Government ropes in KPMG to assess progress of Jan Dhan Yojana

KOLKATA: The Centre has hired global consultant KPMG to evaluate the progress of Jan Dhan Yojana, which was launched by Prime Minister Narendra Modi two months ago and targets opening of 7.5 crore savings accounts by January 26 next year in one of the biggest financial inclusion drives.

This is perhaps for the first time that the government has mandated a private company to evaluate a state-sponsored scheme, two people familiar with the development said.

Although banks have opened about five crore new accounts since the launch of the scheme on August 28, critics have raised doubts over this claim saying a sizeable chunk of the new accounts are duplicates as banks enrolled people already having bank accounts in a rush to please the political bosses.

The banks opened 1.5 crore accounts on the first day itself through 77,852 special camps held across the country .

"Doing evaluation by a third party is a very good initiative. We need to do a reality check on where we stand," said HK Pradhan, professor of finance and economics at XLRI Jamshedpur. "The government has attached freebies with the scheme. It is important to ensure that the money is not misused and benefits the poor at the end of the day."

The consultancy may conduct audits at all banks and suggest measures to ensure that the scheme gets a desired result. "We cannot comment on the specifics of any client engagement due to confidentiality reasons," a KPMG spokesperson said in response to an email sent by ET.

The scheme is aimed at making financial services available to every household instead of a village-based approach under the previous Manmohan Singh-led United Progressive Alliance government.

New account holders under the scheme will get Rs 1 lakh accidental insurance cover for free once Aadhaar number is linked to these accounts.They will also get another Rs 30,000 life insurance cover if accounts are opened before January 26. Banks may also offer them `. 5,000 overdraft facility if they are satisfied with borrowers' repayment capacity and transaction history .Although bank chiefs have agreed to the challenge thrown by the government, branch level managers are struggling to reach out to the financially excluded population in a country which is dotted with hinterlands without power and road connectivity

Earlier, in 2011, Indian Bank-led state level bankers' committee in Puducherry had claimed to have achieved 100 per cent financial inclusion but later it was found that the claim was far from reality going by the 2011 census data. In a similar incidence, Hooghly district of West Bengal was declared 100 per cent financially included, but a Jadavpur University study later found out that not all people in the district have bank accounts.

"We are dealing with large numbers.So, any claim needs to be supported by proper surveys and ground reality checks," said a senior bank official.

Banks were initially relying on district level data based on 2011 census for opening accounts under Jan Dhan Yojana.Now they have been asked to do a wardwise survey for achieving a better result. According to minority affairs minister Najma Heptulla, about 42 per cent or 10 crore households out of 24.64 crore don't have access to banking facilities. About 45 per cent of 16.76 crore rural households and 33 per cent of 7.88 crore urban households don't have bank accounts.