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As the Direct Benefits Transfer (DBT) scheme crawls, the government has decided to pay a commission of 1% to banks on the total amount transferred under the scheme.
It is being paid to compensate Banking Correspondents (BCs) who would help implement the scheme.
In an office memorandum today, the Department of Expenditure said the government considered issues related to payment of commission BCs for transactions carried out by them under DBT and decided to pay a flat rate of 1% to banks.
It said a viable BC network and a reasonable recompose to banks are a pre-requisite to successful implementation of the scheme.
The fee, however, would be paid only till the time necessary software tools to distinguish transactions completed through normal banking channels and BCs are in place.
“The commission would be paid subject to the condition that after the next six months, it would be examined by the banks whether the amount transferred through BCs is more than or equal to the amount transferred under DBT. If it is found that the amount transferred through BCs is less than the amount transferred under DBT, the commission would be reduced on a pro-rata basis,” the memo said.
Once, the technology is in place to assess the value of transactions carried out by BCs, commission at 2% of the amount actually transferred through BC under the DBT scheme would be given.
In a separate memo, the Department of Expenditure also asked ministries and departments to strictly follow the payment procedure for all DBT schemes.
“It has come to the notice that the instructions for payment procedure in respect of DBT schemes are not being followed strictly, making it difficult to generate a complete MIS (Management Information System),” said the memorandum.
In its report earlier this year, the Nandan Nilekani’s Task Force on Aadhaar-Enabled Unified Payment Infrastructure had suggested that at the rate of 3.14% the total transaction fee could be Rs 5,000 crore when the scheme is fully implemented.
It, however, added as subsidised goods (fertilizer, LPG, kerosene, and food) would be purchased using electronic payments over time obviating the need for reimbursement of the subsidy, the actual expenditure might be much lower.
