Jan Dhan Yojana may soon allow more free ATM transactions

QUICK PILL

• Currently, every ATM card holder is restricted to three free monthly transactions from ATMs of other banks.

• The Union government is in talks with the RBI to allow more free ATM transactions for certain accounts as part of its drive to widen financial inclusion through the spread of cash-vending machines

According to a report by Times of India, the Union government is in talks with the Reserve Bank of India (RBI) to allow more free ATM transactions for certain kinds of accounts as part of its drive to enhance financial inclusion through the spread of cash vending machines.

The report adds that post offices across India will soon have ATMs - these will be a combination of the postal department's own machines and third-party ATMs.

"Right now there is a restriction on the number of ATM transactions you can do every month. We are working with RBI to see whether we can enable more of these transactions," a senior finance ministry official was quoted as saying.

The government believes that ATM transaction costs can be significant for Jan Dhan Yojana account holders. The government is making changes to ensure that more people get streamlined and included into the banking process.

The hurdle

Currently, every ATM card holder is restricted to three free transactions from ATMs of other banks.

ATM transactions by savings bank account holders can also be restricted at their own banks to a certain count, Beyond this, they are charged up to Rs 20 per usage.

What is the Jan Dhan Yojna scheme?

The Jan Dhan Yojana is the government's financial inclusion initiative that led to the opening of accounts for at least one person in every household across the country.

Under the scheme, account holders are provided zero-balance bank account with RuPay debit card, in addition to accidental insurance cover of Rs 1 lakh.

One of the major aims of Jan Dhan Yojana was to provide mobile banking for the poor through National Unified USSD Platform (NUUP) for which all banks and mobile companies have come together.