The Congress on Thursday said the Jan Dhan accounts, one of Prime Minister Narendra Modi’s flagship programmes, were “an exercise in mass deception”, aimed at creating propaganda tools for “self-praise” rather than the avowed objective of financial inclusion of the poor.

“By December 2016, twenty-four per cent of the Jan Dhan accounts were zero-balance accounts. No data is available for the subsequent period,” former finance minister P. Chidambaram told a news conference.

“Of the remaining accounts, 15-20 per cent have a balance only because bank managers were encouraged to deposit Re 1 in the accounts. (A total of) 6.1 crore Jan Dhan accounts — one out of five — are inactive. According to the World Bank’s Global Findex Database 2017, forty-eight per cent of bank accounts in India are inactive.”

The World Bank report also suggests that 33 per cent of the Jan Dhan accounts were opened by people who already had bank accounts.

Chidambaram said the “SBI alone has spent Rs 775 crore as on 31 December 2016 for maintaining the accountants”, without any comparable benefits accruing to the customers.

He claimed the former UPA government had come up with the idea of financial inclusion with the Basic Savings Bank Deposit Account, also called the “no-frills account”, and opened 25 crore bank accounts by May 2014.

He added that the UPA government had taken several measures to create the necessary financial architecture.

“The BSBDA scheme was renamed the Jan Dhan Yojana. Between 2010 and 2014, (some) 12,748 rural branches of banks were opened and 303,504 bank correspondents appointed,” Chidambaram said.

“In the following four years, between 2014 and 2018, (a total of) 4,679 rural branches were opened and 177,639 bank correspondents appointed. Despite the boast of Jan Dhan, the credit-deposit ratio of the rural population that had reached 67 in March 2014 had declined to 60 by March 2017.”

Chidambaram added: “It is now common knowledge that the Jan Dhan accounts were used to launder money after the demonetisation. (A sum of) Rs 42,187 crore was deposited in Jan Dhan accounts between 8 November 2016 and 30 December 2016.

“Initially, the finance minister threatened legal action but the finance secretary ruled out any investigation on the grounds it would be a ‘time-consuming process’. United Bank of India alone had 1,180,000 (11.8 lakh) Jan Dhan accounts with over Rs 1 lakh so-called savings.”

Chidambaram objected to the conversion of some Jan Dhan accounts into regular savings accounts without the consent of the customer and the levying of charges for not maintaining the minimum balance.

“The government has talked up the life and accident insurance benefits available with a Jan Dhan account but failed to mention that the Rs 30,000 life insurance feature applies only to those who opened an account between August 15, 2014, and January 31, 2015,” he said.

“This incentive was introduced only to generate record account openings rather than offer a real benefit. The government has failed to disclose how many account holders have got the insurance after an accident or death.”