Thursday, Sep 29, 2022

Decoding post-demonetisation boom in the Jan Dhan balance

The fortnight after the scrapping of Rs 1,000 and Rs 500 notes saw a massive jump in deposits in these accounts, even as significantly fewer than average new accounts were opened.

demonetisation, demonetisation jan dhan, jan dhan accounts, jan dhan money, demonetisation black money, black money jan dhan accounts, india news, indian express news Since November 9, the number of zero-balance accounts dropped by 4.54 lakh — a net gain of 0.33% over two weeks. (Representational)

In the first two weeks of demonetisation, the total balance in no-frills accounts under the Pradhan Mantri Jan Dhan Yojana increased by 60% to Rs 72,834.72 crore. That is a jump of Rs 27,198.11 crore in 14 days. To put this in perspective, the scheme, launched in August 2014, took 16 months until December 2015 before it could accumulate a net balance of Rs 27,283.05 crore.

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Given that there were also some withdrawals in these two weeks, the actual deposits are likely to have been higher, even if not significantly. Despite the deposit rush, banks were able to open 16.48 lakh new accounts in this two-week period, taking the number of accounts under the scheme to 25.68 crore. Between April and November 9, 13.28 lakh accounts were opened per week on average.

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Since November 9, the number of zero-balance accounts dropped by 4.54 lakh — a net gain of 0.33% over two weeks. This was higher than the weekly average of 0.10% observed between April and November 9. As a result of the deposit boom, the average balance that had hovered between Rs 1,697 and Rs 1,799 this financial year, has now jumped to Rs 2,836.64.


Three states — Karnataka (112%), Gujarat (111%) and Manipur (104%) — more than doubled their share of PMJDY balance in this two-week window. Rajasthan (73%), Haryana (68%), Bihar (65%) and Maharashtra (63%) also registered a jump higher than the national average of 60%. West Bengal (47%) and Uttar Pradesh (57%) recorded a less prominent swing, perhaps due to their larger account base.


Mizoram was the only state where more money was withdrawn than was deposited — and the net balance came down by Rs 1.35 crore between November 9 and November 23. Among the larger states, Chhattisgarh recorded the least increase in deposit — Rs 401.81 crore or just 28.32%. At least 10 banks more than doubled their deposits under the scheme. Rural and private banks showed the steepest gains. Public sector banks collectively remained below the national average.


The State Bank of Mysore made the most spectacular gain in the rural regional sector with a 12-time jump — from Rs 14.45 crore to Rs 173.18 crore. Union Bank (616%) and Bank of Maharashtra (322%) followed in terms of the sharpest growth in the rural sector. Among the private banks, IndusInd (326%), Karur Vysya (128%) and Axis (102%) were the top gainers.

First published on: 29-11-2016 at 12:35:20 am
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