After achieving the target set for bank accounts for each household in the country, the Finance Ministry is now working to get the last mile delivery in place. As the Indicus blog post points out, tracking the usage of accounts and agent activity at a granular level will help pinpoint the challenges to overcome. Meanwhile, the Department of Financial Services (DFS) is working with MicroSave and the Bill & Melinda Gates Foundation for a regular survey to understand the coverage and quality of Bank Mitrs and to understand customers' experience with PMJDY. The results from the survey will go to fine tuning the mission programme over the year. The study, "Assessing the most ambitious public financial inclusion drive in history - An early dip-stick assessment of Bank Mitr's under Pradhan Mantri Jan Dhan Yojana", was conducted in November and December 2014 across 41 districts in 9 states. The results are not intended to reveal a national picture, but are to be taken as a dip-stick across the sample districts. While it was heartening to learn that 86% of PMJDY account holders reported that this was their first bank account, just 18 % had received their Rupay card. The DFS is working to push the coverage up on the disbursal of cards. Having done that, the next step would be to ensure a wider coverage of access points – either agents, ATMs, PoS terminals etc- where these cards can be used. The survey reported that 69% of Bank Mitrs were physically present at the stated location, 48% were transaction ready and 11% were untraceable. The Bank Mitrs who were not transaction ready cited several factors, including the recentness of their appointment, lack of a transaction device, technology issues (e.g. downtime) and dormancy (often due to inadequate remuneration). The ultimate aim of the PMJDY must be to increase usage of bank accounts and clearly a lot more must be achieved to fix the glitches at the customer end of the programme.
The Finance Ministry also came through with extremely positive news last month - the focus on the "JAM Trinity" – Jan Dhan, Aadhar and Mobile , as the Finance Minister stated in his Budget speech, "The JAM Trinity will allow us to transfer benefits in a leakage-proof, well-targetted and cashless manner." The details of benefits of digital transfers were spelt out in the Economic Survey that put out two new options for rolling out the programme – through mobile money and the India Post network. However, as Shweta Banerjee from CGAP noted in her recent brief, "From Cash to Digital Transfers in India: The Story So Far", experiences in India have found several barriers to efficient implementation of digital transfers: lack of awareness among recipients, closed-looped technology solutions that do not enable customers to use the account at any other time, for any other purpose other than to receive a benefit from a particular agent; high costs and lack of incentives for banks to deliver financial products. The study noted three key factors for successful transition to digital benefits transfers – enabling infrastructure including connectivity, clear business case for the banks and the agents and customer centricity in service delivery and grievance redressal. It will be a challenge to put all the pieces in place to make the channel viable this year.
Section I: Policy – the latest from India's policymakers
The Indicus Centre for Financial Inclusion was launched in 2011 to distil and disseminate information on accelerating the poor’s access to high-quality financial services. The Centre is supported by the Bill & Melinda Gates Foundation. http://www.indicus.net/icfi