The Jan Don’t Have Any Dhan

“Whatever you might say, this move has started flushing out black money and bringing it into the banking system,” I said, turning my morning daily’s banner headline towards the wife, who was sitting across the dining table.

“More than 60,000 crore rupees has been deposited into Jan Dhan accounts across India. Surely this is not money belonging to the great unwashed in India’s villages, who you care so much about?” I said with a smirk.

“How many Jan dhan accounts do you think there are?” the wife asked smiling condescendingly.

“I don’t know,” I said. “Must be a few million, but I don’t see how that matters. Surely the poor don’t have 60,000 crore rupees!”

“The number is approximately 26 crore,” the wife said. “60,000 crore rupees in 26 crore accounts. How much does that work out to, Mr Einstein?”

“I can’t calculate that fast, but it is clearly a big number”, I said defensively as I buttered my toast.

“It is a princely sum of 2,300 rupees per account.” The wife smiled derisively. “2,300 rupees of black money from each account holder.”

“Oh! Come on!” I said. “That is the average. Surely many of the accounts would have got many times that amount.”

“You are absolutely right,” the wife said. “They must have. That’s because even in September this year, 25% of all Jan Dhan accounts were completely inactive and another 30-35% had less than 10 rupees in them. In many cases, banks themselves have been depositing small amounts of cash into these defunct accounts to meet their targets.”

“I have to check all this data,” I said. “How do I know you are not making them up to prove me wrong?”

“If only you even read the morning papers properly, you would have known all this,” the wife snapped. She hates it when she is accused of fudging data. “If you read a little bit, you would have known that in many cases, people are being forced to deposit 50 rupees in their accounts to just operate them, even though the government had promised to make these zero balance.”

“So what? At least it’s an attempt to bring banking to everyone,” I said. “This is what financial inclusion is all about.”

“No,” the wife said vehemently. “It is a massive wastage. On an average a Jan Dhan account gets no more than 300-400 rupees a year in deposits, and a bank earns just 9-12 rupees from that. It costs many times that amount to just maintain these accounts. Public sector banks are forced to operate these loss-making accounts and then told they are inefficient because they don’t make enough profits.”

“You MNC bankers have no problem with that, because you continue to service the rich and wealthy,” the wife said glaring at me, as if I represented all that was evil about the world of finance.

“Poor people are being forced to open accounts, which are serviced by roving banking correspondents,” she continued. “The banking correspondents park themselves in small towns and poor villagers have to waste a day and spend money on bus tickets to go and get their dues from them.”

“Right now, thanks to demonetization, the banking correspondents and local branch officials have become all-powerful petty-potentates.” The wife had started using big words again and I had started losing track of her argument.

“Bank officials of all sorts have full access to the accounts held by the rural poor, along with all their KYC documents. It is very easy for them to fudge deposits and turn black money held by grain traders, money-lenders and big farmers into white, by putting them into Jan dhan accounts.”

“That’s just a conspiracy theory,” I said weakly.

The wife ignored by intervention. “The deposits will be small enough to be below the radar and will be spread across thousands of accounts. After a while, the money will be withdrawn in crisp new notes and handed back to the original black money holders for a sizeable cut.”

She drained her coffee cup and put it down with a flourish. Clearly, we were nearing the end of the speech.

“So, this is what your great financial inclusion is about. Millions of poor people will unwittingly turn other people’s black money to white, without ever knowing what went on in their accounts.”

“And at the end of it all, the jan will continue to be without any dhan.”