Jan Dhan Yojana fails to deliver!

• Pradhan Mantri Jan-Dhan Yojana (PMJDY), launched by the Prime Minister of India Narendra Modi on Aug 28, 2014, is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner. Account can be opened in any bank branch.
• The plan envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit, insurance and pension facility. In addition, the beneficiaries would get RuPay Debit card having inbuilt accident insurance cover of र 1 lakh.
• PMJDY accounts also allow an overdraft facility of up to Rs 5,000 in one account per household, preferably held by a woman member. 
• The Prime Minister personally mailed to Chairmen of all PSU banks to gear up for the gigantic task of enrolling over 7.5 crore (75 million) households and to open their accounts. He categorically declared that a bank account for each household was a "national priority". 
• Total of 7 Crore (70 million) bank accounts have been opened with deposits totaling more than ₹5,000 crores as of Nov 6, 2014. As the government met the target, Govt revised the target for opening of bank accounts under the PMJDY, 7.5 crore to 10 crore by Jan 26, 2015. Almost 75% of the accounts or 5.66 crore, have no money.
• In the name of financial inclusion, the government has created more problems for the poor. The project is well intentioned and perhaps necessary for a country in which 40% of the population is unbanked. But, in the hurry to roll out the project, proper communication, especially to the undereducated and the poor, could not happen. Significant percentage of people haven't returned to the branches to do serious transactions.
• The scheme has been criticized as an effort to please voters that has created unnecessary work-burden on the public-sector banks. It has been claimed that the poor deserves food more than bank accounts and financial security. Further, these accounts have not yet added considerable profits to PSU banks. Offers like zero balance, free insurance and overdraft facility would result in duplication. Very few people are eligible to get the life insurance worth ₹30,000 with a validity of just five years. The claimed overdraft facility has been completely left upon the banks and only those people would get the overdraft facility with satisfactory transaction record.
• While JDY has inflated the number of account holders, it has done nothing to boost the volume of transactions. As on March 24, 2017, public banks, regional rural banks and 13 private lenders reported that 92,52,609 accounts were frozen under JDY due to lack of transactions.
• In the first two weeks of demonetisation, the total balance in no-frills accounts under the JDY increased to Rs 72,834.72 crore, a jump of Rs 27,198 crore in 14 days, of which most money was deposited in an effort to convert black money into white money by black money holders. The scheme, took 16 months until Dec 2015 to accumulate a balance of Rs 27,283 crore, 
• The total cost of operation of Jan Dhan accounts by State Bank of India is Rs 774.86 crore, Parliament was informed on Mar 28, 2017. Banks had to incur a cost of at least Rs 200 on opening each account apart from the manpower cost and this totals roughly Rs 1,500 crore for just opening the accounts.
• The profligacy of Modi on his hurried, ill conceived schemes without adequate preparation and then projecting failed schemes as successes impoverishing nation is highly despicable. The quantum of money spend for campaign & publicity by all related agencies is too much for developing economy like India. India needs a statesman as Prime Minister, not a rogue politician.
• Public Expenditure Wastage Control Commission must scrutinize all waste expenses of public money by any one and every one for compliance of procedure and economies of expenditure observed including PM & CM. And if not followed, it must levy immediate financial penalties on such person and also recommend to competent higher authorities to consider and take punitive steps against such persons. All within a time frame of three months. Only disaster management expenses, certain defense expenditures and nuclear related expenses could be exempted.

Thrift is my guiding principle ... Indira Gandhi 
What ever is worth doing, is worth doing slowly.

My View:

Banks are ill equipped to handle this huge number of new account holders leading to deteriorating of services. The costs of managing these accounts are huge for already NPA stressed banks. Most of the Rs.5,000 over drafts per account will turnout to be irrecoverable and unless centre absorbs and writes off these amounts bank's margins will again come under severe stress. Poor banking connectivity is another constraint. Significant number of people had opened multiple accounts under the scheme, adding to the existing problem of dormant accounts. When Indira Gandhi got elected from Medak (Telangana) in 1980 she compelled PSU banks to open branches in Medak district. After few years almost all branches were wound up would due to lack of business and viability, booking significant losses. Needless to say any scheme prior to implemented should be researched, tailored to suit local needs and planned to implement over a time frame for producing lasting results. But unfortunately almost all Modi's schemes are announced hurried and launched without any preparation with massive national & international publicity costing hundreds of crores of rupees to nation and then they just fail. This is no way a democratic government should function. Hence, every government expenditure must have prior legislature approval and budget provision voted so that sufficient discussion of priorities takes place before announcement and implementation. The only exception could be defense, disaster management and nuclear related matters.