Jan Dhan: Desi Problem, Videshi Terms

RBI must act instead of simply issuing warnings about mutliple accounts opened under the PM’s pet project


The finance ministry has set stiff targets for nationalised banks to open new accounts under the Jan Dhan Yojana. But RBI governor, Dr Raghuram Rajan, has warned banks to be careful since people may be tempted to open multiple accounts lured by the prospect of a Rs1 lakh insurance cover and Rs5,000 overdraft.


The central bank says that multiple identification options acceptable under the know your customer (KYC) norms make this a possibility. Senior RBI officials have also been warning banks about ‘smurfing’ and ‘money muling’. This is American jargon to describe different money-laundering techniques.


Smurfing means splitting deposits into smaller sums to avoid being detected by regulatory systems. Money muling refers to laundering money through another person’s account (that account being the money mule). But weren’t these, and many other dubious, practices exposed by the Cobrapost’s sting operation? RBI then did a perfunctory investigation that ended in a small slap on the wrist to a few banks and a few officials losing their jobs. Dr Rajan has correctly warned banks to avoid duplication of accounts to meet Jan Dhan targets. He probably needs to pay attention to specific examples of aggressive tactics amounting to mis-selling. For instance, HDFC Bank has been spamming mailboxes using third-party databases (Avrial Technologies), with a mailer which says, “There is no minimum credit score requirement for availing its personal loans.”


It further claims ‘personal loan eligibility in one minute’ even when copious income and identification documents are required. The Bank used similar gimmicks by offering a 20% discount on e-Bay India for purchases in July but failed to meet its commitment when the response was significantly higher than its budget. Several years ago, RBI had treated such a gimmick by Citibank (free air tickets on a designated amount of credit card purchase) as a class action and forced it to pay up. Hasn’t RBI noticed this mischief or does it absolve itself by issuing a consumer charter and general warnings to people?

10 years ago
Jan dhan - dhan dhana dhan BIGEST JANDHAN GATE
10 years ago
Most of terms except Hawala have American origins
Deepak Mahulkar
10 years ago
The idea is very good to aviod proliferation of schemes like chit funds, ponzy schemes which loot hapless poor people. The governement is not expected to lauch schemes benificial to people as well as keep loop holes in such schemes also. it is for the implementing body to ensure that it is not being misused otherwise no good schemes will ever be implemented for the fear of its abuse.
10 years ago
I am told that already there are agents which are "selling" these accounts for multiple banks and charging a fee from the poor people promising that they will get an amount of INR 5000 for every account after a year.

This scheme would also result in nothing but a deadly scam for the banking industry if the finance ministry is forced to direct PSU banks to disburse the amount to every account holder. The entire scheme smacks of congress/UPA policies of appeasement and grant.

There is no electricity, no roads in many of the areas. The government should focus its energy on providing better health, education and infrastructure to these villages. Poor people would find a way to earn and borrow money if their basic requirements are fulfilled.
Dayananda Kamath k
10 years ago
this scheme has reduced bjp to upa3. for their failure to punish the guilty they are bringing out new schemes so that catching the culprit will be difficult or make everybody culprit so that nobody will point finger at other..
Ramesh B Mhadlekar
10 years ago
Will they Act is a million dollar question?
10 years ago
Entirely agree. The motive of NaMo behind the scheme is commendable and actually should have been done much earlier (somewhere between the sixty years). Without Bank Accounts only a small amount of the funds reached the actual Beneficiary and lot got filtered to various officials. However, the Bureaucrats and the officers under them will try newer ways of filling their pockets. As CENTRAL BANK, RBI should be on the alert to randomely audit these transactions. If they create a set up with telephone numbers where people can inform RBI, under todays atmosphere lot of people will come forward to report the irregularities.
10 years ago
A penalty for duplicate accounts could be "No Benefits" for the perpetrators.
10 years ago
Rajan is right and his dought is near reality.Those are illiterate having no bank account as P.M. announced sceam within few days crores of account registration by bankers.It smelling some jandhan Gate which will bigger than coal Gate so before giving any benefit scrutinize all account with there photo id. Address with. B responsible none currpt officer's which is very difficult. In short it will be a JANDHAN GATE
Anil Agashe
10 years ago
Duplicate accounts are surely opened in large numbers especially in cities. The amount collected is also very large 1500 crs? RBI must find a way to eliminate duplicate accounts before benefits start flowing. This scheme looks almost as if it has come from NAC!
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