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Banking giant JP Morgan to invest in India for a social cause

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jpmorgan-l-apInitiating change through upliftment of the underprivileged Indian women, world’s biggest bank by assets JP Morgan, shall invest over half a million dollars (Rs 3.9 crore) for them to do more banking, informed an official.

The two-stage programme involves first identifying reasons why women bank accounts are inactive and later coming out with a value proposition for them by involving a financial services company and a digital payment company. The funds have been provided to the Institute of Rural Management Anand Society (IRMA) which will partner Grameen Foundation India.

“The research will study the use of cash by poor households and their propensity to replace these cash-based transactions with digital financial services channels. The program is based on the hypothesis that when infrastructure to access financial products is in place, when there is value proposition for both users and providers, and when there is trust and handholding it will lead to lower dormancy of bank accounts,” said Kalpana Morparia, CEO, JP Morgan, India.

According to a World Bank report, India has close to 20 crore dormant accounts.

“Women are usually less empowered and economically weak members of poor households. Their specific needs and concerns are usually not addressed,” expressed Chandni Ohri, CEO of Grameen Foundation.

 “We also recognise that women are part of households and economic activity is usually managed at a household level. As part of this project, we will encourage women to set up or reactivate their individual bank accounts but we are not going to be rigid about that – they could also use joint accounts or even their husband’s or family member’s account. The goal is not to have women have their individual bank accounts but helping them understand that banking services can be relevant to them,” said Ohri.

Activating bank accounts for the poor has become a priority after the Prime Minister Jan Dhan Yojana (PMJDY), which resulted in 20.02 crore accounts being opened so far. While the usage of these accounts has picked up, over 31% of these accounts continue to be zero balance accounts.

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