09-11-2020 | 15:27 PM
SBI Ecowrap Report 2020
Context
State Bank of India has finally published "Ecowrap report 2020". Ecowrap report of SBI highlights that the COVID-19 pandemic has led to 60 per cent increase in opening up of new Jan Dhan accounts.
Highlights
The report highlights that the usage of the Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts has increased since the pandemic.
It has especially increased in the regions that are more prone to theft.
Empirical research has shown that the PMJDY accounts act as the primary source for labour remittances.
There is evidence of PMJDY accounts having some impact on crime:
States such as Uttar Pradesh, Maharashtra and Haryana witnessed a decline in the usage of PMJDY accounts which has a positive impact on theft.
States such as West Bengal, Tamil Nadu, Kerala, Gujarat and Karnataka have also seen a favourable impact.
The Government strives to put more money into such accounts as a kind of third fiscal stimulus, possibly through enlarging the National Rural Employment Guarantee Act (NREGA) scheme or through a scheme for the urban poor.
The report observed that this is a matter of satisfaction that the use of PMJDY accounts in the current unprecedented times has helped maintain social harmony.
SBI's data shows that there has been substantial decline in remittances due to the lockdown and reached the lowest level in April. However, it increased in June and July and crossed the pre-Covid-19 stage in September, as witnessed in February.
Pradhan Mantri Jan Dhan Yojana (PMJDY)
In August 2014, the PMJDY scheme was launched under the National Mission for Financial Inclusion.
It provides universal access to banking facilities that provides – one basic banking account for every adult, access to credit, financial literacy, insurance and pension.
Use of PMJDY is also causing changes in individual behaviour across all states.
According to the latest data total number of PMJDY accounts stands at 41.05 crore as of October 14, 2020.
The objective of the scheme is to ensure access of financial products & services at an affordable cost and use of technology at lower cost and widen reach.
The scheme is Based upon the following 6 pillars:
Universal access to banking services
Basic savings bank accounts with overdraft facility (OD) of Rs. 10,000/- to every household.
Financial Literacy Program
Creation of Credit Guarantee
Insurance
Pension scheme for Unorganized sector.
Basic tenets of the scheme includes:
Banking the unbanked by opening a basic savings bank deposit (BSBD) account with minimal paperwork, relaxed KYC, e-KYC, account opening in camp mode, zero balance & zero charges.
Securing the unsecured by issuance of Indigenous Debit cards for cash withdrawals & payments at merchant locations, with free accident insurance coverage of Rs. 2 lakhs.
Funding the unfunded
