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Writer's pictureRISHI KORDE

SBI MD links Jan Dhan account growth to India's financial inclusion.

SBI Managing Director Highlights Jan Dhan Accounts' Role in India's Financial

The Managing Director of State Bank of India (SBI), Ashwini Kumar Tewa



ri, emphasized the integral connection between the growth of Jan Dhan accounts and India's financial inclusion journey. Speaking about the achievements of the Pradhan Mantri Jan Dhan Yojana (PMJDY) in the Rajya Sabha, Minister of State for Finance Dr. Bhagwat Kishanrao Karad revealed that the scheme, in its ninth year, has surpassed 500 million bank accounts, accumulating deposits exceeding ₹2 trillion.

Tewari underscored the evolution of Jan Dhan accounts from zero-balance accounts to becoming eligible for various lending services as their balances increased. He also acknowledged the influence of mudra schemes in propelling the expansion of these accounts. Ratan Kesh, Executive Director of Bandhan Bank, echoed Tewari's sentiments on the success of PMJDY, stating that financial inclusion has been broadly addressed in the country, and the focus has shifted towards financial empowerment.

PMJDY, initiated on August 28, 2014, under Prime Minister Modi's leadership, was designed as the National Mission for Financial Inclusion to ensure universal access to banking facilities. Despite its considerable achievements, Minister Karad mentioned that, as of November 22, 2023, 43 million PMJDY accounts still maintain a zero balance.

Speaking at the 20th Global Inclusive Finance Summit, Financial Services Secretary Vivek Joshi expressed concern over the limited involvement of private sector banks in the government's financial inclusion efforts. Joshi urged banks and financial institutions to address three key areas: facilitating Know Your Customer (KYC) processes for inactive accounts, promoting nomination for bank accounts, and reinforcing cybersecurity measures.

Regarding UPI credit, Shalini Warrier, Executive Director of Federal Bank, highlighted its early stages, with only a few banks launching the scheme. She identified credit on UPI as a potential solution, enabling the use of analytics to understand savings account behavior and cash on delivery patterns for a more comprehensive understanding of individual financial concerns.

The article also touched upon concerns raised by Financial Services Secretary Vivek Joshi at the Global Inclusive Finance Summit. He emphasized the need for greater participation by private sector banks in the government's financial inclusion initiatives. Joshi called for concerted efforts in three critical areas: streamlining KYC processes for inactive accounts, encouraging the nomination of bank accounts, and bolstering cybersecurity measures.

The Executive Director of Federal Bank, Shalini Warrier, addressed the nascent stage of UPI credit, noting that only a few banks have introduced this scheme. She suggested that expanding credit on UPI could be beneficial, leveraging current analytics to gain insights into savings account behavior and cash-on-delivery patterns. This, she argued, would enhance understanding of individual financial behaviors.

In summary, the Managing Director of SBI, along with other industry leaders, emphasized the symbiotic relationship between the growth of Jan Dhan accounts and India's strides in financial inclusion. While celebrating the milestones achieved by PMJDY, the discussions at the summit also shed light on challenges and areas that require further attention to ensure a more comprehensive and empowered financial landscape in the country.

The remainder of the article addresses the concerns and recommendations voiced by speakers at the Global Inclusive Finance Summit. Financial Services Secretary Vivek Joshi urged financial institutions to work on improving three key aspects: facilitating the completion of KYC procedures for dormant accounts, promoting the nomination of bank accounts, and strengthening cybersecurity protocols.

Shalini Warrier, Executive Director of Federal Bank, offered insights into the early stages of UPI credit, highlighting its limited adoption among banks. She suggested that expanding UPI credit could be a strategic move, enabling the application of analytics to better understand individual financial behaviors, including savings account dynamics and cash-on-delivery patterns.

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