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Prime Minister Narendra Modi's ambitious Pradhan Mantri Jan Dhan Yojana, which is a continuation of the earlier government's financial inclusion plan (FIP), takes off today. The aim of FIP is ensure that all the 750 million unbanked households across India have access to core banking services and have at least one account each. For the launch of the renamed scheme, the prime minister set an unbelievable target for the first day (August 28): open 10 million bank accounts through 60,000 camps organised by bank branches across rural India.
But this target seems near impossible to achieve if one were to do some basic number crunching and see past trends. According to Reserve Bank of India’s annual report, only 100 million accounts have been opened in the first phase of FIP between 2010 and 2013. (The first phase, that ended in March 2013, aimed at bringing all villages with more than 2,000 people within the formal banking system.)
Going by the past trend and given the present banking infrastructure, it would take at least four months to open 10 million bank accounts.
But if the gigantic task of opening 10 million accounts is indeed accomplished in one working day (August 28), as directed by the prime minister, then one would be led into believing that universal coverage of all unbanked households (750 million) would be possible in just one week.
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| The challenge
It means each camp would have to open 167 accounts But processing time to open one account takes 20 minutes (1/3 hr) It means 167 accounts would take 3,340 minutes (56 hrs) If we take a working day of eight hours, then only 24 accounts can be opened in a day If a day's work shift is increased to 12 hours, then only 36 accounts can be opened 167 accounts can be opened only if officials in a camp process one account every three minutes and work non-stop for eight hours |