Jamshedpur : Dr HK Pradhan, Professor of Finance & Economics at XLRI Jamshedpur and Chief Mentor of financial literacy initiative SANCHETANA emphasised upon the need for a national campaign like Jan Dhan Yojana involving all banks in their account opening drive.
Enhancing aceess2finance through bank-linkage drive is a basic need for every low-income and vulnerable household and financial literacy enables them to be more informed about their financial decisions.
The bank account opening drive has to be followed up with a more sustained financial literacy drive and consumer protection initiatives. As a socially sensitive management institution like XLRI we have set a goal for ourselves in spreading financial literacy among the unbanked.
He went on to add that the basic savings bank accounts comes with an accidental insurance cover upto Rs 1.00 Lakh and an overdraft of Rs. 5000/- in due course.
It will also be good to reflect on self-sustainability aspects of the proposed insurance and overdraft arrangements and their economics. It is to be noted here that there are banks who are already offering accidental insurance cover for their account holders.
Pradhan said that more clarity is needed regarding the availability of the proposed accidental insurance cover and the overdraft facility for the existing account holders opened previously under the financial inclusion plan and even older accounts of rural as well urban households falling in the category of poor households.
The broader issues associated with the unfolding financial inclusion drive may also include, for example, as to how the bottom-lines of participating banks will be affected by this move.