Lockdown is being relaxed and as economic activities started bringing people to a new normal, people need money now. Thanks to the efforts of RBI, which has injected liquidity through Targeted Long Term Repo Operations (TLTRO 2.0) and it will take more time to reach the poor as the Banks, NBFCs, and MFIs must collect the loan applications, make appraisals, take documentation and then disburse the money. Under this context, the use of Overdraft Facility under the Jan Dhan account must be harnessed.

As per RBI’s Report on Trends & Progress of Banking in India 2018-19, OD facility has been given to only 59 lakh Jan Dhan account holders (2.8% of the total eligible accounts- one-woman account per household is eligible for this OD Facility if they operate their Jan Dhan account for 6 months) and to the tune of Rs.443 crore (0.2% of the eligible potential of Rs.208,300 crore) so far. The Finance ministry And RBI should advise the Banks to release Rs.10,000 to all the eligible women account holders (assuming 50% of the total 20.83 Crore Jan Dhan accounts as of Apr 2020) and this will amount to Rs.100,000 crore in the hands of the poor (this can be reached to the poor as it does not require any elaborate documentation as required in any conventional lending), which will help them smoothen their consumption and Restart their economic activities in the productive sector. SHG federations can be of help in this regard to the Banks to identify the eligible Jan Dhan women account holders in their SHGs to use this overdraft facility and they can educate them on this.