2014InclusionPolicyReforms Must PerformUttar Pradesh

Samavesh Making Jan Dhan Meaningful

Thirty-five year old Gomati from Mangatpur in Pilibhit has opened a bank account under Jan Dhan, but she is skeptical about its use. “There is no money in it. I am confused. What will I do with it?” she said tersely when asked about her bank account. Gomati is not alone. Hundreds of women spoke in unison at the five-day financial literacy programme conducted by Skoch Group at Pilibhit, a picturesque Himalayan plateau rich with flora and fauna, but one of the economically backward regions in Uttar Pradesh.

 A comprehensive study of the scheme by Skoch Group revealed that almost half of the households in the district are still outside the banking net and even those who have managed to open an account have no idea about its use. And, this is not a stray incident as government data show that while PMJDY was an instant success in opening more than 100 million accounts in less than four months—60.2 million accounts were opened in rural areas—almost three-fourth or 74 million accounts had zero balance as on 26th December 2014.

While most banks are rejoicing in meeting stiff targets of opening Jan Dhan bank accounts set by the Prime Minister Narendra Modi in his pledge to end financial untouchability, a majority of poor households have neither deposited a single paisa nor has the central and state governments put in any funds from social entitlement schemes into these accounts. The reality is that most of the poor are clueless why these accounts are opened and what benefits will emanate out of these.

How will the poor know unless there is awareness and financial literacy programme carried out in the remote areas?

No wonder, a huge enthusiastic participation was seen when Skoch Group conducted Samavesh, a financial literacy programme, at Pilibhit situated at the Indo-Nepal border. Over 1,300 women from every nook and corner of Pilibhit participated in the programme held 25th-29th November 2014.

Women, young and old alike, travelled miles of weather-beaten narrow dusty roads in odd hours, huddled up at the training ground and thronged the classrooms to learn how bank accounts and financial awareness could help change their lives.

The impact of the training was a resounding success among the poor. Even those who heard about the bank accounts for the first time got convinced that it could address several of their problems and help them come out of the vicious cycle of poverty. For many, it was like a dream come true. Something which did not happen in the past six decades was now a reality—an opportunity to come out of a debt trap and abject poverty, a chance to be part of the mainstream financial sector and share the fruits of economic progress.

“I have taken loan from a moneylender in my village for buying a buffalo. Most of the earnings I make from buffalo, I give to the moneylender,” said Neelam Devi from Himmatnagar village. “I am told that had I taken the money from a bank, the interest would have been much lower,” she said.

Neelam Devi is representative of almost a third of rural households in India that are highly indebted. What’s alarming, the indebtedness among the rural poor is on the rise. NSSO data show 31 per cent of the households in the hinterland were indebted in 2012 as compared with 27 per cent in 2002 with the average debt rising more than four times in a decade from ₹7,539 per household in 2002 to ₹32,522 in 2012.

Chameli Devi from Khajuaha village has a similar problem but her real concern is the livelihood. “I have four kids. The only earning member is my husband. We barely manage three square meals a day. It is very difficult to save. If I also get a work, it will be good for my family,” she said.

A comprehensive study of the scheme by Skoch Group revealed that almost half of the households in the district are still outside the banking net and even those who have managed to open an account have no idea about its use. And, this is not a stray incident as government data show that while the Pradhan Mantri Jan Dhan Yojana (PMJDY) was an instant success in opening more than 100 million accounts in less than four months, almost three-fourth or 74 million accounts had zero balance as on 26th December 2014.

The problem of livelihood is all pervasive in India and one of the main reasons why many households cannot come out of the clutches of poverty. The situation has worsened in past few years. India’s labour force participation rate for women fell from just over 37 per cent in 2004-05 to 29 per cent in 2009-10. Out of 131 countries, according to data available with International Labour Organisation showed India ranks 11th from the bottom in female labour force participation.

Most of the unskilled women end up doing inferior jobs at marginal wages. Most of the women are in search of an opportunity to earn a livelihood. There are plenty of livelihood programmes run by central and state governments. But who will teach the illiterate rural women of the available opportunities and ways of capitalising them to ameliorate their living conditions?

Samavesh: A Prelude to Financial Inclusion

Financial literacy and awareness of livelihood schemes are perhaps the primary objectives to make any of the financial inclusion plans a success. Samavesh endorses this fact.

The training programme in Pilibhit was the third in the series after the success of the first two—one held in Uttarakhand in 2012 and the second in Gujarat in February 2014. The Group propounded its Model of Inclusive Growth way back in 2009 based on its learnings for over a decade through field visits, studies, impact assessments, round-table discussions and think-tank activities. The programme puts a high degree of emphasis on functional literacy and is made available to the people who need it the most. It makes a case for providing microfinance products to address the financial needs of those at the bottom of the pyramid.

“I have taken loan from a moneylender in my village for buying a buffalo. Most of the earnings I make from buffalo, I give to the moneylender,” said Neelam Devi from Himmatnagar village. She represents one of the rural households that are indebted. NSSO data show 31 per cent of the households in the hinterland was indebted in 2012 as compared with 27 per cent in 2002 with average debt rising more than four times in a decade.

The Pilibhit programme saw the highest number of participation—1,316 women participated in the structured financial literacy training that covered basics of banking, account opening, KYC, overdraft facility, insurance, Direct Benefit Transfer (DBT), SHG formation, micro-credit, and micro-investments among others. Livelihood linkages with focus on locally relevant vocations like mushroom cultivation, papad making, mehndi and bio-products were also highlighted.

Planning and conceptualisation for the Pilibhit Samavesh programme took nearly a dozen tiring field visits spanning six months. Initially, a Skoch team conducted a dipstick survey of Pilibhit district visiting the city as well as rural area extensively.

Professionals and trainers from several cities, including Delhi, Lucknow, Agra and Bareilly travelled to Pilibhit to create the financial awareness. This included 20 trainers, mostly banking and financial professionals and 15 resource persons from Skoch that organised the programme.

“We believe that there is an urgent need for financial literacy to achieve the goals of financial inclusion from demand side rather than supply side. Samavesh is an attempt to address this gap. It is heartening to note that financial literacy has now been made an integral part of Jan Dhan scheme,” said Sameer Kochhar, Chairman of Skoch Group.

Besides classroom training, street plays and other pedagogical innovations were used to get the message across. Each participant was given a participation certificate upon completion of training.


What Women learnt at Samevesh

1. Basics of banking
a. Account opening
b.  KYC
c. Savings, Fixed and Recurring Deposits

2. Jan Dhan Scheme
a. Jan Dhan Yojana
b. Key Benefits
c. KYC norms
d. Overdraft facility
e. Insurance (life and accident)
f. Pensions and Social Security
g. Direct Benefit Transfer

3. Livelihood Linkages
a. SHG formation and Bank Linkage
b. Micro-credit
c. Locally relevant vocations (mushroom cultivation, mehndi and bio-products

4. Micro-investments linked with markets like Gold ETFs


Master Trainers drawn from the National Stock Exchange (NSE), YES BANK and Canara Bank highlighted the importance of financial inclusion and livelihood linkages. All these institutions having little or no business stake in the district showed exemplary dedication. Local NGOs were roped in for livelihood related areas and a demonstration of these vocations was also set up during the training programme.

After the training, one of the participants said she now understands the importance of having a bank account, but her real concern is to get a loan for starting some sort of a livelihood. “I am told how micro-credit linked to the account can help in starting a small business,” said a participant.

They were shown the process of livelihood-linked works like papad making, making of bricks and sapling pots from cow dung among others.

A large number of villagers showed interests in getting involved in these activities, as it required very little investment. Trainers assured financial and technical help to participants in starting these livelihood activities.

Women Empowerment

According to the World Bank data, only 35 per cent Indians have account with a formal financial institution. In the case of women it is only 27 per cent. Although, the impact of the Jan Dhan scheme is not reflected in the World Bank data and the government data put it at a relatively higher level, there is no denying the fact that majority of the women don’t have access to formal financial system. They are most vulnerable and the worst affected. Financial dependence often leads to exploitation.

Samavesh is aimed to empower women in backward regions. Also, the impact of the financial awareness among women on the society and economy would be much more effective than the same exercise carried out on men. As the saying goes, “if you educate a boy, you educate a person, but if you educate a girl, you educate a family and benefit the entire community.” The same is true with the financial literacy and awareness.

The five-days of intensive exercise helped create remarkable financial awareness among the women. Over 1,300 women participated in the programme. However, the impact is not limited to them. The idea is to create a chain. Participants were selected from different parts of the district, mostly villages. A substantial participation was from panchayats, municipality and Self-Help Groups (SHGs). They were asked to create awareness among other people. Over 200 girls from colleges and schools were also given training. They were motivated to further create awareness in and outside their family.

Enthusiasm for a Better Future

The fact that India’s poor have not given up hope is reflected in the enthusiastic participation at the Samavesh programme, which far exceeded the expectations.

In some sessions, the number of participants was almost double the estimate. Chairs used to get filled up quickly in the morning and women who came slightly late scrambled for whatever little space they could see on the floor and even did not hesitate to stand at the back, at the gate and even outside the gate to get a glimpse of the training. 

Women from all the seven blocks—Lalaurikhera, Puranpur, Amaria, Marauri, Barkhera, Bilsanda and Bisalpur—as well as Pilibhit town participated actively in the programme.

Although most of them had little idea about bank accounts and financial products, they were seen engrossed during the training and asked sharp questions to the trainers.

Girls from schools and colleges participated in games and skits to help convey the message in an effective and entertaining way. Training and financial inclusion messages were imparted in local language through games, skits, films, lessons, group discussions and tests, keeping in mind the trainees’ abilities.    

“We have learnt a lot of things. Earlier, our thinking about insurance was very bad. We used to think that such people want us to meet with an accident and die. Now, I realise that insurance is very useful for us,” Rewati Devi, from Mudiya, Ratanpuri, said after participating in the training programme.

More than half of the women who participated in Samavesh complained of irregularities in the process of opening bank accounts. Banks were asking for money if they did not possess the requisite documents.

Alluding to the messages put forward through games and skits, she said it touched her heart. “When they (girls) were doing the games, my heart was filled. I thought they are just mocking my problems. But the good thing is that they showed us the solutions,” said Nand Rani, trying to suppress her tears of joy.

Misleading Facts on Jan Dhan

As per the data available with Bank of Baroda, the lead bank of Pilibhit, about 146,000 accounts were opened in the district till 26th November 2014. The scheme was formally launched on 28th August 2014 after Prime Minister Narendra Modi announced the scheme in his Independence Day address.

Although official data show that nearly 80 per cent of the households in the district have got an account, the reality at the ground is different. The actual figure is not even 50 per cent.

Even Union Minister for Women and Child Development Maneka Gandhi, who represents Pilibhit in the Lok Sabha, accepts that the figures provided by the lead bank are not correct.

“Whenever I come to Pilibhit, I go to 10-15 villages. The first question I ask is about the bank account. When I ask who all have got the account, some people raise their hands. But when I ask how many have not got it, three times more hands go up,” said Gandhi.

She said the actual number of households having bank accounts in Pilibhit is not more than 50 per cent.


Pilibhit: A Case Study

While inheriting a history that can be traced back to the Hindu epic of Mahabharata when it was ruled by  Mayurdhwaj or King Venu, a great devotee of lord Krishna and a loyal friend of Arjun, Pilibhit derives its name from a local village where people build yellow-coloured mud walls around their dwelling units to protect themselves from wild animals. Ruled by the Muslim rulers and then the Marathas, Pilibhit has its share in the Independence struggle with the hanging of 21 locals by the British in January 1909. Even after six decades of Independence, almost a half of Pilibhit’s population is yet to be liberated from the bondage of poverty.

Located at sub-Himalayan Plateau belt on the boundary of Nepal and the originating point of Gomti river, Pilibhit is among the backward districts of India. Almost 40 per cent of the population is illiterate and nearly half of the masses are below the poverty line. Connectivity to Pilibhit is very poor. Roads are in a dilapidated condition and the city is connected only with a meter-gauge train. In a list of 423 towns and cities in India, Pilibhit is ranked third from the bottom in terms of hygiene and sanitation, according to a government report. Financial awareness among the common people is very low.

In this backdrop, Skoch Group chose Pilibhit for the Samavesh programme as its motto is to reach out to the people who need it the most. SKOCH team organised the programme quite successfully despite several difficulties–be it traveling in three wheelers in the dark chilly night or working from early morning till late night without a break and proper food.

“This is what makes us different. We work at the grassroots and try to reach out to the people who need us the most,” said Skoch Group Chairman, Sameer Kochhar.

A team visited and identified women from the far-flung villages who were encouraged for participation. It was quite a challenge to convince the women to come out of their home as they are always engaged in some household work and often not allowed to step out of the house. Proving some of the preconceived notions wrong women turned up in unexpectedly large number and participated actively in the programme.

Pilibhit is perhaps the best example how the PM’s flagship programme is being rolled out to attain statistical inclusion rather than financial inclusion. At the time of the launch in August 2014, Modi Government had set a target to open 75 million Jan Dhan accounts by 26th January 2015. In November, the target was revised upward at 100 million going by the initial success.

As per the data available with the Finance Ministry, more than 100 million accounts were opened under Jan Dhan till 26th December 2014, out of which Public Sector Banks (PSBs) have opened 80.3 million accounts, Regional Rural Banks (RRBs) 17.8 million and private sector banks
2.7 million.

Out of the 100 million Jan Dhan accounts opened, 74 million accounts have zero balance. This means there is no transaction in three out of each four accounts opened under Jan Dhan.

Two worrying trends emerge out of the above figures. First, private banks are showing little interest in the scheme. Second, majority of the accounts remain dormant. Just opening the accounts won’t solve the problem of financial exclusion. It can make life better only if it is linked to livelihood programmes.

Livelihood Linkages

Several livelihood schemes were highlighted during the Samavesh. Besides financial awareness, the programme included vocational training awareness in locally relevant areas like papad making, mushroom cultivation and making of bricks and sapling pots from dung.

A local not-for-profit organisation Chalo Gaon Ki Aour was roped in to provide training and demonstration in the areas where there is scope for employment generation locally.


Show me the Money

While carrying out financial literacy training at Samavesh, many irregularities came to the fore including instances of poor asked to pay ₹500 for opening zero-balance Jan Dhan account.

When 54-year old Ranjana Devi (not the original name) from Himmatnagar village went to a bank to open an account under Jan Dhan, she was asked to show an identity and residence proof or pay ₹500. Neither she had any identity and residence proof, nor was she is in a position to pay the money demanded. So she could not open the bank account.
Ranjana is not alone. More than half of the women who participated in the training programme complained about irregularities in the process. The banks are asking either for money or documents that they don’t possess.
This is clearly illegal as Jan Dhan accounts are being opened with zero balance and self declaration. It must be probably a demand for bribes. As regards the documents required for opening the accounts, the Reserve Bank of India (RBI) has clarified that even those persons who do not have officially valid documents can open an account. The account can be opened on the basis of a self-attested photograph and putting his/her signatures or thumb impression in the presence of an official of the bank.
However, such accounts have limitations regarding the aggregate credits (not more than ₹100,000 a year), aggregate withdrawals (nor more than ₹10,000 in a month) and balance in the accounts (not more than ₹50,000 at any point of time). These accounts would be valid normally for a period of 12 months. Thereafter, such accounts would be allowed to continue for a further period of 12 months, if the account-holder provides a document showing that he/she has applied for any of the officially valid document, within 12 months of opening the account, according to a RBI statement.
Skoch Group raised these irregularities with the lead bank of the region—Bank of Baroda—and other stakeholders in Pilibhit. Even though, the senior bank officials admitted that denying bank account to any individual because of money or document is illegal, they did not rule out such practices.
“This is a crime. Those involved in such practices must be punished,” said S K Mathur, General Manager of Canara Bank in Lucknow. Mathur, who participated in the Samavesh, said such irregularities dampen people’s confidence in the system.


Pilibhit is predominantly agrarian and as per 2011 census, 82.7 per cent population of the district lives in villages. It is rich in livestock. Training was given to ensure optimum utilisation of solid animal wastes (dung). Women learnt the process of making bricks and sapling pots from dung. These products are made with the help of a machine that costs ₹45,000. These products are environment friendly. Sapling pots, on the one hand, discourage the use of polyethylene and on the other, work as manure that helps in a healthy growth of the sapling. Bricks can be used at crematorium instead of wood and also for other purposes like bonfire.

Cultivation of cash crops like henna (mehndi) and mushrooms were also demonstrated at the Samavesh programme. 

Appreciating the Skoch’s initiative, Maneka Gandhi said the awareness and training programme would help bridge gap between Jan Dhan and livelihood linkages. The minister said she is supporting several employment-linked schemes in the district.

Bank of Baroda, Canara Bank and Punjab National Bank participated in the exhibition and showed interest in extending credit and support for livelihood linkages. 

However, Skoch study revealed some serious lacuna in the livelihood programme run by the lead bank in the district – Bank of Baroda (BoB). It claimed that it has provided free training to 1,563 people in 20 different activities since May 2011. SKOCH investigation revealed that the actual number is not more than 700. However, what is more disturbing is the bank’s apathy in extending credit. Out of all these trained people in more than three years, the bank has extended credit to only seven people.

BoB provided training on computer hardware service, maintenance and networking, mobile repair, TV repair, dairy farming, Tally software. But there is hardly any employment opportunity for those who got trained in the district. As a result, most of the people who got the so-called training are either unemployed or engaged in the activities where these trainings have no use. 

Samavesh programme highlighted the need for providing training only in those areas that are locally relevant—the idea was that people can either do something on their own or find a job without migrating. If there is no scope of employment for an activity, training should not be imparted in those areas. What is relevant for a particular district or place may not be relevant for another. Take for example, training in Tally software and computer hardware maintenance and networking could be very useful for the job seekers in the areas like Bengaluru and Delhi where there are a lot of IT-related businesses and activities, but it may not be true for Pilibhit. 

The Way Forward

“Whenever I come to Pilibhit, I go to 10-15 villages. The first question I ask is about the bank account. When I ask who all have got the account, some people raise their hands. But when I ask how many have not got it, three times more hands go up.”
Maneka Gandhi

Until now the focus of Jan Dhan scheme has been on opening accounts. Targets have been set on the number of accounts. In fact, if we go by the official figures, the achievements have been excellent. The 75 million accounts opening target was achieved two months ahead of the schedule and the new target of 100 million has been crossed one month ahead of the targeted date of 26th January 2015.

Financial inclusion is an imperative to eradicate poverty. But merely opening a bank account won’t solve the problem. For example, no transaction has taken place in three out of the four accounts opened under Jan Dhan. If the accounts remain dormant the account holders won’t be entitled for the associated benefits like overdraft facility and insurance cover.

Now the bigger challenge is to ensure that the people have the money to keep in the account and transact. For this livelihood linkage is crucially important.

All the welfare schemes of the centre and the state governments should be linked to the PMJDY. Subsidies should be provided through Jan Dhan accounts. Jan Dhan should also be linked to the National Rural Livelihoods Mission and MGNREGA scheme. 

Micro-credit must be extended to poor without hassle to enable them to get out of the vicious cycle of unemployment and poverty. 

Banks must become proactive and have faith in the poor. Take the example of Bank of Baroda’s training programme under which it claims to have provided training to 1,563 people, but only seven have been extended credit facilities. This highlights a serious problem. Firstly, banks run training courses just to comply with the government’s diktat but don’t have faith in it. Secondly, they grossly ignore the poor when it comes extending the credit.

Training should be provided only in those areas that are locally relevant and have job opportunities available. The situation should be conducive for people to demand banking services. They should feel the need and open an account as it should be demand driven, rather than pushing it by the government diktat or regulation.

Gyanendra Keshri

Consulting Editor, INCLUSION
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