The Hindu Business Line : Smart cards for disbursement of social welfare benefits mooted

Mumbai, April 25 Benefits of social welfare programmes of the State Governments could be distributed through the bank-led smart card based model which is being implemented in Andhra Pradesh, the Reserve Bank of India has said.

A report of the high-powered committee, appointed by the RBI to study the issue, was released today.

The report said that all cash payments are mostly being made through the Government departments either directly or through gram panchayats. However, most of the time payments are delayed. There also complaints of misuse and leakages in the system.

“Timely disbursal of the benefits is an essential requirement of any welfare scheme and ensuring that no leakages occur would also be an essential element,” said the report.

Different models

After examining three possible models of Electronic Benefit Transfer (EBT), bank-branch model, bank-led model and non-bank model, the report has recommended that the bank-led model may be adopted.

Such an approach to EBT would help in achieving the goal of 100 per cent financial EBT service and also the larger objective of financial inclusion, the report said.

The one-district-one-bank approach is more preferable said the committee, in its recommendations.

The Government, along with the RBI, can identify banks for each district based on number of branches, association in handling Government business and willingness and ability of the bank to deliver such EBT service. Banks that are already handling Government businesses may be given higher weightage.

Smart card biometric identification system should be adopted to identify the beneficiary and to provide host of services other than EBT, the report said.

Smart card system would facilitate loading additional functionalities on the card and the card itself would act like an electronic pass book.

As the Indian Banks’ Association is already examining technology standards for smart card based biometric identification system, these could be applicable for EBT system.

In order to avoid duplication and to ensure that beneficiaries are uniquely identified, the committee has suggested that the exercise should be by the government at the district level based on the data captured at the time of acquiring accounts by the banks.

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