I Too Have Many Cards!

Change is eternal; things keep changing. When we were young, most people around us were illiterate. Almost all of them were poor. Many had not gone beyond a few miles from their place of birth, during their entire lifetime. There was a tendency to accept anything that comes their way as inevitable. Assertiveness and protesting were rarely seen. Submissiveness and falling in line as ordered were the more common qualities. 

Things changed, but changed very slowly in the 50s and 60s. As the number of school going children increased and more avenues for earning other than agriculture and human labour opened up, literacy levels as well as economic conditions improved. Small family norms reduced the number of persons in a household and this also contributed to the improvement of living conditions. Better transportation and communication made people move to newer pastures in search of employment and economic prosperity. 

The wheels of change moved faster in the 70s and 80s. Development in industrialisation, growth in trade and commerce opened more and more avenues for earning and striving for better economic conditions. But even then very few people had surplus money and think of savings. The general philosophy of life was not be a debtor and get into borrowings. Make both ends meet and that was it. Borrowing even for productive assets was not considered wise. Moreover, a common man did not have anyone to lend him. The friendly neighbourhood moneylender was never friendly, actually a loan shark and the exorbitant interest rates were always a threat. 

Governments tried to solve some of the issues, more particularly poverty, shortage of food, and give a helping hand to the needy. The generation of devoted patriots running the governments and serving institutions vanished in the two decades after independence. The ruling groups now believed in making hay while the sun shines. Government resources were meagre, allocations for welfarism was very little, and even this did not reach the real targeted people. There is an oft repeated saying that only 15 percent of all funds for such efforts reached the real beneficiaries. 

When there was no earning and saving, and no one to lend them, there was no need for a bank account for the common man. A ten rupee note was almost as big as a A4 size paper. If at all some little money was kept at home it used to be in the coat (or shirt) pocket of the head of the family. Housewives loved the sesame dabba (container) in the kitchen because it was the place they kept their small coins. Bank branches were there, but were only for the affluent. A savings bank account could be opened with five rupees, but very few had five rupee to spare.

Salaries were disbursed in cash and the lucky ones who had government jobs went to the treasury to get their salaries on the first or second of the months. Most of the households had a very important note book in their houses, the one given by the kirana shop owner to record goods given on credit. Most of the money from treasury went to the shop owner and the entries for the next month would start. Those without such jobs were even more troubled. Banks had no meaning for them.

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Government intervened with "Social Control" over banks. It did not work and in the year 1969, fourteen big banks were nationalised. Some more were done so in 1980. Attempts were made to lend small amounts known as "Small Loans" to those who could not give securities for the funds borrowed. More and more people opened bank accounts now and expansion of branch network to unprecedented levels made a bank branch and bank account available to each and every person. "Loan Melas" made their debut, followed by "Loan Waivers". Some indeed took real benefit from all of these but larger sections were left disillusioned.

Nationalisation of banks and the concept of lending to "Priority Sector" did wonders for the many needy sectors, despite mismanagement and complaints from various quarters. "Green Revolution" and "White Revolution" changed the face of rural economy. Small Scale Industries and private sector industries grew adding more dimentions to the growth story. 

Introduction of "Prudential Norms" in the 90s, brought in the concept of loss-making branches and many bank branches were shut down. Closing down of branches was given a wonderful name as "Branch Rationalisation". Innumerable scams hit the banking sector. From nationalisation of banks it moved to opening of new private sector banks. Bank mergers and consolidation became order of the day. The one good thing amidst all these turbulence was banks providing Housing and Education Loans. Tax incentives added to the benefits of common people availing these loans and improve their economic conditions. Penetration of credit cards added to more freedom in using money. Computerisation and advent of debit cards made everyone have their own "Cards".

Now one could say that bank accounts were easily accessible and having bank accounts was indeed wide spread.

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Now one could say that bank accounts were easily accessible and having bank accounts was indeed wide spread.

Was it really so?

When the Government of India introduced "Jan Dhan Account" 9 years ago, this was the question in the mind of most of the people. There was also a renewed emphasis on the issue and purposes for which AADHAR cards were used. Aadhar cards are more valuable than passports for a vast majority of the population today. Then there was a stress on use of digital payments and use of digital payment apps. BHIM was one of them. Then there were others as well. JAM (Jan-Dhan, Aadhar and Mobile) formed the core of activities to prevent corruption and seepage of funds. DBT (Direct Benefit Transfer) became the tool for this.

A former Finance Minister of the country is on record while speaking in the parliament, ridiculing the stress on digital payments. Where does a vegetable vendor have a mobile, an internet connection and the knowledge of using these gadgets, he questioned. Today, we have videos of dignitaries of other countries buying vegetables on the street using the same methods! The vegetable vendor has a smart phone and very comfortable in receiving payment in Google Pay, PayTM or BHIM app. The system of digital payments is being used by some advanced countries as well. The problem of small change, carrying currencies and allied problems have all vanished. People are making payments using smart watches! 

The statistics that came out after 9 years of Jan Dhan Accounts is indeed astounding:

• More than 50 crore (500 million) Jan Dhan Accounts have been opened in banks. This means more than 35% of the population did not have bank accounts when the scheme was started.
• More than half of these accounts (56%) are of women beneficiaries.
• Two-thirds of the account holders (67%) are from rural and semi-urban areas.
• The critics of the scheme had a field day making fun of the scheme when introduced. All these will remain Zero Balance accounts for ever they said, Today these accounts have more than 2 lakh crore rupees in them (2,03,505 crore rupees. More than 24.5 billion USD)
• 33.98 crore (339.8 million) RuPay cards have been issued in these accounts. (It is more than one card for each USA citizen whose population is 334 million). This saves foreign exchange for the country. Established card managing companies like MasterCard and VISA complained to the USA government against promotion of RuPay cards.

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The achievements under digital payments using UPI is no less spectacular. Today India accounts for over 40% of all real-time digital payments in the world. Volume of transactions have crossed 114 billion per year amounting to over 2,000 trillion Rupees or over 24 trillion USD. IMF lauds this as a "Logistic marvel". G-20 report states that this achievement has come about in 6 years which would have normally taken over 40 years! 

The success of Small Bank Finance in Bangladesh motivated by Shri Mohammad Yunus is well known and even got a Nobel Prize to him. (There are many litigations about him presently which is a different matter). The success of Jan Dhan Accounts and digital payments story in India during the last decade is no less spectacular. 

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Today the street corner vegetable vendor near my house often smiles at me and shows her QR CODE for payment of vegetables dues to her. 

Every time I cross the street and see her, I feel she is telling me "I too have many cards!". Yes. She has an Aadhar Card. a  RuPay card, a PAN card, a Jeevan Jyoti Bima card and may be others as well!