Kolkata, March 28, 2017

Between January 1-March 15 close to Rs 10,500 crore was withdrawn from these accounts

Jan Dhan accounts, which had seen a sudden surge in deposits after the government's move to demonetise Rs 500 and Rs 1,000 notes, to around Rs 74,000 crore at the end of November last year, are experience brisk withdrawals now. Between January 1 and March 15, 2017, close to Rs 10,500 crore was withdrawn from these accounts.

According to the Jan Dhan website, total deposits in Jan Dhan accounts stood at around Rs 63,836 crore on March 15, 2017, compared with Rs 74,321 crore at the end of November 2016.

"Jan Dhan accounts have almost reached a level of saturation. Also, with withdrawal limits in banks getting eased, deposits have also got withdrawn. Now, the focus has shifted to Aadhaar card linkage, Rupay Card and Atal Pension Yojna," said a senior banker at a public sector bank.

Notably, providing Jan Dhan accounts was a mission mode plan. Launched on August 28, 2014, the target was to open one account per household, which was achieved by January 26, 2015.

Deposits of Jan Dhan Accounts had surged nearly 45 per cent in 23 days between November 8 — the day Prime Minister Narendra Modi announced demonetisation — and November 30. Deposits had swelled from around Rs 45,000 crore to close to Rs 65,000 crore in the time period and further peaked towards the December end. This had also raised concerns if unaccounted money was being diverted to these accounts. Banks were also asked to provide details to the government on high-value deposits in these accounts post demonetisation.

"We will have to wait for the data after March 13, when all caps on withdrawal were removed, to assess the extent of withdrawals," said Pawan Bajaj, managing director (MD) & chief executive officer (CEO), United Bank of India.

"We have seen some withdrawals in Jan Dhan accounts in the last two months. However, it is not something alarming," said R K Takkar, managing director and chief executive officer, UCO Bank.

In general, Uttar Pradesh (UP) and West Bengal have been leading states in terms of deposits from Jan Dhan accounts. From November 8 to December 8, 2016, deposits in Jan Dhan accounts of UP increased from about Rs 7,493 crore to Rs 12,021 crore, and that of West Bengal increased from about Rs 6,286 crore to Rs 9,193 crore. As on March 15, 2017, Jan Dhan deposits in UP and West Bengal stood at Rs 10,154 crore and Rs 8,213 crore, respectively.

So far, about 65 per cent of accounts under Jan Dhan have been linked with Aadhaar or unique identification numbers. Of nearly 280 million accounts, nearly 178 million have been Aadhaar-seeded.

Low-cost deposits from Jan Dhan accounts had also improved liquidity in banks, as they were flush with funds. However, on account of low credit offtake, the falling Jan Dhan deposits are unlikely to impact the cost of funds for banks.

Chart showing the movement of deposits in Jan Dhan accounts:

Jan Dhan Deposits Movement Date
Deposits in Jan Dhan Accounts
(Rs Crore)
02.11.2016       45,302
09.11.2016      45,636
16.11.2016      64,252
30.11.2016      74,322
28.12.2016      71,037
04.01.2017      70,071
25.01.2017      67,325
22.02.2017     64,720
15.03.2017     63,836
Source: Jan Dhan website  


[The Business Standard]