Indian Cooperative Banks to join the PMJDY cluster

            Buoyed by the success of PMJDY, a number of cooperative banks have sought clarification from Reserve Bank of India, as to whether the cooperative banks can open PMJDY Accounts.

            Dr.Alok Pande Director in Department of Financial Services, has issued a circular stating the minimum requirements cooperative banks should have to open PMJDY Accounts.

            As per the circular, Cooperative Banks (Urban/Rural) which are on CBS (Core Banking Solution) and are having arrangement with NPCI for issuance of RuPay Debit Cards are eligible to open accounts under PMJDY.

            This is one more step towards 100% banking coverage to all Indian households by 26^th January, 2015.   

As on date 200+ cooperative and gramin banks can issue RuPay Debit Cards. The banks are spread over all over India.  

In one of the biggest initiatives towards institution capacity building, NABARD is facilitating the process of bringing the Co-operative Sector onto Core Banking Solution (CBS) platform.

A total of 201 State and Central Co-operative Banks with 6,940 branches from 16 states & 03 UTs of the country, viz. Punjab, Haryana, Gujarat, Maharashtra, UP, Chhattisgarh, MP, Bihar, Karnataka, Tamil Nadu, Kerala, Uttarakhand, Sikkim, Himachal Pradesh, Jammu & Kashmir, Arunachal Pradesh, Chandigarh, Puducherry and Andaman & Nicobar have joined “NABARD initiated Project for CBS in Co-operatives”.

Two vendors, viz. TCS and Wipro, are implementing the ambitious project across the country.

Of the 201 banks with 6 ,940 branches under NABARD Project, 200 banks and 6,939 branches are fully on CBS as on 31st August 2014. This includes 114 new branches which were directly opened on CBS platform.

PMJDY RuPay Cards – The delivery race has begun

            As per reports appearing in the media, over the last couple of weeks, 1.5crs – 4 crs  banks accounts have been opened under PMJDY scheme in all bank branches in India.

            As the Accidental Insurance of INR 1lac is dependent on usage of RuPay Cards, the account holders are eagerly waiting to receive the RuPay card in their hands.

            The stupendous success of PMJDY in a short time has raised the delivery bar for NPCI as well as the respective Banks.

            To shorten the TAT for delivery of PMJDY RuPay Cards and to ensure that quality of RuPay Cards /  Holograms is maintained throughout the program, NPCI has announced a common RFQ (Request for Quote) covering the major 7 aspects of PMJDY program.

            The chief objective of this common RFP is to enable individual banks to place orders with the chosen vendors by avoiding the tendering process.

            Through this common RFQ, NPCI shall select all such empanelled vendors for supplying Personalised RuPay Debit Cards under uniform card design as prescribed under Pradhan Mantri Jan Dhan Yojna (PMJDY)

It is expected that over 50 million RuPay cards would need to be provided by Banks to the first time account holders under the program. Yes, at present the exact number of required cards is an unknown factor.

This poses unique challenges to the vendors, as they have to bid only on minimal data.  

            

PMJDY masterstroke to add 3.49 Crore Accounts – What an Idea Sirji!!

            The (Mahatma Gandhi National Rural Employment Guarantee Act ) NREGA Act 2005 provides enhancement of livelihood security, giving 100 days of guaranteed wage employment in every financial year to every household, whose adult members volunteer demanded unskilled manual work.

Panchayats at districts, intermediate and village levels will be the principal authorities for planning and implementation of the scheme.

MNREGA was set up on Feb 2, 2006 from district Anantapur in the state of Andhra Pradesh, India and originally protected 200 real "poorest" zones of the nation.

One of the major complaints of the workers under the NREGA Act 2005 was the consistent delay of wages.

Over the years the process got streamlined with migration from Cash based disbursements to Electronic based payments.

The absence of a wide-spread banking network was seen as a major hurdle in the roll-out of the electronic based payment system.

The Indian Posts with its comprehensive network  prompted the Rural Ministry to advise the workers to open savings accounts in Post Offices.

Now, with PMJDY generating wide spread interested amongst the rural populace, the Ministry of Rural Affairs is contemplating of nudging the workers to open PMJDY accounts in the Banks.

On the accounts being opened under PMJDY the wages mode would be modified from Post Office/Cooperative Bank to PMJDY Bank accounts.

The immediate impact would be an addition of 4.41 crores bank accounts if the residuary NREGA workers opt for PMJDY Bank Accounts.

What an Idea!

The conversion of accounts from Post Office to Banks under PMJDY mode is part of the MGNREGA PRC Agenda scheduled on 18th - 19th Sept 14

PMJDY – Which is better? – An Audit or An ePortal

            Still in its early days, PMJDY is already subject to an Audit. No, it is not audit of the PMJDY scheme, but the validation of basic bank accounts opened by various Indian Banks under PMJDY.

             The Indian Finance Ministry has given the mandate to KPMG to validate the number of basic banks claimed to have been opened by banks under PMJDY.

            The KPMG certification is an important tool for the NaMo ministry move to seek an entry into the Guinness Book of World Records, for the maximum number of bank accounts on a single day.

            The other spinoff the KPMG validation will be the comfort to the finance ministry on the claimed number of basic bank accounts opened by the banks.

            10 reasons why an ePortal should be the preferred monitoring tool rather than an Audit: -

01) Ease of data transfer from the respective banks CBS to the ePortal

02)Banks have been advised to open the PMJDY Bank Accounts under the Basic Banking Account product, which is uniform across all banks.

03)Reports of various types i.e District level, State level etc can easily be customized

04)After the initial set-up, no need of human intervention.

05)Real time availability of data

06)Reduces dependence on banks to submit the data manually

07)Cost effective, as no Maker-Checker will be required

08)Turnover in the account can be monitored

09)Steps can be taken to increase the stickiness of the accounts to the account holders

10) The ePortal can go live in 3 weeks i.e by Mahatma Gandhi’s Birthday

            

PMJDY - Overdraft of INR 5000. 5 reasons for success

    

The contours of Prime Minister Jan Dhan Yojana (PMJDY) Overdraft of INR 5000/- will be unveiled in the next couple of weeks.

As per the present thinking, the OD can be availed by account holders who have seeded their Aadhaar Number in the Banks account database and have satisfactory operations for 6 months.

Similar guidelines as applicable instant credit of outstation cheques may apply to OD requests too.

The guidelines for quantifying satisfactory operations are not laid down in black and white, but based on banker’s experience.

The following points are considered while assessing a customer account for satisfactory operations: -

a)    No cheque bounce

b)   No decline of eTransaction due to financial reasons

c)    Average balance

d)   Credits in the account at regular intervals.

There are many apprehensions that the due to OD facility a large number of accounts will slip into NPA mode and banking industry will face huge losses.

            Assuming out of the 7.5crs accounts, 20% (1,50,00,000) of accounts will be eligible to avail OD facility, funds to the tune of INR 7,500 crores would be required.

5 reasons why the NPA level will be LOW in the OD Accounts

01)  The accounts have already cleared the first step of credit appraisal i.e the satisfactory operations test.

02)Inflow of subsidy credits at regular intervals.

03)Inflow of other Government payouts

04)The Indian Jugaad ability to ensure credits and debits are always equal

05)The poor are always trustworthy, Yes, the poor always trustworthy

PMJDY – The INR 1 Lac Insurance Program

            As on date, the following is the information available on the Prime Minister Jan Dhan Yojana (PMJDY) –  INR 1 Lac Insurance Program: -

01) The insurance coverage of INR 1 lac is for accidental death or permanent disablement for eligible RuPay Debit card holders.  

02)The RuPay card issuing agency is National Payments Corporation of India (NPCI)

03)NPCI has entered into an agreement with HDFC ERGO general insurance company (HDFC Ergo) to provide an insurance program to all RuPay card holders.RuPay Card Insurance Program

04)The same agreement would continue to RuPay card holders under the PMJDY program too.

05)The insurance cover is for cardholders between 18-65 years of age

06)Eligible RuPay Debit cards holders means who have performed at least one financial or non-financial transaction  at any one channel i.e ATM/MicroATM/POS/eCom in the last 45 days prior to the incident. For eg for accident occurred on September 1, 2014, transaction by RuPay card must have been done or after July 15,2014

07)Negotiations are on with HDFC ERGO General Insurance to increase the 45 day limit to 90 days.

08)The approved claim payment will be done through NEFT to the card holder beneficiary along with a covering letter. 

Participate in India’s Bank Account (PMJDY) Challenge - Target 5,00,000

             Today, on the auspicious launch of Prime Minister Jan Dhan Yojana PMJDY, 1.5 crores +  Bank accounts were opened

Major functions were held at 76 locations all over India, with a host of minor functions contributing their bit to the account pool.

            No doubt, the major responsibility to open the bank accounts under PMJDY would be bank officers.

            However, we other countrymen too have a social responsibility in this grand Financial Inclusion plan.

            You might be wondering as to how you can participate in this noble program.

            It is very simple:-

Just encourage one of your fellow countrymen(women), who is not holding a Bank account, to open a Bank account under PMJDY.

            The process flow is as under: -

01) Identify an acquaintance who is not having a bank account

02)Inform him/her of this scheme

03)Accompany him/her to the nearest bank branch and assist him/her in the account opening process

04)Once the account is opened, take a selfie along with the new account holder and post it on this Facebook page.

05)Challenge 3 of your friends to do the same. The challenge can be announced in your social media network

06)In case, your friends are unwilling to accept the challenge, ask them to contribute INR 101 to Prime Minister's National Relief Fund (PMNRF) online.

 Users can donate to the fund by using the net banking facility. Details such as name, address, city, country, email id, mobile number, amount details, etc. are required to initiate the donation process. PMNRF accepts voluntary contributions from individuals, organisations, trusts, companies, institutions, etc.

I will contribute INR501 to PMNRF for the first selfie. Contributions of INR 101 will be made for the next 99 selfies.

Can we target 5,00,000 accounts by 02/10/2014?

DISCLAIMER: The above is my personal view and my employers may not agree with my views.