Showing posts with label lic. Show all posts
Showing posts with label lic. Show all posts

Tuesday, January 20, 2015

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

"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.

Tuesday, September 30, 2014

LIC will initially foot the bill for Rupay Debit Card Jan Dhan cover

The Government will, in due course, part-finance Life Insurance Corporation’s efforts in providing life cover of ₹30,000 to each Jan Dhan account-holder, Financial Services Secretary GS Sandhu said.

LIC will initially dip into its own social security-related fund to offer the life cover, and the Government will also pump money into LIC for this purpose, Sandhu told BusinessLine on the sidelines of an Assocham event here on Tuesday.

For the first year, there will not be any fund infusion from the Government and LIC would have to rely on its own internal resources to offer this facility, he said.

Gaining traction

The Pradhan Mantri Jan Dhan Yojana, which was launched on August 28, has received tremendous response with as many as 5.1 crore accounts opened so far.

The most comforting aspect is that banks have succeeded in ramping up their RuPay card rollout in recent days, Sandhu said.

As many as 1.6 crore RuPay debit cards have been issued so far.

Till September 24, only 50 lakh RuPay debit cards were issued under the scheme, raising concerns over the decision by banks to place orders only with two vendors.

But now banks have really started ramping up, Sandhu said, adding that the targets for PMJDY are likely to be met much before January 26 next year.

Monday, September 22, 2014

No second account needed for Jan Dhan benefits: Govt

Mad rush: As on date, 4.18 crore accounts have been opened under the
Jan Dhan scheme. - RAMESH SHARMA

The Finance Ministry on Monday said that micro-credit (overdraft) limit of ₹5,000, proposed under the Pradhan Mantri Jan Dhan Yojana (PMJDY), can also be extended to existing savings bank accounts.

This facility will be available to all existing savings bank accounts on application and depending on the satisfactory conduct of the account, the Finance Ministry said in a statement here.
It has also issued instructions to the effect that people who already hold bank accounts need not open a Jan Dhan account just to get insurance benefits under the PMJDY.

The insurance benefits are available through RuPay card and existing bank account holders keen to avail themselves of the insurance benefits (promised under Jan Dhan accounts) can submit an application to the bank branch concerned to get a RuPay debit card.

Once a RuPay debit card is available to an account holder, the insurance benefits of accident cover of ₹1 lakh and life cover of ₹30,000 will be provided to them too.

As on date, 4.18 crore accounts have been opened under the PMJDY.

The Finance Ministry has also said that people who do not have officially valid documents or Aadhaar numbers can still get bank accounts opened by submitting two copies of signed photographs at the bank branch.

However, these accounts will be called “small accounts” and would be normally valid for 12 months. Such accounts shall be continued subject to showing of proof that he/she has applied for any of the officially valid documents within 12 months of opening of the small account.

One can open Jan Dhan A/c by just submitting 2 photos: Finance Minister

Finance Ministry today said people who do not have officially valid documents or Aadhaar numbers can open Jan Dhan bank accounts by submitting two copies of signed photographs at a bank branch.

"RBI has issued guidelines dated August 26, 2014, where people who do not have officially valid documents or Aadhaar numbers can still get bank accounts opened by submitting two copies of signed photographs at the bank branch," an official statement said.

However, it said these accounts will be called small accounts and shall normally be valid for 12 months and shall be continued subject to showing of proof that he/she has applied for any of the officially valid document within 12 months of opening of such 'Small Account'.

These accounts have certain limitations such as balance at any point of time should not exceed Rs 50,000, total credit in one year should not exceed Rs 1 lakh, and total withdrawal should not exceed Rs 10,000 in a month, it said.

It also said the existing account holder need not open another bank account to avail of benefits under Pradhan Mantri Jan Dhan Yojana (PMJDY).

As on date 4.18 crore accounts have been opened under PMJDY.
"In fact insurance benefits are available through the RuPay Card. The existing account holders can submit an application to the concerned branch to enable them to get a RuPay Debit Card in order to avail of the benefits of insurance under PMJDY," it said.

Micro credit limit of Rs 5,000 can also be extended in existing bank accounts on application depending on the satisfactory conduct of the account, it said.
The statement said that there had been complaints from some places about the availability of the account opening forms due to huge rush and certain people taking advantage of such situation.

In view of this, an advertisement has been issued in all major newspapers where the account opening form has been published, it said.

Anybody desirous of opening an account can come and take this application form to the nearest bank branch/bank mitr for opening the account, it said.

This one page account opening form is also available on the website of the Department, it added.

Govt yet to decide on who will foot the bill for Jan Dhan Yojana life cover

The Government is yet to firm up the modalities for life insurance cover of ₹30,000 announced by Prime Minister Narendra Modi on August 28 – the launch date of the Pradhan Mantri Jan Dhan Yojana (PMJDY). The Department of Financial Services (DFS) has forwarded a couple of proposals to Finance Minister Arun Jaitley who, as head of the PMJDY mission, is expected to take the final call, official sources said. The proposals under consideration include dipping into the social security fund managed by Life Insurance Corporation and setting up a joint fund by the LIC and the Government.

The basic question that remains unanswered is who will foot the insurance premium bill for the life cover to be provided to 7.5 crore unbanked families in the country.

Indications are that it will fall entirely on LIC, which had initially expressed reservations on bearing this burden. 

As of September 10, as many as three crore PMJDY accounts have been opened across the country — 1.9 crore in rural areas and 1.1 crore in urban areas.

However, the main area of concern is that RuPay cards have been issued to only 33 lakh account-holders, which is about 10 per cent of the accounts opened under PMJDY. 

As the RuPay card is the basis of all benefits attached to the PMJDY, the Finance Ministry has asked banks to sort out the issues that come in the way of speedier implementation of the programme.
These include personalisation of RuPay cards, devising proper distribution of RuPay cards and ensuring that industry be informed about projections for RuPay cards.

Wednesday, September 3, 2014

Jan Dhan Yojana: Clarity awaited on insurance

So far, more than 25 million bank accounts have been opened under the Jan Dhan Yojana and all these individuals will be eligible for life covers of Rs 30,000 by LIC

 It might take time to offer life and accident insurance covers under the Pradhan Mantri Jan Dhan Yojana to those opening bank accounts under the scheme, as various issues in this regard are yet to be resolved.

Under the scheme, which seeks to open 75 million accounts by January 26, 2015, an accident insurance cover of Rs 1 lakh is provided with every RuPay debit card offered by the National Payments Corporation of India (NPCI).

NPCI officials said HDFC Ergo General Insurance would provide the accident cover under the scheme. This will cover accidental deaths, provided the debit card is swiped within 45 days of its issuance and is in an active state.

HDFC Ergo did not respond to a mail seeking details of the cover.

There is also a proposal for an additional accident cover of Rs 1 lakh for opening bank accounts within a stipulated period. While general insurance executives said state-owned general insurers would provide this, no official announcement or communication has been sent by the finance ministry to the companies concerned.

“Though this proposal was discussed in meetings with the finance ministry, it hasn’t issued any letter on when it would be launched and whether it would be completely free for customers,” said a senior insurance executive.

Sources said the general insurers selected for these covers were yet to receive any official communication from the ministry saying they had been selected for this and would have to make payments during receipt of claims.

While debit cards and insurance covers (at least a Rs 1-lakh accident cover) will be provided to all accountholders under this scheme, insurance officials say this might not be done immediately. An official said as the volumes were huge, they would be provided the complete kit within the next few weeks.

Further, the life insurance cover of Rs 30,000 is still being worked out, in terms of the premium collection, amount and the mode of payment.

Life Insurance Corporation of India (LIC), which will offer the cover to all individuals who open bank accounts under the financial inclusion scheme by January 26, 2015, has held a series of meetings with finance ministry officials on the collection of premia and administration of the scheme. A decision on the premium amount and the mechanism to pay claims is still awaited; a clarification is expected in the next three days.

So far, more than 25 million bank accounts have been opened under the Jan Dhan Yojana and all these individuals will be eligible for life covers of Rs 30,000 by LIC.

There have been talks of a minimal payment for this scheme by individuals. Also, the claim settlements could be through the Aam Aadmi Bima Yojana (AAMY), a social security scheme administered by LIC.

A life insurance cover wasn’t part of the Jan Dhan Yojana announced in Prime Minister Narendra Modi’s Independence Day address; it was announced on August 28, when the scheme was officially launched.

The scheme is expected to boost insurance penetration in India. Insurance penetration (premia, as percentage of gross domestic product, fell to 3.9 per cent in 2013-14, compared with four per cent in 2012-13, according to a Swiss Re sigma study). On the life insurance front, insurance penetration in India was 3.1 per cent; for non-life insurance, it was 0.8 per cent.

Monday, September 1, 2014

Jan Dhan Yojana: Government loads up RuPay with Rs 30K LIC cover plus Rs 1 lakh accident insurance


RuPay cardholders will have dual insurance covers, with the government roping in the Life Insurance Corporation of India a day before unveiling its financial inclusion programme Pradhan Mantri Jan Dhan Yojana.

LIC, the country's largest financial institution, will offer a life cover of Rs 30,000 while HDFC Ergo will provide a Rs 1-lakh personal accident cover to RuPay cardholders.

The massive financial inclusion project to be launched across India on Thursday will give unbanked customers RuPay debit card, launched by the National Payments Corporation of India (NPCI), along with free insurance cover and new bank account.

NPCI had entered into a three-year agreement with private general insurance HDFC Ergo and a similar agreement will be signed with LIC.

Senior officials said the government had decided to improvise the scheme by providing additional insurance cover. The government approached LIC after first picking the state-owned general insurance company New India Assurance for providing additional cover of Rs 1 lakh.

"After a day-long meeting with senior officials from government-owned banks, NPCI, LIC and government-owned general insurance companies on Wednesday evening, LIC was asked to provide additional insurance cover to RuPay cardholders," said a finance ministry official, who did not wish to be named.

LIC will provide unconditional cover to RuPay cardholders. HDFC Ergo will provide cover to the cardholders in case of death or permanent disability. As per the agreement between HDFC Ergo and NPCI, a claim will be disposed only if the card is active. A card will be considered active if the cardholder has swiped it within 45 days of making a claim. The NPCI is in talks with HDFC Ergo to improvise the scheme so that the claim can be made if the card was swiped within the preceding 90 days.

The NPCI has issued 23 million cards, and it is estimated that 150 million new bank accounts will be opened and as many new cards will be issued in the unbanked areas by March 2016, with the NPCI paying the premium instead of the cardholder.

The Jan Dhan Yojana aims to cover 60% of the country's population that does not have access to formal banking services. Under the scheme, every household will be provided one bank account within a year.