Jan Dhan accounts are chargeable after few free transactions

Harsh Roongta | Fri, 7 Jul 2017-07:25am , DNA

Ramsharan is my father’s man Friday, assistant and servant all rolled into one. Last week, he came to me and asked me to start paying him his salary in cash again. During demonetization last year, I had got him to open a savings bank account with the biggest bank in India so that I could transfer his salary electronically. He was also able to use the bank account to transfer money to his sister’s bank account in his native village in distant Madhubani, Bihar at a lower cost than he paid earlier. He also learnt to withdraw cash from the ATM and was very happy with his new bank account.

So, I was rather surprised about this request for payment of salary in cash again. I soon found out why. The bank had charged him a penalty of Rs 115/- (a big sum for a man of his means) for not maintaining the minimum balance in his account. When he had gone to the bank to find out he was informed that this amount was going to be charged monthly if he did not maintain a minimum balance of Rs 5,000 in his account. This amount was way beyond Ramsharans’ means as he could not afford a monthly charge of Rs. 115. Effectively he was paying a tax to the bank to keep his (admittedly) small amount with them rather than being given interest by the bank. I am involved in the protests against unjust and unfair bank charges but here was a story close to home.

The banks (and the government’s) defence on bank charges was that it did not affect the poor as those charges were not levied on Jan Dhan accounts. Here is what followed when I asked Ramsharan to open a Jan Dhan account with the same bank in which he had a regular bank account already with proper KYC procedures.

Ramsharan went to the bank but returned empty handed as he was told that the bank has stopped accepting applications for new Jan Dhan Accounts. I sent my office assistant along with Ramsharan and only then the bank directed them to an outsourced agency to which they claimed they had outsourced the work to open fresh Jan Dhan accounts. No proper address of the outsourced agency was provided by the bank and my office assistant and Ramsharan roamed around the area without being able to locate the supposed “outsourced agency”.

This time I decide to become involved and went to the bank myself. I knew the concerned bank officer who I thought was a pretty friendly lady considering the amount of work pressure she was under. She frankly advised me against opening a Jan Dhan account as there would be charges even in those accounts after the first three or four free transactions every month. Expressing helplessness at the bank charges diktat that had come from the head office she said I would be better off getting Ramsharan to open a regular saving account with another public-sector bank that did not have such stiff bank charges and minimum balance requirements.

When I insisted on opening a Jan Dhan account with them, she again gave me the same vague address of the outsourced agency claiming that was all the address that she had. This time I myself went to the same place and managed to find out that the agency had closed down long ago. In other words, the bank has clearly refused to open Jan Dhan accounts.

If this is an example the largest bank in the country has no interest in opening Jan Dhan accounts and in fact it is actively discouraging the opening of such accounts.

As for Ramsharan I have asked him to try and open a Jan Dhan account in another public-sector bank but he has not succeeded so far. Meanwhile I have no choice but to start paying Ramsharan in cash again. So much for financial inclusion and the digital revolution.

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