Pradhan Mantri Jan Dhan Yojana (PMJDY) was a scheme launched by the government across India in August 2014, to provide bank accounts to every individual who does not have a bank account and is to be achieved. This scheme was launched to ensure financial access to every individual and at the same time get benefits of other finance related government schemes. Individuals aged above 10 years can get bank accounts at zero balance if they fulfill the other eligibility required for the same.
PMJDY is an ambitious projects initiated by the Prime Minister Narendra Modi to help the poor population in rural areas of the India to become more financially confident and stable. Not only that this venture allows every Indian citizen to have their own bank account and insurance coverage which was previously impossible for those who lie under poverty.
PMJDY has been an immensely great initiative to provide the poor that financial stability but over the time it has observed that this scheme has be missed used by “money mules” and there are possibilities of fraud practices which recently came into notice.
Reserve Bank deputy governor SS Mundra highlighted saying- “It was an account of a daily labourer in Punjab and the account was opened as a basic one where there is limitation on number of transactions. This amount of transaction was of Rs 1 crore,” he said. This happened without the notice to account holder. This fraud was into notice when the income tax authority sent a notice to the account holder.
Not only that, Mudra added- “This episode highlights the failure of the banks system and processes for monitoring of newly opened accounts”.
Seeing this RBI has warned banks to keep a protective shield against such activities as they are “very vulnerable” to frauds. He also said that the banks should have a proper method that shall include some alerts and exception transaction mechanism to monitor transactions in these account to avoid frauds. Monitoring such accounts with the help of efficient robust system can help better customer protection and safe transactions.
In a recent event, Mundra said- “The newly opened accounts under the PMJDY (Pradhan Mantri Jan Dhan Yojana) could be very vulnerable to fraud practices. Banks need to clearly guard against misuse of these accounts from money muling.”
He further added- “What we are observing of late is that while the standard and the vigour of Know your customer ( KYC ) has become quite good at the time of opening of the account, but the same is not observed in the continuous surveillance or continuous watch over the transactions in these accounts.”
He suggested further, to avoid frauds and illegal access to deposits of the account holders, third parties can be can be recruiting to keep an eye on the criminals trying for ‘money mules’. Being strict on the banks, Mundra has dropped a warning for banks and said if banks does not opt proactive measures to stop such illegal and unethical transactions, they would face some action from both RBI and other enforcement agencies. Mundra stated warning as- “Failure to guard against misuse of customer accounts, might result in banks incurring supervisory sanctions and enforcement action from the RBI. It can have the money laundering angles and there could be action from the various enforcement agencies as well.”
Verdict: Government is working continuously to bring the Indian economy and improvise the standards of rural population making it financial stable and to provide access to government schemes. To gain benefits by unfair means become a trend for those who believe in “money mule”. Proper monitoring is required and negligence by banks should be punished.
Author: Mrs. Viveka Nagar