Private Banks Need To Actively Engage In Financial Inclusion Schemes: Vivek Joshi

Financial Services Secretary, Joshi, said the public sector banks have worked to take forward the financial inclusion efforts and have undertaken a lot of measures to help popularise such schemes.

Joshi noted that financial inclusion doesn’t only refer to opening bank accounts, but also includes providing insurance and pension coverage to customers. 

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Financial Services Secretary, Vivek Joshi, said on Tuesday that private-sector banks show less participation in the government’s financial inclusion initiatives and urged them to boost their efforts to make such measures popular. 

Addressing the 20th Global Inclusive Finance Summit, Joshi called on banks and financial institutions to focus on three areas, namely getting KYC done for inoperative accounts, nomination for bank accounts, and boosting cyber security. The official further said that currently 92 per cent of adults in the country possess at least one bank account, and about 3 crore Jan Dhan accounts are added every year, reported PTI.

“We are not far from a situation where all the adults in the country will be covered with at least one basic bank account,” Joshi noted. He stated that in the last nine years since PM Jan Dhan Yojana (PMJDY) was launched, 51 crore bank accounts were opened in the period. 

The official stressed that the public sector banks have worked to take forward the financial inclusion efforts and have undertaken a lot of measures to help popularise such schemes. Joshi stated, “The participation of mainstream private sector banks, with the exception of IDFC First Bank, is lacking and there is a lot to catch up by private sector banks with their public sector counterparts in this aspect.”

The secretary said that private sector banks have boosted their credit disbursal under the Mudra scheme, under which loans are provided to micro businesses, while, ‘in other financial inclusion schemes, their participation is lacking. I would request the private sector banks to increase participation in PMJDY and Jan Suraksha schemes in order to realise the ambitious goals which the government has set for itself’. 

Joshi noted that financial inclusion doesn’t only refer to opening bank accounts, but also includes providing insurance and pension coverage to customers. Notably, major government insurance schemes include Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), and Atal Pension Yojana (APY). Other financial inclusion schemes include the Mudra Yojana and the StandUp India Scheme.

The official highlighted that currently, 18 per cent of the accounts under PMJDY are inoperative and banks need to work on getting KYC from account holders. Further, customers need to be pushed to name nominations for their accounts. Another priority area for banks to work on is cyber security and an increase in awareness would help build resistance to cyber frauds, he added.