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Now, electronic transfer of grants and subsidies

R. Sairam
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Banking services to be taken to the doorstep of villagers

GRANDOISE PLAN: Such scenes of senior citizens waiting in long winding queues for their pensions could soon be a thing of the past with the Union Finance Ministry calling for electronic transfer of funds to beneficiaries' bank accounts. — FILE PHOTO
GRANDOISE PLAN: Such scenes of senior citizens waiting in long winding queues for their pensions could soon be a thing of the past with the Union Finance Ministry calling for electronic transfer of funds to beneficiaries' bank accounts. — FILE PHOTO

In a major initiative aimed at swift and efficient transfer of money to beneficiaries of various government schemes, the Union Ministry of Finance has advised all banks to directly credit subsidies/grants to their bank account.

Apart from cutting down costs, this strategy is aimed at making the delivery process transparent, banking sources here told The Hindu on Sunday. In a circular, the Ministry had said that subsidies and grants of the 35 Centrally-sponsored schemes should be disbursed through electronic transfers. These include flagship schemes such as Mahatma Gandhi National Rural Employment Guarantee Scheme and assistance given to pregnant women, and widows.

This would also take financial services to the beneficiaries' doorstep as Banking Correspondents (BCs), drawn from the local population, would be appointed at the villages to carry out credit and debit transactions through Smart Cards. They would provide printed receipts for all transactions.

In Madurai, sources say, Collector U. Sagayam has given directions to select a Taluk by January to implement the project on a pilot basis. Similar projects were under way in four taluks in the State.

Old Age pension

In the first phase, bank accounts would be opened for all villagers in the taluk, after which Old Age Pension would be transferred electronically.

Based on its execution and the public's response, the process would be scaled up with the ultimate objective being replicating the method for all State and Central schemes.

While administrative works such as identifying villages, allotting them to banks, appointing business correspondents and establishing the requisite infrastructure had been completed, the official said that only the operational works remained, with potential areas of problems being identified.

The implementation of the project was discussed by the Collector at a meeting on Thursday in which Reserve Bank of India (RBI) Assistant General Manager A.J. George, Lead District Manager KN. Subramanian and other senior officials took part.

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