Dinesh Kamath's Editorial 'Fantastic scheme' that was published in Newsband

Fantastic scheme

Many people in rural as well as urban areas do not have a bank account. The Pradhan Mantri Jan-Dhan Yojana announced by the Prime Minister in his Independence Day speech attempts at extending formal financial services in a country. This will help many without bank account to avail themselves of banking services.

But there is the important question of keeping the first-time bank account holders engaged. Experience suggests that a high proportion of such accounts are hardly used after the initial enthusiasm wears off. There also arises a problem when subsidies, benefits etc., declared by central/state government do not reach the eligible people. Bankers should come forward to help the villagers and illiterate people. One of the main discouraging point in terms of banking services is language. Banks should provide their services in particular Indian languages in respective states.

More than 40 percent of our households are without banking services. This is really a shameful statistics in an age of globalization where the technology has become the buzzword. Some people are enjoying the fruits of advancement of technology while others are not. This service, if implemented properly and efficiently, can do wonders for those who are out of the banking services.

It is indeed a great initiative by the PM. Government is planning to route all the cash based subsidies through banking system thus giving no chance for the middle man to swindle this amount. There should be inclusion of a clause that banks shall not levy penalty for not keeping minimum threshold amount so that poor stands really benefitted.

This is a great initiative because financial inclusion will help many dwellers in the remote corners of our country to benefit. There are many farmers who farm in small scale. They are the people who are hit by the uncertainties of monsoons etc, hence the scheme of insurance and accounts is a must.

This is a path breaking concept of inclusivity and the benefit will be felt more amongst womenfolk. In fact the financial-distress-related suicides in society may come down if the women also have access to financial services, since right now culturally finance is being managed mostly by men. Also the inclusivity is going to bring in a sense of balance as well as multi dimensions in management and investment options in finance.

The scheme is laudable. Its crux lies in implementation when you have a very large percentage of people specially in rural India who are illiterate. The rural people should be given interest-free loans for purchase of hens, goats, cows, etc. This will help them to eke out a living and saving & make them self-sufficient. This will also enhance the agriculture production. Employment guarantee scheme should be extended for farming activities and wages against the scheme should be paid through banks. Soft loans should be extended to small and marginal farmers for starting "Farmers' Co-operative Marketing Societies". Farmers should be trained to market their products through such Societies. This will eliminate middlemen, who cheat farmer as well as consumer.