Raghuram Rajan softens stance on Jan Dhan, says its a welcome scheme

Softening his stance on the Pradhan Mantri Jan Dhan Yojana, RBI Governor Raghuram Rajan today said he is not worried about the quality of KYC for opening new accounts and welcomed the financial inclusion scheme. "We welcome the Jan Dhan Yojana, it is part of RBI's plan to get universal access," he told a press conference called for announcing bi-monthly monetary policy. "I am not as worried about the quality of KYC for small accounts. In fact, we have essentially allowed for KYC that can be upgraded over time and in fact we have been more liberal on KYC," Rajan added.

The RBI governor had earlier cautioned the banks on the risks involved in just hunting for numbers, asking them not to compromise on core objectives of the programme. "When we roll out the scheme, we have to make sure it does not go off the track. The target is universality, not just speed and numbers," Rajan had said while addressing bankers a fortnight ago. However, today Rajan said he wanted a proper inclusion of unbanked households into the banking system.

"What I am more concerned about is that we actually achieve proper inclusion by bringing in households that were not reached in past... We are working with the government to try and make this dream a possibility," Rajan said. Jan Dhan Yojana was launched with great fanfare by Prime Minister Narendra Modi in August to bring 7.5 crore more families into the banking network by January 26, 2015. So far, over 5.1 crore accounts have been opened and Rs 3,600 crore deposited in banks.