Government Asks Private Banks To Participate More In Financial Inclusion Schemes

The government, represented by Department of Financial Services Secretary Vivek Joshi on Tuesday, told private sector banks that they must increase their participation in financial inclusion schemes, particularly the Pradhan Mantri Jan Dhan Yojana and Jan Suraksha Schemes.

Jan Suraksha schemes refers to the bouquet of social welfare schemes such as Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and the Atal Pension Yojana.

Public sector banks have done a lot of outreach for popularisation of financial inclusion schemes, while participation from mainstream private banks (except IDFC First Bank) is lacking, Joshi noted while speaking at the 20th Global Inclusive Finance Summit.

Barring Pradhan Mantri Mudra Yojana, private banks need to participate more in furthering the financial inclusion aim, he said. Mudra offers small ticket loans to micro entrepreneurs.

"...There is a lot of catching up (to be done) by private sector banks with respect to their public sector counterparts in this aspect...I would request the private sector banks to increase participation in PMJDY and Jan Suraksha Scheme in order to realise the ambitious goals which the government has set," he said in New Delhi on Tuesday.

He also told banks to increase their insurance and pension coverage, which would help operationalise inoperative accounts, encourage nominations for accounts and create awareness on cyber fraud.

Currently, 17-18% of Jan Dhan accounts are also inoperative, he said.

Noting the success of the Pradhan Mantri Jan Dhan Yojana, Joshi said that the scheme now has over 51 crore persons with zero balance accounts and 55% of these are owned by women.

"At present, we are adding three crore Jan Dhan accounts a year and we are not far from a situation where all the adults in the country will be covered with at least one basic bank account."