“The Pradhan Mantri Jan-Dhan Yojana has brought significant improvements in the way bank accounts are opened in the country,” says Rajesh Aggarwal, Joint Secretary, Department of Financial Services, Ministry of Finance, Government of India.
What is your view of financial inclusion in India?
Our Prime Minister has said that financial untouchability is as bad as social untouchability. Non inclusion in the financial sector means that people are unable to open a bank account; they don’t have the facility of life or health insurance; they cannot access loan in times of need. Unfortunately, in our country, a large section of the population has hardly any access to the financial sector. Before the Aadhaar number system or the Pradhan Mantri Jan-Dhan Yojana came into being, a simple task like opening a bank account was difficult for people existing in the marginalised sections of our society. So much paperwork would be involved in opening of bank accounts that most poor folks could not cope. The Pradhan Mantri Jan-Dhan Yojana has brought significant improvements in the way bank accounts are opened in the country. Probably for the first time in our history, the bankers went to the rural people, instead of the rural people approaching the banks, and requested them to begin using various financial services. This scheme uses latest communications and IT systems to ensure that the banks are able to provide efficient services to the people at lowest possible cost.
The installation of new ATMs in the rural areas is being envisaged in the Pradhan Mantri Jan-Dhan Yojana. What kind of progress is being made in this area?
Government of India. If the branch is 20 kms away, the villager will not be able to use the banking services, so we certainly require more ATMs. We are closely monitoring the the Bank Mitra programme, in which employees associated with any particular bank carry micro-ATMs with them. These micro-ATMs are interoperable and provide the convenience of doorstep banking to the people in rural areas. They help in easy deposits, withdrawals and remittances. We are also providing people in rural areas with ATM cum debit RuPay cards. It is often the case that poor people are unable to remember their pin numbers, so we are trying to get all our ATM machines Aadhaar enabled. This will ensure that the poor people can use these machines through two different options as per their convenience: Fingerprint+Aadhar or Card+Pin.
Your Department has started the Atal Pension Yojana and other Social Security Schemes for helping the poor. Please tell us about these initiatives.
This is primarily a government backed pension scheme targeting the unorganised sector. Originally it was mentioned in the 2015 budget speech of the Finance Minister in February 2015. It was formally launched by Prime Minister Shri Narendra Modi on 9 May in Kolkata. As of May 2015, only 11% of India’s population has access to any kind of pension scheme—the Atal Pension Yojana aims to increase the number. Under this scheme the subscribers will get minimum monthly pension ranging between Rs. 1000 to Rs. 5000 per month. Government will contribute a part of the pension amount on behalf of the early bird subscribers. The scheme is linked to back accounts opened under the Pradhan Mantri Jan Dhan Yojana scheme and the contributions will be deducted automatically. Another scheme that we have launched is the Pradhan Mantri Jeevan Jyoti Bima Yojana, under which a payment of Rs. 200,000 is made to the nominee in case of death. The annual premium for this scheme is just Rs. 330. Then there is the Pradhan Mantri Suraksha Bima Yojana, which is available to people between 18 and 70 years of age with bank accounts. It has an annual premium of Rs. 12 only. In case of accidental death or full disability, the payment to the nominee will be Rs. 200,000 and in case of partial disability Rs. 100,000. This scheme has been a runaway success, with more than 7 crore policies issued till date.
Before coming to the Ministry of Finance, you served as the IT Secretary in Maharashtra. As IT Secretary, what steps did you take to promote financial inclusion in the country?
I was very focussed on BPR (Business Process Reengineering) and simplification of procedures before initiating e-governance projects across various departments and organisations. Unless there is e-governance, you can’t create viable systems for financial inclusion in a country that is as large and populous as India. I tried to develop systems to ensure that the Bank Mitras (CSC VLEs and others) were able to work properly in the field. I was enthusiastic about the Aadhaar project from the very beginning, and we did lot of work in getting the Aadhaar seeded into different government databases, initialing eKYC based bank account opening and so on. In fact, now I am happy to see Aadhaar enabled bank accounts being used for transferring subsidy and benefits in case of LPG Cylinders, MNREGA, and other government schemes.
