FinMin asks banks to get ready for 2nd phase of DBT scheme

Says banks should put in place robust automated systems to ensure that the beneficiaries list does not undergo any change

With government set to launch the second phase of Direct Benefit Transfer (DBT) scheme, Finance Ministry has asked PSU banks to put in place robust automated systems to ensure that the beneficiaries list does not undergo any changes.

"All banks...Need to have robust automated systems to ensure that there is no possibility of altering the original list of beneficiaries generated by the user department," the Department of Financial Services (DFS) circular to heads of public sector banks said.

It further said banks also need to ensure that a secure 'server to server' connectivity is operationalised with the National Payments Corporation of India (NPCI) which will automatic download and execution of payment advise file and generate the return of file indicating status of transaction, among other things.

NPCI, an umbrella organisation for all retail payment systems, is conducting a pilot run with five banks for establishing secure server to server connectivity and is scheduled to be completed in this month.

The DFS further said banks also need operationalise connectivity with NPCI.

"Based on the work done by NPCI in the pilot...All banks must operationalise this by May, 2013," it added.

The second phase of ambitious DBT scheme is scheduled to operational from July 1 in the select districts spread across 19 states and two union territories. In first phase that started from January 1, 43 districts were identified for DBT transfer of 26 government schemes.

Banks would be required to strengthen the banking infrastructure, particularly in the areas so far not covered by the banking services.

Earlier, the Ministry had asked the banks to undertake focussed programme for issuance of debit cards, particularly to the beneficiaries under the various schemes, so that they are able to draw the benefit as per their convenience.

Banks have to seed Aadhaar Number into the bank account of the beneficiaries based on the details received from the district administration or concerned department.