Wages of the beneficiaries of government-sponsored schemes in Madhya Pradesh are likely to be stuck in banks from next month. All payments under various schemes including the National Rural Employment Guarantee must be done through banks from October onwards.
The banks are not ready to open accounts of the beneficiaries through the IT-enabled financial inclusion programme, which is running on a pilot basis in various districts of the state.
They have complaints against state government employees in panchayats because they are not co-operating with ‘business correspondents’ and ‘business facilitators’ (people who are not bank staff but work on commission to open no-frills accounts for the poor).
“The panchayat staff do not co-operate with our business correspondents. They do not come forward to endorse the identity of the beneficiaries. How can we open accounts,” asked an official from State Bank of Indore.
State-level bankers committee (SLBC) Chairman K Subbaraman has asked for lists of beneficiaries from the state government. However, state government officials say the list is available online. It is for the bankers to manage and open accounts.
“All payments to beneficiaries under government-sponsored schemes must be through banks. Each branch is likely to cover beneficiaries of at least 25 villages. The bankers have not opened accounts under the IT-enabled financial inclusion programme. How will they manage to make payments for September,” asks Pallavi Jain Gohil, director (institutional finance).
The Reserve Bank of India and the director (institutional finance), MP, have expressed “displeasure” on the slow progress of the pilot project (financial inclusion). State Bank of India and Central Bank of India are yet to start the programme.
The Bank of India has opened 500 accounts, while State Bank of Indore 4,500, under financial inclusion. ICICI Bank and Axis Bank have reached the initial level of the programme.
State Bank of India had in the last SLBC meeting had demanded commission from the state government for opening no-frills accounts for the poor and those who have no access to banks. Under the financial inclusion programme, the Reserve Bank of India had floated two models for public and private banks to provide banking facilities in remote areas.
Under one model, banks are supposed to rope in a person to be called as ‘business correspondent’ while under the second model they have to seek help of ‘business facilitators’ like farmers’ clubs, postal agents, retired teachers, retired postmasters, auto dealers, NGOs, and ex-servicemen.
The idea of this concept was to develop banking habits in ‘no-access’ areas.
“If our business correspondent goes to a labour who is beneficiary under any government scheme like NREG, and opens his account it is possible he may already have an account. In this way the state government officials should come forward to support us to avoid multiple account for the poor,” said Subbaraman.
State Bank of India had planned the financial inclusion programme with India Post but it failed to take off.
“They (India Post) do not have staff and no progress has been reported, however NGOs, farmers club, individuals, and Khadi and Village Industry units have been roped in under business facilitator model,” an SBI official said.
Each business correspondent is required to contact the poor of more than one district and he is paid Rs 10 per account as commission.
In case of business facilitators like NGOs etc, the bank will offer 1% commission on loan, 0.5% on sanctions and 0.5% on disbursement and 0.5% on recovery of loans and 10% on written off accounts.
