Page 38 - Banking Finance MAY 2017

ARTICLE

which may not be much beneficial to economical back-
ward classes.
Y Overdraft facility is not readily available to everyone.
There are conditions for fixing overdraft limit for an in-
dividual like customer induced transactions in the ac-
count, DBT / MGNREGA credits within a period of six
months.
Y For operating profitably, banks need that accounts
should maintain a minimum balance. Otherwise these
zero balance accounts will be a burden to Banks with
huge operational costs and ultimately it may affect the
customer service to others.
Y Number of transactions per account through BCA has
been very low. With little commission (around 2%) given
Y In the present set-up, there are number of regulatory
to BCs based on the transactions done by the public,
authorities for financial inclusion (RBI, NABARD, SEBI,
many BC Agents will be leaving their jobs due to mea-
SIDBI and MUDRA bank). There should be a single au-
ger salary / income. (According to a survey around 47%
thority to ensure operational and administrative guide-
of BC Agents are leaving their jobs).
lines for the PMJDY scheme.
Y There is a need to study the money lenders continuance Though the concept and objects of the scheme to include the
despite efforts by Government to curb their operations excluded is a great thought, the present status needs extra
in the financial market. Operations of Money lenders incessant monitoring for its success. There are strengths and
continue to account for about 30% of finance business. weaknesses in PMJDY. It is time to retrospect the real benefi-
Y Even the rate of interest charged by Banks in India is cial progress made in the scheme. So far, there is success in
low, reasonable and market oriented, people prefer to creation of infrastructure in mainstream area. The next phase
go to money lenders due to ease of doing business. should be on extending real benefits to the needy people and
more focus on small villages and areas where the progress is
Y The condition for accidental insurance eligibility is linked
not much noticed. It is an opportunity to India to set an ex-
with usage of RuPay debit card within 90 days of its is- ample to the world as how to execute a simple idea into a
suance which is not known to many illiterate custom-
grand triumph to transform lives of poor.
ers.
Y Coverage of insurance to card holders is available from Data source:
the age of 18 to 59 years only with valid Aadhar card Ministry of Finance, Government of India T

Nabard against debt waivers

After Reserve Bank of India, the National Bank for Agriculture and Rural Development (Nabard) spoke against "omni-
bus waivers" and described farm loan waivers as a "moral hazard". "Debt waivers cre-
ate a moral hazard from a credit repayment perspective and we cannot have omnibus
waivers," Nabard chairman Harsh Kumar Bhanwala said a week after UP government
announced a Rs 36,000-crore farm loan waiver package. Similar demands have already
been raised in many other states including Maharashtra.
Bhanwala said every time a debt waiver is announced, it is taxpayers' money which is
used to help bail out the farmers. Nabard has reported a 4.24 per cent rise in its net
profit for 2016-17 at Rs 2,631 crore, and a 16.27 per cent rise in its outstanding loans
at Rs 3.08 lakh crore.

38 | 2017 | MAY | BANKING FINANCE

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