This follows delay in banks paying wages to beneficiaries under MNREGA

Owing to delay in payment of wages by banks to beneficiaries under the Mahatma Gandhi National Rural Employment Guarantee Act, the State government has asked all nationalised banks to set up automated teller machines (ATMs) in all gram panchayats (GPs).

T.M. Vijay Bhaskar, Principal Secretary, Rural Development and Panchayat Raj, told The Hindu on Sunday that bank branches were not located at the GP level and beneficiaries ended up spending a day visiting the bank to withdraw cash. There are 5,630 GPs in the State but there are no bank branches in more than 3,000 GPs, he said.

The operation of branchless banking model by various banks through the appointment of business correspondents in villages has delayed payment of wages in unbanked villages.

In 2012–13, the RDPR deposited nearly Rs. 1,600 crore in banks for payment of wages to MNREGA beneficiaries. But business correspondents disbursed only Rs. 70 lakh to beneficiaries residing in unbanked villages.

In the first six months of the current fiscal year, the RDPR spent Rs. 850 crore and deposited Rs. 500 crore in banks for payment of wages to beneficiaries.

Following the poor performance of business correspondents, delay in the payment of wages by banks, and also to reduce travelling time and expenses, the RDPR has asked to conduct mapping of all GPs to set up ATMs.

Sudhir Kumar Jain, chairman of State-level Bankers’ Committee, and Managing Director of SyndicateBank, also suggested that banks explore the option of setting up ATMs in GPs.

Mr. Bhaskar said beneficiaries had been wasting a lot of money and time visiting banks located in towns and cities. “The payment of wages through ATMs will prevent delay and filling of withdrawal and deposit slips as required at banks.”

SyndicateBank officials said there were 23,126 unbanked villages with populations of less than 2,000.

The Reserve Bank of India had issued guidelines to provide banking services in these villages. Against the target of 13,684 villages up to March 2014, banks had provided services to 3,862 villages having populations of less than 2,000.

A total of 1,52,110 households are working under the job scheme as on November 3, 2013. A total of 9,841 households completed 100 days of work. For payment of MNREGA wages, banks have been implementing the Electronic Benefit Transfer (EBT) scheme in seven districts — Bellary, Gulbarga, Chitradurga, Yadgir, Chamarajanagar, Dharwad, and Mandya.

A total of 4,29,767 accounts were opened in these districts.

EBT is a smart card-based project for payment of MNREGA wages and other social security benefits. The State government paid the cost of Rs. 95 per card.

The EBT system can eliminate bogus claimants and help the exchequer save money.

“Nearly 20 per cent of claimants of pension under various social security schemes are bogus,” an official in the RDPR said.

The State government has been paying transaction fee to the banks implementing the EBT scheme.

More In: Karnataka | National