Banks told to expand digital loans, reach of financial inclusion: DFS secretary

New Delhi: The Center is pressing banks to take financial inclusion beyond opening accounts, asking them to expand digital reach, process end-to-end loans online and expand access to credit for micro-enterprises.

Department of Financial Services (DFS) Secretary Sanjay Lohiya gave the instructions at a review meeting with heads of public sector banks and managing directors of large private sector banks in New Delhi on Tuesday, according to a finance ministry statement.

The meeting reviewed the progress of several financial inclusion schemes including Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana and Pradhan Mantri Mudra Yojana.

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Lohiya also discussed providing working capital loans through channels such as UPI (Unified Payments Interface) lines of credit and credit cards for micro-enterprises. He urged private sector banks to increase their participation in financial inclusion programmes.

Banks have been asked to improve the awareness of claim eligibility under Jan Suraksha insurance schemes so that candidates get benefits after the death of the beneficiary. They were also advised to pay special attention to complaints related to claims under the schemes, according to the statement.

Banks have been asked to register all new PMJJBY and PMSBY beneficiaries through the Jan Suraksha portal. The ministry said the portal will be integrated with all banks and insurance companies to improve data quality and simplify operations.

The meeting also reviewed ways to improve the permanency ratio of Atal Pension Yojana, as well as progress in opening brick-and-mortar bank branches and deployment of bank correspondents in unbanked villages.

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From access to use

The government’s push for financial inclusion is built around schemes that aim to widen access to banking, insurance, pensions and credit.

At its heart is the Pradhan Mantri Jan Dhan Yojana, launched in August 2014 as the National Mission for Financial Inclusion. It aims to provide every unbanked adult with a basic savings account with no minimum balance requirement, free RuPay debit card with accident insurance, overdraft facility up to ₹10,000 and access to direct benefit transfers.

A recent Press Information Bureau report said more than 590 million Jan Dhan accounts had been opened as of August 19, of which 56% were held by women and a substantial majority in rural and semi-urban areas. Deposits in these accounts have been exceeded ₹3.17 trillion.

The Jan Suraksha schemes – PMJJBY and PMSBY – extend the platform to affordable insurance. PMJJBY provides ₹2 million in whole life insurance for individuals aged 18-50 for an annual premium ₹436. PMSBY provides ₹2,000,000 coverage in case of accidental death or total disability a ₹1 lakh for partial disability for people aged 18-70 years ₹20 per year.

Atal Pension Yojana provides a guaranteed monthly pension of Rs ₹1,000 to ₹5,000 after attaining the age of 60 for workers in the unorganized sector who join between the ages of 18 and 40 years.

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Loan schemes include the Pradhan Mantri Mudra Yojana, which provides unsecured loans up to ₹20 lakh for micro and small enterprises and Stand-Up India which provides loans of Rs ₹10 million up to ₹1 crore to SC/ST and women entrepreneurs.

Lohiya also urged banks to engage in the upcoming saturation financial inclusion campaign scheduled from October 21 to December 31 and pay more attention to the marginalized sections and their banking needs.

Together, these initiatives are anchored under JAM – Jan Dhan, Aadhaar and mobile – which the government is using to expand access to banking, insurance, pensions and credit.