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Public sector banks' long-term strategy on Jan Dhan begins to pay off -TCA Sharad Raghavan

-The Hindu

Total deposits in the last three years have grown by over 2.5 times to Rs. 98,400 cr.

Public sector banks stand to earn as much as Rs.5,000 crore due to the increasing quantum of deposits placed in Jan Dhan accounts, and can vastly monetise this resource once they start implementing advanced analytics and begin lending to these customers, according to industry players and analysts.

Over the last three years, the number of Jan Dhan beneficiaries has risen from 22 crore to 35 crore, as of April 10, 2019. This represents a growth of nearly 60% over the three years. The growth in the number of accounts has been pretty steady over the last three years, with the demonetisation year of 2016-17 seeing the fastest growth of about 27%, which then subsequently slowed to a nevertheless robust 10% in 2017-18 and 12% in 2018-19.

Deposits, however, have seen a much stronger growth rate over this period. The total quantum of deposits in Jan Dhan accounts has grown from a little more than Rs.36,000 crore in April 2016 to Rs.98,400 crore in April 2019, a growth of more than 2.5 times.

Demonetisation, as expected, resulted in a rapid increase in the quantum of deposits soon after the announcement. Deposits surged 66% from about Rs.44,500 crore in mid-October 2016 to Rs.74,000 crore by mid-December 2016.

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