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Jan Dhan controversy may figure in Finance Ministry, bankers meet tomorrow

The controversy over some bankers depositing Re 1 in Jan Dhan accounts to keep the number of zero balance account low is likely to figure at the quarterly meeting of PSU banks' heads with Finance Minister Arun Jaitley tomorrow.

By: | New Delhi | Published: September 15, 2016 4:22 PM
The controversy over some bankers depositing Re 1 in Jan Dhan accounts to keep the number of zero balance account low is likely to figure at the quarterly meeting of PSU banks' heads with Finance Minister Arun Jaitley tomorrow. (PTI) The controversy over some bankers depositing Re 1 in Jan Dhan accounts to keep the number of zero balance account low is likely to figure at the quarterly meeting of PSU banks’ heads with Finance Minister Arun Jaitley tomorrow. (PTI)

The controversy over some bankers depositing Re 1 in Jan Dhan accounts to keep the number of zero balance account low is likely to figure at the quarterly meeting of PSU banks’ heads with Finance Minister Arun Jaitley tomorrow.

The meeting will review the first quarter performance of public sector banks and financial institutions, sources said.

Besides, they said, the meeting will discuss credit growth and bad loan situation, adding that various recovery measures by banks as well as the legislative steps taken by the government to expedite recovery are also part of the agenda.

The meeting assumes significance in the light of recent report in a section of media citing specific instances where Re 1 or more was deposited by bankers themselves to bring down the number of zero balance accounts.

In a late night clarification yesterday Finance Ministry said that it will ascertain facts with regard to instances of bankers depositing small amounts in the Jan Dhan accounts to reduce the number of zero balance accounts.

Observing that there was no requirement of minimum balance in the Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts, the Ministry had said “in view of the specific instances mentioned (in a media report), facts are being ascertained to assess if there has been any misunderstanding at the branch level of the objectives of the scheme.”

PMJDY, the flagship financial inclusion scheme of the government, aims to provide financial services, deposit accounts, remittances and overdraft facility.

It also seeks to inculcate a widespread banking habit and create credit histories of account holders, thereby facilitating them to access overdraft/credit from banks.

The meeting will also discuss various steps taken to expedite recovery of bad loans, the sources added.

Gross NPA of the public sector banks have surged from 5.43 per cent (Rs 2.67 lakh crore) in 2014-15 to 9.32 per cent (Rs 4.76 lakh crore) in 2015-16.

Many banks including Bank of India, Dena Bank, and Central Bank of India, reported losses for the quarter ended June 30, due to a sharp jump in provisions for NPAs on account of an asset quality review mandated by the RBI in December.

In a bid to shore up cash-strapped public sector banks, the government last month announced infusion of Rs 22,915 crore capital in 13 lenders including SBI and Indian Overseas Bank to revive loan growth that has hit a two-decade low.

This is the first tranche of capital infusion for the current fiscal and more funds would be provided in future depending on the performance of PSBs.

Besides, the meeting will take stock of various schemes such as Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY).

Jaitley will also review the progress made with regard to Micro Units Development & Refinance Agency (MUDRA) and Stand Up India programme, the sources said.

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