i nc lu s i ve f i nanc e i nd i a re port 2014
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various aspects of household security through the range of
products and enabling infrastructure to be implemented
by the PMJDY. A more detailed implementation plan is
given in Appendix 2.3.
2.7 FINANCIAL INCLUSION MISSION:
CHALLENGES AND CRITIQUES
The PMJDY campaign has revealed many differences in
approach from the earlier financial inclusion schemes
apart from setting a definite date for the coverage of
all households and the provision of a range of products
and services to them. The seriousness of the intent was
evidenced by the fact that over 15 million accounts
were claimed to have been opened on the day of the
launch itself.
24
However, very soon thereafter there was
speculation about the number of accounts actually opened,
the degree of duplication and coverage of already existing
accountholders as indeed the paltry remuneration given
to the BC agents involved. In addition to these doubts
related to target-chasing reminiscent of the loan melas—
only on a much larger scale—various commentators have
raised a host of serious questions about the longer-term
implementation process and sustainability.
On the eve of the launch of the PMJDY, Shetty and
Deokar (2014) had argued that a serious cleavage appears
to have resulted between the government machinery
adhering to traditional development objectives and the
language of the market of the RBI’s new leadership. In
this connection, they state that the Mor Committee
(2014) took a very ideological position that the poor and
vulnerable sections had to be pushed to the marketplace
T
ABLE
2.3
Learning from the Past Campaigns and Shift in Approach
S. No. Earlier approach (Swabhimaan)
New approach (PMJDY)
1.
Villages with population greater than 2,000 covered;
Focus on household; Sub Service Area (SSA) for coverage
thus limited geographical coverage
of the whole country
2.
Only rural
Both rural and urban
3.
Bank Mitr (Business Correspondent) was visiting on
Fixed point Bank Mitr (Business Correspondent) in each SA
fixed days only
(3 to 4 villages on an average) to visit other villages in the SSA
on fixed days SA comprising of 1,000–1,500 households
4.
Offline accounts opening-technology lock-in with the vendor Only online accounts in CBS of the bank
5.
Focus on account opening and large number of accounts
Account opening to be integrated with DBT, credit, insurance
remained dormant
and pension
6.
Inter-operability of accounts was not there.
Inter-operability through RuPay Debit Card, AEPS, etc.
7.
No use of mobile banking
Mobile wallet and USSD-based mobile banking to be utilized
8.
Cumbersome KYC formalities
Simplified KYC/e-KYC in place as per RBI guidelines
9.
No guidelines on the remuneration of the Bank Mitr
Minimum remuneration of the Bank Mitr (Business
(Business Correspondent). Banks went generally with
Correspondent) to be Rs. 5,000 (fixed + variable) with structured
Corporate BCs who used to be least expensive to them.
monitoring mechanism at centre, state and district levels.
10.
A recent RBI survey finds that 47% of Bank Mitr
Viability and sustainability of Bank Mitr (Business
are untraceable.
Correspondent) is identified as a critical component.
11.
Monitoring left to banks
Financial Inclusion campaign in Mission Mode
12.
Financial literacy had no focus
The rural branches of banks to have a dedicated Financial
Literacy Cell
13.
No active involvement of states/districts.
State-level and district-level monitoring committees to
be set up.
14.
No brand visibility of the programme and Bank Mitr
Brand visibility for the programme and Bank Mitr
(Business Correspondent).
(Business Correspondent) proposed.
15.
Providing credit facilities was not encouraged.
OD limit after satisfactory operations/credit history of 6 months.
16.
No grievance redressal mechanism.
Grievance redressal at SLBC level in respective states.
Source
: PMJDY Mission Document, Department of Financial Services, (2014).
