Senior bank officials said on Friday that the implementation of the Electronic Benefit Transfer (EBT) scheme, meant for enabling direct payments to beneficiaries of government programmes, is behind schedule in the State.

Addressing the State-Level Bankers' Committee (SLBC), a senior Reserve Bank of India (RBI) official said although 3.5 lakh beneficiaries had been “enrolled” for the EBT scheme in Karnataka, only 26,000 smart cards had been issued. Referring to the plan by banks to increase their reach in unbanked areas, using Business Correspondents, he said: “It is not possible to use this model without completing the rollout of smart cards to beneficiaries.”

The Karnataka government and the Reserve Bank of India had said that the State government would use the smart cards for paying wages and benefits to those working under the Mahatma Gandhi National Rural Employment Guarantee Scheme or other social welfare programmes. The progress in the implementation of the scheme aimed at extending “no frill” banking services to all villages with a population of more than 2,000 drew adverse comments from top bank officials.

A senior RBI official said only 47 per cent of “no frills” account holders in the State had been offered the option of using “a small overdraft of about Rs. 500.” “Even this has been achieved because of the relatively better performance of the Regional Rural Banks and cooperatives, not the commercial banks,” he said.

The RBI officials said the “deadline” for completing the financial inclusion project had been missed thrice. He urged bankers to complete it by the end of May.

Earlier, Basant Seth, Chairman of Syndicate Bank and Convener of the SLBC, said banks should extend services to people living in smaller villages .