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The government has recently launched an projects in these sectors had become quite difficult
effective scheme to promote the cause of financial for the banks. These sectors constitute the major
inclusion—the PMJDY: portion of banks’ non-performing assests.
Banks have been seeking permission for
PrADhAn mAntri jAn-DhAn yojAnA longer tenor amortisation of the loan with periodic
To achieve the objective of financial inclusion by refinancing of balance debt. Banks have been raising
extending financial services to the large hitherto resources in a significant way, issuance of long-
unserved population of the country and to term bonds for funding loans to infrastructure
unlock its growth potential, the Pradhan Mantri sector has not picked up at all. Infrastructure and
Jan-DhanYojana (PMJDY) was launched on 28 core industries projects are characterised by long
August 2014. The Yojana envisages— gestation periods and large capital investments.
(i) Universal access to banking facilities with The long maturities of such project loans consist of
at least one basic banking account for the initial construction period and the economic
every household, life of the asset/underlying concession period
(usually 25–30 years).
(ii) Financial literacy, access to credit and
insurance. In pursuance of the Union Budget 2015–16, the
RBI announced ‘eased’ norms in July 2015 for the
(iii) The beneficiaries will receive a RuPay
banks to take care of the Asset–Liability Management
Debit Card having inbuilt accident
issues of the banks, which are as follows:
insurance cover of Rs1 lakh.
(i) Banks allowed to raise fund through
(iv) In addition, there is a life insurance cover
long-term bonds (with maturity period
of Rs. 30,000 to those who opened their
of not less than 7 years),
bank accounts for the first time between
15 August 2014 and 26 January 2015 (ii) Such bonds exempted from the
and meet other eligibility conditions of mandatory regulatory norms such as the
the Yojana. CRR, SLR and PSL.
The Yojana has entered the Guinness World (iii) Such funds to be used to finance long-
Records for opening most bank accounts during term projects in infrastructure, core
the week starting 23 August, 2014 as part of sector and affordable housing. Affordable
the financial campaign. As on 28 January 2015, housing means loans eligible under the
priority sector lending (PSL), and loans
12.31 crore bank accounts have been opened, of
up to Rs.50 lakh to individuals for houses
which 7.36 crore are in rural areas and 4.95 crore
costing up to Rs.65 lakh located in the six
inurban areas. Under the PMJDY, 67.5 per cent
metropolitan centres. For other areas, it
of the accounts as on January 28, 2015 are with
covers loans of Rs.40 lakh for houses with
zero balance.
values up to Rs.50 lakh.
alM oF Banks (iv) Banks can extend long term loans with
flexible structuring to absorb potential
Banks have been faced with Asset-Liability adverse contingencies, known as the 5/25
Management (ALM) problems in recent times structure. Under the 5/25 structure, bank
due to their existing long-term loans forwarded to may fix longer amortisation period (25
certain sectors, viz., infrastructure, core sector and years) with periodic refinancing (every 5
real estate sector. Again, raising new funds for new years.