Saturday, 26 November 2016

Jan Dhan Accounts can make poor Rich overnight

With a view to increasing banking penetration and promoting financial inclusion and with the main objective of covering all households with at least one bank account per household across the country, Pradhan Mantri Jan Dhan Yojna  was launched on August 28, 2014. Such accounts have a deposit limit of Rs 50,000.



World Bank's Jim Yong Kim believed  India's Pradhan Mantri Jan-Dhan Yojana is a model worth emulating across emerging economies. In a panel discussion on financial inclusion and the challenges of de-risking it Kim praised the government's flagship program in October 2016



However most of the accounts were zero balance accounts as no money was deposited in them. 


On November 8, Prime Minister Narendra Modi in a surprise move announced the demonetisation of Rs 500 and Rs 1,000 currency notes and since then, long queues before banks and post offices are seen to deposit.

More surprising yet expected fact was surge in these zero balance accounts. In India black money hoarders with a view to save their currency rushed to look out for these account holders. Deal is simple. The account holder is lured to deposit the money into his account with promise of some commission on withdrawal of money few months later. A convenient route for conversion of currency.
In India when most important asset RIGHT TO VOTE is bought with a bottle of liquor this is not a difficult job. Black Money hoarders taking advantage of poverty and lack of education of Jan Dhan Yojna Account holders.

According to details available on Pradhan Mantri Jan Dhan Yojana website, 25.51 crore accounts were opened throughout India out of which nearly a quarter had not seen any transactions until the PM made his announcement on November 8.  This is what makes the sudden surge even more remarkable. 
Figures say it all. Jan Dhan Accounts have seen a huge surge in deposits, with Rs 21,000 crore being parked in such accounts following demonetisation 

Mamata Banerjee-ruled West Bengal leads the pack of states which has seen the highest deposits so far followed by Karnataka.

"We are getting some complaints that suddenly monies have popped up in the Jan Dhan accounts, so there is a misuse and that is why the rationing in initial days takes place," Finance Minister Arun Jaitley

Now the biggest challange for Government is how to control withdrawal of illicit money from these accounts. There is no way Mr Narendra Modi can stop an account holder to take out the currency post December 31 as that is his fundamental right. To keep an eye on every account has its own administration cost as well as a difficult task. 

The key question is the outcome of Rs 21,000 crore. Though IT officials will know who the account holder is, tracing it back to the actual provider will be a nightmare. Assuming that most of the accounts saw the maximum limit of Rs 50,000 in deposit, officials will have to chase 42 lakh account holders, or around 15 percent of existing tax payer base. Does the income tax department has the wherewithal to chase so many small accounts, or will it focus on bigger deposits? 
Although the task is tough and money might slip out here are few measures PMO might consider to lure Account holders to hold money in their accounts. 

  • Offer to convert the amount deposited in last two months to Fixed Deposit at very high rate of interest say 12% p.a


  • Interest free loan against above deposit for higher education of children and Marriage


  • Interest free loan against above deposit for medical emergencies


  • Free insurance cover upto 5 times of deposit amount to deposit holder


  • Free Medical insurance of 5 times the deposit account to deposit holder & family


  • Free loan  against deposit to buy land and that too at cheaper circle rate 


  • The withdrawals need to be monitored by some IT Data Analytics which can be developed by an expert in the filed to trace final destination of money 


  • The process of online payments for all practical purposes like medical, Agricultural, education, daily needs must reach to every part of country including remote villages so that every withdrawal needs to be explained to the bank.

It is not a difficult job. How Paytm has spread digital payments across in few days

From a roadside egg-seller in Bhopal to a soda hawker in Bangalore, the founder of Paytm has posted snapshots of the unusual array of merchants who ply the teeming streets of India -- and are now turning to his digital payments startup for help.

I have complete faith in our Prime Minister and am sure his management Guru like brains will lead him to best alternative,

I believe in positivity so end with this positive note on new currency note

Fascinating profile of a blind sweet shop owner on the Jammu and Delhi highway. Bhisham Das has honed his sense of touch to detect fake notes of Rs 500 and Rs 1000 and even supports the demonetisation drive. He added that the government must have added some way for the blind to detect what notes are. He’s right. The new Rs 2000 notes have the following features for the visually impaired:

  • Intaglio or raised printing of Mahatma Gandhi portrait, Ashoka Pillar emblem, bleed lines and identity mark
  • Horizontal rectangle with ₹2000 in raised print on the right
  •  Seven angular bleed lines on left and right side in raised print

Only And Only Mr Narendra Modi Can Think On These Lines . Dedicated to role model of many
















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