PSU Banks Are Under Huge Pressure to Implement Social Security Plans

 

The Indian government has reportedly requested that Public Sector Banks increase the number of people enrolled in the PMJJBY and PMSBY social security schemes.  In order to accomplish this, banks are exerting tremendous pressure on branches to sign up as many clients as possible for this program.

 These letters and communications demonstrate the intense pressure banks are putting on branches to maximize social security enrollments.

PNB Orders Branches to achieve targets under PMJJBY, PMSBY

Bank branches are the most direct and reliable channels for raising awareness of government programs because they deal with clients on a daily basis.  Consumers frequently seek counsel and direction from banks in addition to financial services, which increases their openness to information provided by bank employees.

Banks now serve two purposes: they continue to offer financial services, but they also play a significant role in advancing the government's social welfare program. As a result, banks now serve as a conduit between the public and the government, guaranteeing that welfare programs reach the people where they are most needed.

Banks are involved in much more than just deposits, loans, and payments. They now play a crucial role in the development of the country by assisting in the expansion of financial inclusion and offering millions of people a safety net through government-sponsored programs.

The implementation of this pressure on bank branches will determine if it is appropriate or not.  On the one hand, the government's objective is admirable; programs like PMJJBY and PMSBY give crores of Indians who would not otherwise have access to insurance reasonably priced insurance.  Naturally, banks are the ideal way to raise awareness and increase enrollments because they are the most reputable financial institutions with direct access to customers.

 But when branch goals become unattainable and employees are compelled to vigorously promote enrollments, there is cause for concern.  In these situations, it may result in misselling, unhappy customers, and more stress for staff members due to workload.  The programs run the risk of being viewed as a burden by both employees and clients, rather than promoting voluntary awareness and informed decision-making.

The emphasis should ideally be on awareness and education rather than merely statistics.  Enrollment will rise steadily if banks provide comprehensive explanations of the advantages and promote sincere involvement.  However, too much pressure could lead to mistrust among customers and discontent among employees.

 What advantages do these systems provide?

 In India, the government supports the Pradhan Mantri Suraksha Bima Yojana, an accident insurance program.  For a yearly premium of Rs.20, individuals with bank accounts who are Indian residents or NRIs and between the ages of 18 and 70 can apply for the Pradhan Mantri Suraksha Bima Yojana.  The nominee will receive Rs.2 Lakh in the event of death or complete disability, and Rs.1 Lakh in the event of partial permanent disability.

Atal Pension Yojana is a government-backed pension scheme in India, primarily targeted at the unorganised sector. Any Indian citizen within the age group of 18 – 40 years, can join APY Scheme. Each subscriber under APY shall receive a guaranteed minimum pension of Rs. 1000/- per month or Rs. 2000/- per month or Rs. 3000/- per month or Rs. 4000/- per month or Rs. 5000/- per month, after the age of 60 years until death.