TeaThere is no doubt that the government has done a commendable job on financial inclusion. But now it has to be ensured that all these budding customers do not face harassment at the hands of lenders or disincentives to actually operate their accounts. According to news reports and anecdotal evidence, disinfectants are very important at this time.
According to data available on the website of the government’s flagship financial inclusion scheme, Pradhan Mantri Jan Dhan Yojana, around 48 crore accounts are opened Under the initiative, with a balance of Rs 1.8 lakh crore between them. It is one thing to open these accounts and transfer funds into them; Encouraging account holders to use them is another.
One of the major issues appears to be the ambiguity of the rules. In the last few years, the government has merged several Public Sector Banks (PSBs) to improve their profitability and operational efficiencies, a move that result oriented, However, it also appears that users have not been informed about the complications these mergers may cause.
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new rules, new problems
Suppose a person has a Jan Dhan Yojana account in Union Bank of India and later opens a salary account in Corporation Bank. Now that the two banks have been merged, that user has two accounts in the same bank – this is not allowed as per RBI.
According to RBI rules, “The holder of the Basic Savings Bank Deposit Account shall not be eligible to open any other Savings Account in that bank. If a customer has any other existing savings account with that bank, he/she needs to close it within 30 days from the date of opening the original savings bank deposit account.
As long as the user is informed it will be fine. The problem is that many are not being told. Customers come to know that they have two accounts in the same bank only when they visit their branch to do some other transaction. They are then asked to close their salary account (where they get regular income) or PMJDY account (where whatever subsidy the government gives is transferred).
How do they choose? More importantly, why should they do this? The government should have detected these knock-on effects before merging the banks. Now that the merger is done, the government should at least ensure that another account is opened in a different bank at no cost to the customer.
The issues with PMJDY accounts do not end here. As per rules, PMJDY accounts can have zero balance and do not attract penalty. however, some news report Users are said to be being charged a penalty for making more than four monthly debits.
In the era of UPI (Unified Payments Interface) transactions, users of PMJDY accounts are finding it much to their dismay because of usage charges on the many small UPI transactions they do every month. This is doubly painful for users who did not go in search of a bank account, but created one for themselves during the PMJDY drive.
Perhaps this is the reason why nearly one-fifth of the PMJDY accounts are inactive Reasons for lack of usage or why 4.44 crore account holders have not renewed their PMJDY RuPay Debit Card.
Banks deny charging any fees, but many people complain that their money is deducted when it shouldn’t be. The first step is making the rules very clear. It is unfair to expect a new bank to be smart enough to figure out all the rules for itself.
Apart from burdening those at the bottom of the pyramid, there is another way banks are troubling customers: KYC (Know Your Customer) norms for locker services. In August 2021, RBI has a new set of rules Regulating locker services provided by banks. One of the stipulations in these rules was that “at the time of allotment of a locker to a customer, the bank shall enter into an agreement with the customer to whom the locker facility is provided, on paper duly stamped.”
But what happens to those who already have locker services with banks? They are denied access to their lockers until they return with an agreement on stamped paper. Furthermore, there does not seem to be any agreement on what the value of this stamp paper should be. news report Show that branches of the same bank in different states charge different rates of stamp paper.
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Standardization of RBI is necessary
RBI needs to come up with a standard and disseminate it far and wide. People cannot be deprived of their valuables due to lack of operational clarity post merger. Such moves create an aversion to banking services, which in turn creates an incentive to keep cash and valuables at home – the first step in a very slippery slope towards black money hoarding.
All this, of course, is not counting the flood of spam calls and messages banks and their representatives send to customers asking if they want a credit card or loan. “Hello, you have been pre-approved for…” is a very common message heard when answering a call from an unknown number. This too needs to be stopped.
Banking is an integral sector, and improving financial inclusion among the unbanked is an essential function that public sector banks perform. Obviously, they don’t want to do it for free, but either way, PMJDY subscribers shouldn’t have to pay; It is the government that is needed. Furthermore, improving customer-awareness initiatives and phasing out spam would show that the banking sector has truly matured.
Thoughts are personal.
(Edited by Zoya Bhatti)