Money & Banking

Finance Ministry tells banks to ensure adequate liquidity for direct cash transfers

KR Srivats New Delhi | Updated on March 27, 2020

Finance Minister Nirmala Sitharaman   -  Kamal Narang

To enable smooth direct cash transfers to women Jan Dhan account holders, the Centre has directed banks to keep sufficient liquidity at their bank branches and with business correspondents.

₹1.7-lakh-crore package

This direction comes on the heels of Finance Minister Nirmala Sitharaman’s ₹1.7-lakh-crore relief package for the poor and farmers announced on Thursday under the Pradhan Mantri Garib Kalyan scheme.

Nearly 20.5 crore women Jan Dhan account holders are expected to get an amount of ₹500 per month – directly credited to their accounts – for the next three months as part of the relief package to enable them access funds during the21-day national lockdown.

In a letter to the Chairman of State Bank of India and chief executives of other public sector banks, the Department of Financial Services (DFS) has also directed banks to ensure regular replenishment of ATMs to meet the requirement.

Where required, mobile ATMs with sufficient cash should also be arranged, the DFS said. Interestingly, DFS has also asked banks to send SMS to the beneficiaries regarding time schedule for withdrawal.

SMS may also be sent to the beneficiaries requesting them to utilise digital payment modes, with a view to comply with the prescribed safeguards such as lockdown restrictions and social distancing, DFS said.

Unique a/c holders

DFS has directed the banks to draw up a list of unique women PMJDY account holders and convey to the department the number of such beneficiaries. After receiving this data, the date of transfer of funds would be intimated, DFS said.

Meanwhile, banking industry sources also said there was a need for clarification from the government on how the direct cash transfer be treated at the level of the accounts – whether it could be set off against the overdraft in some accounts or not is something where clarity is needed.

Several of the PMJDY account holders have used overdraft facility and banks are keen to first use the cash transfers coming to the accounts for the settlement of earlier dues, they added.

Published on March 27, 2020

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