It is unfortunate to see bank officials in many parts of the country making one-rupee deposits in Jan-Dhan accounts simply with a view to hide their “zero-balance” status, as an investigation by this newspaper has revealed. The fact of the matter is that the opening of over 24 crore bank accounts, of which some 19 crore have been issued RuPay debit cards and over 50 per cent seeded with the unique Aadhaar identity number of the account-holders, is no mean achievement. That it has happened within a span of two years or so makes it all the more remarkable for a country, where nearly 40 per cent of the population till recently had no access to formal banking. The Pradhan Mantri Jan Dhan Yojana (PMJDY), moreover, aims to go further than just ensuring financial inclusion. It seeks to move to a system of making payments under various government programmes through direct transfers. Alongside reducing leakages in subsidies and other welfare expenditures, the goal is also to migrate to a cashless economy whose knock-on impact on growth cannot be underestimated.
That is precisely also the reason why the attempts at dressing up data is all the more deplorable. It is not clear whether the pressure for this has come from the top or simply acts by over-enthusiastic branch level officials. Either way, they violate basic banking principles — which rest on integrity, trust and transparency. The Indian Express investigation has shown that the account-holders were not even told about the Re one deposits when they were made. It obviously opens up the possibility of one’s account being similarly used to deposit slush funds without that person’s knowledge — and being withdrawn as well. An investigation is due and the officials involved are punished. At the end of day, there is nothing to be ashamed about zero-balance accounts. Financial inclusion is a necessary but not sufficient condition for money to be in accounts. The latter requires generation of jobs and incomes. Zero-balance accounts are a good indicator of that not happening. As a wise central banker once said, finance can facilitate but not lead.
There are critics of PMJDY who say the scheme should not have been implemented through fiat. The counter to that is if there was no push, banks would never have facilitated the opening of these accounts. Financial inclusion is an investment the returns from which are far higher than the ostensible costs imposed on the banking system. In this case, the problem lies not with the scheme, but in the spin doctors.