United Bank Tops the List with 1.18 Million Jan Dhan Accounts with Deposits of over Rs1 Lakh

The blatant misuse of bank accounts opened under Pradhan Mantri Jan Dhan Yojana (Jan Dhan) now stands exposed through the Right to Information (RTI) Act application filed by Moneylife. This information is sadly restricted to public sector banks (PSBs). So far, United Bank of India (UBI) has disclosed a whopping 1.18 million accounts with a deposit of over Rs1 lakh in Jan Dhan accounts. There is a clear rule that such accounts cannot have a balance of more than Rs50,000 at any point of time, since the accounts were meant to bring the unbanked into the banking fold and help direct transfer of subsidies to beneficiaries.

Instead, it is clear that very weak know-your- customer (KYC) requirements seem to have turned these accounts into money-mules during the demonetisation process to launder unaccounted currency.

These accounts could be opened with a simple Aadhaar card, a job card under the NREGA scheme or just a letter issued by a Gazetted officer, with a duly attested photograph of the person. There seems to have been a rampant abuse of this leniency. The scheme also said that the accounts could remain valid only for 12 months by which time full KYC needed to be done.

It is not clear if the government has done anything in this regard. However, a report in the Business Standard on Wednesday says that 60% of Jan Dhan deposits after the note ban are under investigation. Since it will soon be two years since the government put the economy into a shock by announcing demonetisation, this is, indeed, a slow investigation.

Our RTI filings show that Union Bank of India had 323,000 Jan Dhan accounts with deposits of over Rs1 lakh, followed by Oriental Bank of Commerce with 282,000 accounts. Number of such accounts in other PSBs range between 198 (Indian Bank) to Bank of Baroda at 79,240 Jan Dhan account that have deposits of over Rs1 lakh. This is among those who have responded to the RTI query.

In terms of highest number of Jan Dhan accounts with deposits between Rs10,000 to Rs99,000, Bank of Baroda tops the list with 1.28 million accounts. It is followed by United Bank of India at 1.01 million Jan Dhan accounts. Except Andhra Bank at 65,121, all other banks, who provided the information under the RTI Act, have 117,000(Indian Bank) to 906,000 (Bank of India) accounts with a deposit between Rs10,000 and Rs99,999.

As part of a fact-finding exercise, Moneylife had filed RTI application with the department of financial services, under the Ministry of Finance, seeking information on PMJDY scheme relating to PSBs. The CPIO of the department forwarded our RTI application to all PSBs, asking them to respond us directly. Here are the questions we had asked in the RTI...

What is the maximum amount deposited till date by any account-holder/beneficiary?

The number of accounts having deposit between INR10,000 to INR99,000.

The number of accounts having deposit exceeding INR100,000.

The number of accounts, which are dormant since past two years.

As per latest data shared by PMJDY website , United Bank of India has second highest deposits in Jan Dhan accounts. United Bank has deposits of Rs8,012.02 crore from 126 million Jan Dhan account beneficiaries. State Bank of India (SBI) tops the list of total number of account beneficiaries (105.1 million) and amount deposited (Rs18,971.76 crore) in Jan Dhan accounts. Considering its size and network, for SBI these figures are not out of proportion. For United Bank, however, the number of beneficiaries and total amount deposited under Jan Dhan accounts looks completely out of proportion.

You may also want to read…