Jan Dhan accounts not going as planned

March 15, 2016 Hot from the Oven Valli Sarvani No comments

The government wants to use Aadhaar card as a way to better target its Direct Benefit Transfer scheme for subsidy payments. However, so far, almost 40 percent of people who obtained the Aadhar numbers are saying that it did not help them.

Banking correspondents in rural areas said that accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) using Aadhaar have authentication issues and led to failed transactions.

It’s not just them, according to a survey report by the international financial inclusion consultancy MicroSave, even the BMs (Bank Mitras) are also preferring to open accounts using the e-KYC because of its simplicity in the opening procedures. They found that PMJDY accounts which are opened through e-KYC using Aadhaar numbers have regular authentication issues during transactions. It was reported that the biometric signature of these customers is getting rejected quite often. This led to many transactions being denied, says the report.

Such reports are quite impactful with the recent passage of Aadhar Bill in the Lok Sabha which will provide legal sanctity to the Aadhar number. The government pushed the Aadhar bill as a money bill in Parliament by arguing that they want to use Aadhar as a means to have more efficient Direct Benefit Transfer scheme for subsidy payments.

A survey conducted in December 2015 showed that only 62 percent people with Aadhar numbers found that it helped make financial transactions easier. This means that 40 per cent of the Aadhaar users did not find it helpful.

Arun Jaitley, the Finance Minister said that targeting the LPG subsidy through Aadhaar resulted in savings of over Rs.15, 000 crore by the Center. Out of those who said that the Aadhar has helped them in this, only a fifth of them said that using Aadhar made processing of receiving government subsidies easier.

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