The finance ministry and the Indian Banks Association (IBA) have finalised that public sector banks can lend four times the average amount deposited by beneficiaries of the Pradhan Mantri Jan Dhan Yojana in their accounts. However, the loan cannot exceed Rs 5,000.
Under the scheme, state-run banks have opened 115 million no-frill accounts in five months. And all accounts holders under the scheme will be eligible for loans from February 28.
“We have finalised the formula, and banks will start giving credit to these new customers with operational accounts whenever they require, from the end of next month after they complete six months. We are monitoring these accounts,” TM Bhasin, chairman, IBA, told Hindustan Times.
The banks are apparently closely monitoring the accounts which are operational to assess the financial behaviour of beneficiaries, and also to keep a check on their rising non-performing assets (NPAs).
NPAs in public sector banks have risen to 4.72% of their loan portfolio or Rs 2,16,729 crore as on March 2014. It was 3.84% in the corresponding period in 2013.
The government has directed the banks to complete the process of linking these accounts with Aadhaar number by the end of the current fiscal year so that all subsidies, including payments for Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), can be directly transferred into these accounts by April 1.
About 50% of the accounts are yet to be seeded with the unique identification system.
“The immediate focus would be to seed all the savings accounts under the scheme with Aadhar number, and this exercise will be taken up on war footing,” said Bhasin.
Of the total new account holders, women constitute 60.63%. Nearly 60% of these accounts have been opened in rural areas.
Finance minister Arun Jaitley had earlier said 28% of the accounts were operational.