Jan Dhan Accounts Draw Rs 27,000 Crore In Two Weeks After Demonetisation

The decision to withdraw Rs 500 and Rs 1000 notes from circulation led to a surge in deposits in Jan Dhan accounts, forcing government leaders, including the Prime Minister to warn citizens against using these accounts to park unaccounted deposits.

Official data released on the Jan Dhan website over the weekend, shows that banks saw their total deposits under the Jan Dhan Yojana swell to Rs 72,835 crore on November 23 from Rs 45,636 crore recorded on November 9. That’s a near 60 percent jump in deposits in two weeks.

While the largest increase, in terms of absolute quantum of deposits, came from public sector banks, the percentage increase was most pronounced in the case of regional rural banks.

Jan Dhan deposits in regional rural banks increased 77 percent over the fortnight to Rs 13,507 crore. Private banks saw a near 66 percent increase in deposits in this category while for public sector banks, there was a 55 percent jump in deposits.

The official release of Jan Dhan data comes on the heels of Prime Minister Narendra Modi warning people against using Jan Dhan accounts of the poor to stash their black money during his ‘Mann Ki Baat’ radio address on Sunday.

"Even now, some people think they can bring their black money, the money earned through corruption or the one which is unaccounted for, back into the system through illegal means. Unfortunately, they are misusing the poor for this purpose by misleading, luring or tempting them by putting money into their accounts,” said the Prime Minister.

The huge spike in deposits in Jan Dhan accounts is accompanied by new account openings as well.

In a matter of two weeks, banks opened 17 lakh new Jan Dhan accounts, with a bulk of these accounts opened in regional rural banks and public sector banks. Before demonetisation, there were 25.51 crore accounts in total which rose to 25.68 crore accounts in just two weeks.

Private banks opened two lakh new accounts after demonetisation out of a total of 17 lakh accounts. However, it was the private lenders who saw the biggest fall in zero balance accounts after demonetisation. The percentage of zero balance accounts across all banks came down from 23.27 percent as of November 9 to 22.94 percent as of November 23. In the case of private banks, there was a full percentage point fall in zero balance accounts.

Interestingly, regional rural banks which opened a lot of new accounts during the period saw their zero balance accounts actually increase marginally.

Eight lakh new RuPay debit cards were issued to Jan Dhan account holders during the two weeks after demonetisation. The total number of RuPay cards issued under the scheme now stands at 25.68 crore.

Following, the demonetisation exercise, the government has also increased its focus on Aadhaar based digital banking and card transactions. Banks linked 16 lakh new unique identification cards with Jan Dhan accounts between November 9 - November 23. The linking of UID cards is aimed to target and deliver subsidies and benefits transfers better.

The data also shows that the average balance in Jan Dhan accounts has almost doubled to Rs 6000 per account from Rs 3795 on November 9 if one doesn’t consider the zero balance accounts.