During the demonetisation period between November 9-December 31 2016, deposits in Jan Dhan accounts had surged, evidently because of their misuse for parking black money. But in the subsequent month, while the deposits in these no-frills accounts inevitably shrank, their number saw an inexplicable jump. And the taxman is curious.
Banks opened as many as 1.1 crore Jan Dhan accounts between December 28 and January 25 — way above the the monthly average of less than 50 lakh in the second half of 2016-17—and nearly all of them were opened after the expiry of the December 31 deadline for depositing old, high-denomination currency notes. Interestingly, while so many accounts were opened, the total balance in all the Jan Dhan accounts still dropped R3,712 crore during this period to R67,325 crore, showed the official data.
“The Jan Dhan accounts are being closely scrutinised by the tax department. As and when required, banks will be asked to provide clarity on all those issues where doubts are raised. This (the massive opening of accounts) is a curious thing,” a senior government official told FE.
Importantly, the opening of Jan Dhan accounts after January has again slowed to a more reasonable level — 47 lakh between January 26 and February 22 and only 39 lakh between February 23 and March 29.
A senior official with a public-sector bank said most of the employees, who were busy handling the increased work load after the note ban, were relatively free to open more Jan Dhan accounts after December. Also, the increased pressure from the government to open bank accounts for even informal sector employees for wage payments, especially in sectors like textiles and garments, could be among the reasons.
However, these still don’t fully explain the sudden slowdown after January and hence add to the taxman’s discomfiture.
This has brought back focus on the need for an even closer scrutiny of Jan Dhan accounts–originally intended to spur financial inclusion by making banking facility available to the poor–to curb potential misuse by unscrupulous elements.
The opening of Jan Dhan accounts acquired phenomenal speed after Prime Minister Narendra Modi had launched the scheme in August 2014, with millions of accounts being added every month. The pace, however, started slowing since late 2015, as most of the intended beneficiaries were already covered. According to official data, the government’s target of opening one account per household was achieved by January 26, 2015, barring a few areas in Jammu & Kashmir and naxalism-affected districts.