MNREGA: Banks roped in to bring transparency in wage payment

Updated - November 17, 2021 04:14 am IST

Published - August 04, 2011 07:12 pm IST - New Delhi

These Jharkhand primitive tribal group are struggling for food security inspite of having MNREGA cards which does not have a single entry during the past two years. A file photo: Manob Chowdhury.

These Jharkhand primitive tribal group are struggling for food security inspite of having MNREGA cards which does not have a single entry during the past two years. A file photo: Manob Chowdhury.

Amid allegation of corruption in MNREGA, the Centre has asked the States to use banks to deliver payments to beneficiaries at their doorstep in order check siphoning off money meant for rural poor by middlemen.

Launching the new initiative, the Rural Development Ministry has said banks which will employ business correspondents to reach the villagers and bio-metric identification will be used to make wage payments.

“For the execution of this task, banks may follow the Bank Correspondents model,” the Ministry said and added that details have already been dispatched to the State governments through an advisory.

Rural Development Minister Jairam Ramesh said, “This is one step forward in a series of initiatives to ensure that hassle free wage payments to job seekers are made within the 15-day time limit from the last day of employment.”

Under the model, the banks shall appoint business correspondents who will be delivering the banking services straight to the door steps of the intended beneficiaries at the village level.

“These correspondents will also be charged with the responsibility to educate the villagers about the new provisions of Schedule II,” a statement issued by the Ministry said.

The State governments have been allowed to pay a fee to banks or business correspondents as a fixed charge per account or a percentage of the transaction value up to Rs. 80 per account per year through which transactions for MGNREGA works has been made during the year, the Ministry said.

“This may be absorbed in the six per cent administrative expenses permissible under MGNREGA,” the Ministry said.

“All State governments have also been advised to identify unserved areas where this model would be required and to roll it out expeditiously,” the Ministry said.

“This follows and enhances the amendment to Schedule II which puts in place a statutory requirement that wage disbursements to workers shall be through institutional accounts in Banks or Post Offices within a time limit of 15 days,” it added.

The States have been asked to submit a monthly progress report to the Ministry, it said, adding the step is part of efforts to bring greater transparency and strengthen the system of payment of wages in Mahatma Gandhi National Rural Employment Guarantee Scheme.

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