Finance Ministry measures to boost direct benefit transfer
To ensure that beneficiaries of direct benefit transfer (DBT) are able to access real-time banking services, the Finance Ministry wants seamless connectivity between banks’ core banking solution platforms and business correspondents.
Currently, many business correspondents (BCs) operate offline. As a result, sometimes DBT beneficiaries are not up–to-date about the funds position in their bank accounts.
This often results in payment transactions getting held up, said a senior public sector bank official.
Business correspondents are retail agents engaged by banks for providing banking services at locations where setting up a branch or an ATM is not viable.
Core banking solutions allow banks to network their branches so that customers can operate their accounts and avail other banking services from any branch, regardless of where they maintain their accounts.
To avoid delays
The objective of the DBT scheme is to ensure that the money under various developmental schemes of the Central and State Governments goes directly into the bank accounts of beneficiaries without any delay. At present, 26 schemes are covered under DBT.
The Ministry is believed to have told banks to nudge their BCs to conduct online transactions at locations where there is no brick-and-mortar presence.
What this means is that irrespective of the banking channel — branch, ATM or BC — the DBT beneficiary should enjoy instantaneous transactions.
Interoperability of BCs
To make life easier for those in rural areas, the Finance Ministry has said banks must ensure interoperability of BCs — customers of one bank should be able transact with BCs of other banks as well.
This may translate into higher costs for entities that provide BC infrastructure to banks. They would have to incur additional expenditure to upgrade the handheld devices used for transactions, said the banker.
Banks play an important role in the implementation of DBT, as they open accounts for all beneficiaries and link the accounts with unique identification (Aadhaar) numbers. Credit disbursements under DBT are based on these numbers.
The DBT scheme was launched in January 2013 and has been rolled out in a phased manner, starting with 26 welfare schemes, in 43 districts. It is now being extended to an additional 78 districts and would later cover the entire country in a phased manner.
The schemes that are currently covered under DBT include scholarship for education; scheme for welfare of the girl child; scheme for safe motherhood intervention to reduce maternal and neonatal mortality; and payment of stipend to trainees under the Scheme of Skill Development in 34 Districts affected by Left Wing Extremism.
Banks are permitted to engage individuals or entities as BCs.
These include retired bank employees, retired teachers, individual owners of kirana / medical / fair price shops, individual Public Call Office operators, and for-profit companies registered under the Indian Companies Act.
According to RBI data, as at March-end 2013, banks had deployed 2,21,341 BCs.