Public sector banks to hardsell Jan Dhan overdraft benefit | business | Hindustan Times
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Public sector banks to hardsell Jan Dhan overdraft benefit

business Updated: Apr 26, 2015 23:25 IST
Mahua Venkatesh
Mahua Venkatesh
Hindustan Times
PM's Jan Dhan Yojana

The government has asked public sector banks to proactively inform account holders under the PM's Jan Dhan Yojana about their eligibility to take an overdraft.

Account holders become eligible for a Rs 5,000-overdraft after six months of opening the account, if its operation has been 'satisfactory' — that is, there is circulation of money.

Under the eligibility criteria, about 28,000 account holders have become eligible to get overdrafts, Hasmukh Adhia, secretary, financial services told HT. But only 1,300 have so far availed the benefit.

"We are closely monitoring the situation and banks are extending the benefits to as many account holders possible," Adhia said.

The finance ministry is looking at options to ease up lending to the rural and underprivileged section, especially in view of the recent forecast of a sub-normal monsoon by the met department. Incidents of farmers' suicide have been spiralling ever since.

Bankers said that awareness of the facilities of this scheme also needs to be enhanced. "There needs to be more awareness among the account holders on the benefits so that people can take the benefits," a senior bank executive added.

Most account holders do

not know about the extent of the benefits available to them, such as insurance and overdraft, he said.

TM Bhasin, chairman, Indian Banks' Association, said all banks have been instructed to carry on the normal lending pattern to farmers, even if they are unable to repay their dues for the Rabi crops. The agriculture lending target for 2015-16 is Rs 8.5 lakh crore.

Meanwhile, Adhia said the contours of the Mudra Bank and its lending pattern would also be finalised which would boost small borrowers.

"We are already working on that (the final touches to the functioning of the refinancing agency) and that too should come along, which will be a big boon to the small borrowers," he said.