Govt asks PSU banks to focus on opening Jan Dhan accounts | business-news | Hindustan Times
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Govt asks PSU banks to focus on opening Jan Dhan accounts

business Updated: Nov 29, 2016 10:38 IST
Mahua Venkatesh
Jan Dhan bank accounts

People queue up outside an ATM of Punjab National Bank in Gurgaon on Monday.(Parveen Kumar/Hindustan Times)

The government has directed all public sector banks to once again focus on opening new zero-balance Jan Dhan accounts for daily wage earners and those engaged with the small micro and medium enterprises.

Sources said just about a million bank accounts have been opened this month only, after the government announced its demonetisation drive on November 8.

“Public sector banks have been once again asked to focus on opening bank accounts..this has to be taken up in mission mode to ensure that most payments to daily wage earners are included in the formal banking segment,” a senior public sector official, who refused to be identified, told HT.

The number of Jan Dhan bank accounts in August stood at over 230 million, while in November it surged to 256 million.

The withdrawal of high-denomination currency notes of R500 and R1,000 on November 8 has led to the shrinking of the cash economy. The Centre has underlined the need to adopt electronic payment modes or cheques to pay wages.

Read more: Deposits in Jan Dhan accounts soar by over Rs 27,000 crore post demonetisation

“The government wants to move to payments done through electronic transaction or cheques. So there is a need to open more bank accounts. we want to reduce the usage of cash circulation,” said a senior government official, who did not wish to be identified.

While banks will undertake the exercise of opening more bank accounts, existing ones have come under the scanner of the income tax department.

The total balance in Jan Dhan accounts stood at R45,636.61 crore before the demonetisation drive kicked off. However, after the announcement, thousands of these bank accounts have been flushed with funds. Sources in the tax department have said that a large number of these accounts were being scrutinised.