An Indian Express report on Tuesday (today) has revealed the story of how bankers are depositing small amounts, as low as one rupee, in several zero balance accounts opened in their branches under Prime Minister Narendra Modi’s 2014 Jan Dhan Yojana scheme. This raises some serious questions on the larger direction of the ambitious bank account opening programme.
According to the report, “bank officials are quietly making ‘one-rupee’ deposits, many from their own allowances, some from money kept aside for office maintenance,” to show lesser number of zero balance accounts in their branches to their bosses (in the case of state-run banks, the boss is the government).
Further, the Express report, quoting information received from an RTI query, says that 18 public sector banks and their 16 regional rural subsidiaries held Rs 1.05 crore Jan Dhan accounts with deposits of one rupee.
Revolutionary bank scheme
Before we look at the findings of the report in detail, let’s get one thing clear. Jan Dhan is the biggest bank account opening drive that carried the potential to introduce millions of unbanked population to the formal world of banking. It also helped to lay out a bank account network to enable the larger subsidy reforms based on the Aadhaar-based Direct Benefit Transfer (DBT).
Many beneficiaries, who have opened accounts under the Jan Dhan programme, have started receiving subsidy money in their accounts under DBT, especially in LPG. This will be followed up by food, fertilizer subsidies also in the future. International agencies too have lauded the initiative as a revolutionary one. Even though, opposition parties argue that what the Modi-government has done is merely taking ahead the basic savings bank account opening programme of UPA-government, the determination with which the Modi-government carried out the task deserves to be lauded, without doubt.
But, the other side of it is the perils of rocket-speed implementation of the programme -— something Firstpost has highlighted. This includes massive duplication of accounts -- several accounts that are technically active but in reality dormant with very low value transactions or, some times practically no transactions.
When bankers were forced to, akin to gun-point, to meet the ambitious targets, as the Indian Express report testifies, the middle-level staff were in a state of panic and resorted to all sorts of jugaad, including filling these accounts with One rupee balance from their own pockets to fool the computer. By doing so, these accounts would no longer be shown up as no-balance accounts, which is the idea behind the whole exercise. But, this is akin to fraud because such an exercise is undertaken to fool the system and those individual bank account holders.
One rupee account
As the Express report points out, in many cases even the account holders themselves were unaware how these ‘One rupee’ deposits appeared in their bank accounts. This, if true, is serious violation of the privacy and safety of the individual bank accounts. If the banker can deposit money without customer’s permission and knowledge, one cannot blame the customer if he thinks if the banker would take back money too from his account tomorrow surreptitously.
The fear of the account holders is not unfounded. For this has has happened earlier too in other cases. A series of articles (Read one here) published by Firstpost had exposed how Bank of Baroda froze the accounts of multiple account holders mistaking them to be that of Kingfisher Airline directors, before reversing the action, all without the knowledge of the customer.
In the case of Jan Dhan accounts, such ‘frauds’ may have happened only in, say a few thousand accounts, but it raises an important question about the numbers projected by the Modi-government as far as zero balance Jan Dhan accounts are concerned. In the past, the government had claimed that the number of zero balance Jan Dhan accounts are on a steady decline.
According to the latest government data, there are a total number of 24.27 crore Jan Dhan accounts as on 7 September, with total deposits of Rs 42, 504 crore. Of this, the percentage of zero balance accounts is 24.43 percent. This is compared with the peak of 76.81 per cent in September, 2014. But, since (in the context of Express report) we don’t know how many of these are ‘One Rupee’ accounts, the question on the very relevance of this data arises.
The RBI too had cautioned with regard to the high-speed implementation of the Jan Dhan Yojana programme right at the beginning itself, even while appreciating the intention of the scheme.
This episode causes a major trust deficit as far as the claims made by the government on Jan Dhan, which doesn’t augur well for such an ambitious and revolutionary initiative. The whole exercise, thus, will be looked at with suspicion and mistrust. The government shouldn’t let this happen and order an investigation to the actual state of these accounts and state the facts after correcting the anomaly.
This isn’t the first time the Modi-government’s data-based claims have been questioned. PM Modi’s claim in his Independence Day speech that his government brought electricity to a village, Nagla Fatela, not far from the national capital, after 70-years of Independence, was immediately contested by an Indian Express report.
According to the report, 450 of the 600 homes in the village do not have power. The remaining get electricity but from illegal katia connections, which basically means they connect their homes to a transformer meant to run 22 tube wells and, in return, pay Rs395 for two months to the Dakshinanchal Vidyut Vitran Nigam Limited (DVVNL), the report quoted village pradhan Yogesh Kumar. In the context of Nagla Fatela, questions were raised on even the claims of the government that it has electrified 10,000 out of the 18,000 unelectrified Indian villages.
The point here is that jugaad doesn’t help any government in the long-term and the credit acquired in this manner way doesn’t last long as past experience shows.
The Nagla Fatela and the ‘One Rupee’ Jan Dhan accounts, do offer a compelling reason for the Modi-government to go for a self-introspection on the accuracy of the numbers it projects in public, especially when it comes to big-bang schemes such as Jan Dhan and rural electrification that have received international attention. It’s high time for a fact-check.
(Data contributed by Kishor Kadam)