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The issue of how to speed up the seeding of Aadhaar numbers with the bank accounts of citizens eligible for subsidies has come up again, this time in the wake of the transfer of benefits on cooking gas.
Some wonder if it is the size of the transfer fee which is holding banks back from boosting this seeding. And, whether to double the transfer fee to two%, from the present 1%. At the current rate the ministry is expecting to complete almost one million LPG subsidy transactions through DBT by the end of June, involving a transfer of over Rs 40 crore.
Last Saturday saw the launch of the Direct Benefits Transfer (DBT) programme for cooking gas (LPG or liquefied petroleum gas).
According to the petroleum and natural gas ministry, under the scheme, launched in 18 districts, over one lakh LPG consumers who have booked cylinders have received the advance in the first three working days of June. Till June 4, 1.145 lakh DBT transactions amounting to Rs.4.95 crores were transacted.
Almost 30 thousand DBT transactions are being executed every day. The failure rates are below 0.5%.
Yet, the fact is that the seeding level of Aadhaar numbers with bank accounts is just over 20%, while the seeding of the LPG data base with Aadhar numbers is slightly above 58%. And, Aadhaar penetration in these districts is around 90%. Quite a few believe there is a real problem related to the banks and this needs to be addressed without delay.
“Banks are asking for a higher fee, considering a lot of labour is involved in seeding of accounts. People don’t come to banks voluntarily for seeding their Aadhaar numbers. Perhaps the LPG subsidy will be a game-changer,” said a bank executive, who did not wish to be identified.
C V R Rajendran, executive director, Bank of Maharashtra, said the transaction fee is not the issue at the moment. The biggest problem is that people who have got Aadhaar numbers are not coming forward for seeding with bank accounts.
“About 50% of accounts in our bank are not seeded…The fee structure might need to be revised later, if most accounts are no-frills,” he added.
Last month, the government had decided to pay a commission of one% to banks on the total amount transferred under DBT. The fee is paid to compensate the Banking Correspondents (BCs) who would help implement the scheme. It would be paid only till the time the necessary software tools to distinguish transactions completed through normal banking channels and BCs are in place.
The finance ministry said the commission would be paid subject to the condition that after the next six months, banks would examine if 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 was less than what was transferred under DBT, the commission would be reduced proportionately.
Once, the technology is in place to assess the value of transactions done by BCs, a commission at 2% of the amount actually transferred through BCs under the DBT scheme would be given. The introduction of DBT in 2 districts – Mysore in Karnataka and Mandi in Himachal Pradesh — was postponed due to elections.
The system put in place is that all LPG consumers with Aadhaar numbers and whose bank accounts are seeded with Aadhaar numbers would be given an advance amount of Rs 435 per cylinder booked, immediately on booking a cylinder.
Direct Benefit on LPG
| Launched in 18 districts on June 1 |
| Customers would be given an advance of Rs 435 per cylinder, inmmediately on booking |
| Till June 4, 1.145 lakh DBT transactions amounting to Rs 4.95 crores were transacted |
| Ministry targets to have one million LPG subsidy transactions through DBT in June, involving a transfer of over Rs 40 crore |
