% coverage of households under the massive financial inclusion drive.

The Pradhan Mantri Jan-Dhan Yojana is a key policy plank of the Modi administration's vow to eradicate what it calls "financial untouchability". Each bank account comes with an accident insurance cover, a RuPay debit card and a life insurance policy of Rs 1 lakh. Account holders will also be provided an overdraft facility of Rs 5,000 later. 
 "Well begun is half done. The Pradhan Mantri Jan-Dhan Yojana provides a platform for changing the economic condition of our people," Modi told bankers in his email.

"We need to build on this success and leverage these accounts to provide our citizens a wide range of credit, insurance and pension services. We also need to maintain high standards of customer service. This is the next phase of Pradhan Mantri Jan-Dhan Yojana," the PM said.
 
He said the target set for opening bank accounts for all households has been surpassed well ahead of the target date of January 26, 2015. "By opening 11.5 crore new accounts in a very short span, we have achieved a coverage of 99.74% of all households in the country. I congratulate you for your extraordinary efforts," the PM said in his email.

He said doubts were expressed when the drive was launched but the bankers had proved skeptics wrong by achieving "what appeared to be impossible".

"This feat alone should motivate you, as well as others to work to make our dreams a reality," the PM said.
 
Modi said the banks should redouble efforts in financial literacy and seeding of Aadhar numbers with bank accounts needs to improve. "Bank Mitras need to be enabled to carry out RuPay card and Aadhaar enabled transactions in villages itself," the PM said.

"I want you to work to ensure that each account holder enrolls for Aadhaar and seeds it in the bank account. This needs to be done for all accounts. I am sure you will do this seeding with the same zeal you showed in driving bank account opening," he said,

He said most development activities were hindered by the single disability of not having bank accounts but now that it been overcome, "benefits have already started flowing to people through some of the "direct benefit transfer" schemes. This not only ensures that benefits reach people directly, but also utilizes your accounts well," he said.
 
"This is your great contribution to nation-building. We will ensure that many more schemes utilize the DBT platform," he said.    

Tuesday, January 20, 2015

11.5 crore Jan Dhan accounts opened; New Guiness Book of World Record: Most of India is banked: Jaitley


jai
"Most of India today is included in the banking system," Jaitley said, adding that more than Rs 9,000 crore has been deposited in the Jan Dhan accounts.

As many as 11.5 crore bank accounts have been opened under the Pradhan Mantri Jan Dhan Yojana, exceeding the enhanced target of 10 crore and covering 99.74 per cent of households, finance minister Arun Jaitley said today.

"Most of India today is included in the banking system," he said, adding that more than Rs 9,000 crore has been deposited in the Jan Dhan accounts.


Prime Minister Narendra Modi announced the financial inclusion scheme in his first Independence Day speech last year. It was launched in August with a target to open bank accounts for 7.5 crore poor persons by January 26, 2015. The target was later increased to 10 crore accounts.

Addressing a press conference here, Jaitley said the government would use these bank accounts to pass on benefits to individuals under its various social security schemes.

Financial Services Secretary Hasmukh Adhia said that even Guinness Book of World Records has recognized the achievements made under Pradhan Mantri Jan Dhan Yojana.  


In its citation, the Guinness Book said: "Most bank accounts opened in one week as part of the Financial Inclusion Campaign is 18,096,130 and was achieved by the Department of Financial Services, Government of India from August 23 to 29, 2014."

Exclusion of a large number of people from the banking network was inhibiting growth, Jaitley said. "Financial Inclusion is one of the top most priorities of the government. PMJDY is the biggest financial inclusion initiative in the world."

He said that out of the accounts opened, 60 per cent are in the rural areas and 40 per cent in the urban areas. Share of female account holders is about 51 per cent.

Jaitley said that RuPay cards have been issued to more than 10 crore beneficiaries who will get a benefit of personal accidental insurance of Rs 1 lakh besides a life insurance cover of Rs 30,000 for eligible beneficiaries. 


Describing the scheme as "a game changer for the economy", the minister said that it would provide the platform for Direct Benefits Transfer (DBT) and help in plugging leakages in subsidies.

Overall, public sector banks alone opened 9.11 crore accounts under PMJDY, followed by regional rural banks which opened about 2.01 crore accounts. On the other hand, 13 private sector banks together open just 37.58 lakh accounts.


According to Adhia, all these accounts are being used for payment of wages under the MNREGA scheme and LPG subsidy. More than Rs 33,000 crore towards MNREGA, LPG and other benefits will be routed through the bank accounts annually.

On the future of the scheme after January 26, Jaitley said the government will take a view on it later.

Responding to a question of duplication of accounts, the minister admitted that there might be some such cases and that was the reason for enhancing the target to 10 crore accounts.

The issuance of the RuPay cards to account holders would encourage use of plastic money and help in moving towards a cashless society, Jaitley said.

The proposal to provide overdraft facility in such accounts would also act as micro finance and prevent people from taking loans at exorbitant rates from money lenders.

Jaitley said that most of the country has been covered by the PMJDY, except those areas which have poor connectivity, are impacted by left-wing extremist and are inaccessible.
 
 
 

Sunday, January 11, 2015

Private banks lag behind PSU lenders in opening Jan Dhan a/c

Private banks lag behind PSU lenders in opening Jan Dhan a/cPrivate sector banks are way behind their PSU peers when it comes to opening financial inclusion accounts under the Prime Minister's Jan Dhan Yojana, with just about 30 lakh in over four months.

The state-owned banks have opened 8.62 crore such accounts in the same period. The number of such accounts opened by even regional rural banks stands at 1.92 crore.

Private banks have a market share of about 20 percent, but their contribution in this flagship financial inclusion programme of the government is only about three percent.

As per the latest Finance Ministry data, 13 private sector banks have opened 30.47 lakh Jan Dhan bank accounts as against 8.62 crore by state-owned banks as on January 7.

Prime Minister Narendra Modi launched the financial inclusion scheme on August 28, 2014. The initial target was to open 7.5 crore such accounts, but the later it was revised upwards to 10 crore to be completed by January 26, 2015. However, this target has already been achieved.

Taking into account the regional rural banks, so far a total of 10.84 crore Jan Dhan accounts have been opened so far by all banks in the country.

Among private banks, just three of them -- HDFC Bank, ICICI Bank and J&K Bank -- account for about two-third of total accounts opened by private sector lenders.

HDFC Bank has opened 7.8 lakh such accounts, followed by ICICI Bank's 6.67 lakh and Jammu and Kashmir Bank's 6.06 lakh.

Country's third largest private sector lender Axis Bank have opened 2.45 lakh accounts and Kotak Mahindra Bank has opened just 54,000 accounts.

As far as public sector banks are concerned, they have opened more than 8.62 crore Jan Dhan accounts.

Country's largest bank SBI has opened 2.15 crore accounts, followed by Punjab National Bank (61.74 lakh), Bank of Baroda (58.47 lakh), and Canara Bank (53.79 lakh).

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

Besides, account holders under the scheme will get life insurance cover of Rs 30,000. This was additional benefit announced by the Prime Minister during the launch of the scheme. Private banks lag behind PSU lenders in opening Jan Dhan a/c

FM: Benefits of Demographic Dividend will flow only if our Population is Healthy, Educated and Properly Skilled

Meets Representatives of Social Infrastructure, Human Capital and Development Groups as Part of his Pre Budget Consultative Meeting

The Union Finance Minister Shri Arun Jaitley said that apart from on-going schemes and programmes for the marginalized and vulnerable section of the society, the Government has initiated various special social sector programmes. He said that these programmes among others include Swacch Bharat Mission (Gramin), which will set the base for improving sanitation and health standards; Pradhan Mantri Jan Dhan Yojana (PMJDY) and RuPay debit card which will extend financial inclusion and give financial empowerment to the account holders at large.

The Finance Minister, Shri Jaitley was making his Opening Remarks during the Pre Budget Consultative Meeting with the representatives of Social Infrastructure, Human Capital and Development Groups. He said that more than 63% of the population is in the age group of 15-59 years, broadly termed as India's demographic dividend. He said while this young population provides India a great opportunity, but it also poses a great challenge to the Government. He said that benefits will flow only if our population is healthy, educated and properly skilled. In this context, he said that investments, especially in social infrastructure that build-up human capital are crucial. Shri Jaitley said that India needs to take advantage of this demographic window in the next couple of decades and garner its benefits.

Therefore, the Finance Minister said that his Government has put thrust on skill development as well as on 'Make in India' as the Government's endeavour to improve employability and create large employment avenues for the youth among others. He said that skill development has been given focused attention for which a dedicated Department of Skill Development and Entrepreneurship has been created in the Central Government. He said that the challenge for the country now is in planning and acting towards converting its potential demographic force for enhancing opportunities of growth by dovetailing the quality of manpower to the requirements of employers, both domestic and international.

The Union Finance Minister Shri Arun Jaitley said that emerging trends indicate the growth deceleration in India has bottomed-out. The Finance Minister said that significant downward trend in inflation has also been recorded in the second and third quarter of 2014-15. He said that external environment has also largely turned in India's favour. In such a back drop, the Finance Minister said that domestic policies to achieve macro-economic balance and the on-going process of economic reforms would lend further strength to the recovery of the economy.

Various suggestions were received from the representatives of the different social sector groups during the meeting. Major recommendations include that immediate steps be taken in the budget to prevent any scope of diversion and misallocation of funds meant for the benefit of dalits and adivasis. This will result in about Rs. 30,000 crore to be available for the development of Scheduled Caste and Scheduled Tribes. Other suggestions include to set apart in the coming budget the entire 16.2% for Scheduled Castes and 8.2% for Scheduled Tribes, establishment of well designed and dedicated institutional mechanism for Schedule Caste Sub Plans (SCSPs) Tribal Sub Plans (TSPs) separately at the Centre and State levels, creation of a separate unit within Niti Ayog with power to review, monitor and direct to ensure effective implementation of the SCSP and TSP as well as setting-up of a nodal unit headed by a Joint Secretary with the responsibility of preparation of Annual SCSP Plans and their subsequent implementation.

Other suggestions include adequate allocation for ICDS budget, Mid Day Meal Scheme and for the programmes for the nutrition of mother and child under Food Security Act as well as clear demarcation of funds to remove malnutrition among children of dalits and adivasis etc. Besides this, there was suggestion for budget transparency at local level in order to have better utilization of funds and results of various social welfare schemes at the grass root level etc.

Other suggestions made during the aforesaid meeting include that a mechanism needs to be built to develop entrepreneurship among dalits, schemes to be brought out for developing art and culture of dalit and adivasi communities. Suggestions were also made about proper implementation of Prevention of Domestic Violence against Women Act, appointment of women protection officers, increasing the scope of Nirbhaya Fund to cover the domestic violence against women etc. A suggestion was made that Finance Minister may include a statement in his Budget Speech condemning violence against women showing unequivocal commitment of the Government in this regard.

Some suggestions were also made on investment on youth, especially from those of socially excluded communities, investment in skill and entrepreneurship building, more spending on education and social enterprises, inclusion of youth leadership in CSR activities, higher spending to change the social mindset of people against the use of toilets etc.

Other suggestions include adoption and implementation of the National Competition Policy to push the growth on higher trajectory, adoption and implementation of Public Procurement Act. As public procurement accounts for almost 30% of the total GDP worth US $136 billion annually, therefore, Public Procurement Act would help in promoting the good governance by curbing corruption in public procurement; and adoption of a National Public Procurement Policy; adoption and implementation of Financial Consumer Protection Act, fixing of fiscal management practices by establishment of Parliamentary Budget Office, adoption of international best practices in budgetary planning and reduction of non-merit subsidies among others.

In end, suggestions were also made for enhancement of allocation to education with an emphasis on making functional investment in early childhood and elementary education, enhanced allocation to education to 6% of GDP in line with Kothari Commission and National Education Policy recommendations and enhance allocation to elementary education by 1% to accommodate a cumulative gap in education, enhanced allocation to areas with strongest implications on quality-availability of teaching learning materials, improved libraries and strengthening of the capacity of the resource unit at the cluster level, enhance allocation for research, monitoring and evaluation, address gaps in financial and planning process to ensure full expenditure of allocated funds in education sector among others.

Sunday, January 4, 2015

10 crore Jan Dhan accounts, 73% zero balance

PUNE: The government on Friday said that banks had gone past the target of opening 10 crore Jan Dhan accounts and had managed to cover 98% of the households, prompting to now launch a "challenge" to find out if any family remained without access to basic banking facility.

In recent weeks, there has also been a significant increase in the funds deposited in the Jan Dhan accounts with the corpus in the 10.36 crore accounts going past Rs 8,000 crore, according to data available with the finance ministry. But 7.6 crore account holders, which is around 73% of all Jan Dhan accounts, had zero balance on December 30.

"We had done surveys and it shows that across several states we have achieved 100% household coverage. There are some households that are not allowing us access so we will launch a challenge to help find out if there are households that still do not have coverage," financial services secretary Hasmukh Adhia said on the sidelines of the Banker's Retreat here.
 


He clarified that of the 25 crore households in the census, around 22 crore households had participated in the survey conducted by banks and the percentage of households was based on these. He said that the three-odd crore households lived in gated communities and affluent areas and didn't need help in opening accounts.  

In August, the Narendra Modi government launched an ambitious plan to provide all households with a bank account and had hoped to open 7.5 crore accounts by January. But the target was achieved much earlier and the government realized that all households were still not covered, prompting it to scale the target, which has now been achieved. 

The household coverage report available with the government showed that there are few states such as Manipur (78%), Nagaland (76%), Meghalaya (83%), Arunachal Pradesh (84%), Odisha (86%), Sikkim (89%) and Jammu & Kashmir (89%) which still have a large number of households without access to a bank account. But several of the traditional laggards such as Bihar, West Bengal and Uttar Pradesh have near universal coverage.

In some of the districts such as Meghalaya's East Jaintia Hills and South West Khasi Hills, there is zero coverage. Adhia told TOI that special attempts will be made to reach to this population so that no one is left behind. In addition, he said that banks are being asked to sensitize account holders about using the RuPay debit card within the first 45 days so that they are entitled to the insurance facility.  

Jan Dhan: enrolees over 60 short-changed on life cover

A RuPay card under the Jan Dhan scheme may not be enough for nominees to get the death benefit of ₹30,000 when an account holder passes away. Some nominees found this out recently, to their surprise.

Gowramma (name changed), from Karnataka, passed away recently. State Bank of Mysore, where she is a Jan Dhan account holder, rejected the nominee’s claim for the death benefit of ₹30,000 as the deceased was above 60 years of age.

According to the Finance Ministry approved norms for life cover under the Jan Dhan scheme, the eligibility for risk cover ceases when a person turns 60.

These guidelines were framed long after the launch of the scheme and many elderly people had enrolled for the same when it was launched by Prime Minister Narendra Modi in late August. Under the current norms, the account holder will have to exit the life insurance scheme the day he or she turns 60.

State Bank of Mysore has till date received four cases each claiming death benefit of ₹30,000 under the scheme.

Of them, two claims were rejected straightaway as the deceased were aged above 60, sources in the bank said. 

The claims for the other two cases are being processed though the bank is not clear as to which LIC office the claim papers have to be sent for final settlement.

Confusion over claims

Public sector banks are in a state of confusion on the issue of handling claims. Even accident insurance claims are reaching the doorsteps of these banks. 

Although the banks have till date issued 8.4 crore RuPay cards for over 10 crore Jan Dhan accounts, they do not want to foot the death benefit bill for the life cover. They are only keen on having a foolproof mechanism to pass on the claims to Life Insurance Corporation. Both LIC and the public sector banks are yet to firm up a seamless mechanism for claims settlement under the life cover promised under scheme.

Meeting held

On Wednesday, representatives of the Finance Ministry, Indian Banks’ Association and public sector banks held a meeting to discuss the nitty-gritty of claims settlement for the ₹30,000 death benefit promised under the scheme.

There is a need to map LIC branches with those of the banks so that claims could be processed seamlessly, said the chief executive of a public sector bank.

Currently, banks are not fully aware about how to take the process forward in case nominees come up with claims. 

Indications are that the nominees will now be asked to furnish an affidavit confirming that the deceased was the head of the family or that he/she was an earning member of the family, and in the age group of 18-59.