A group of banks including the State Bank of India (SBI) and the State Bank of Hyderabad (SBH) have come forward to implement electronic benefit transfer (EBT) system as part of the smart card-based payment project across Karnataka which enables payment of social security benefits and wages under National Rural Employment Guarantee Scheme (NREGS) to rural workers.
According to V K Nagar, executive director, Syndicate Bank and chairman of State Level Bankers’ Committee (SLBC), the banks have agreed to implement EBT system following the guidelines issued by Reserve Bank of India (RBI). RBI, based on the recommendations of a High Power Committee, had recently proposed an incentive scheme to quicken the pace of adoption of the smart card based EBT mechanism by banks for routing the payment of social security benefits, wages under NREGS and payments in other government schemes, he said. Addressing members of SLBC, here today, he said the scheme envisages that banks would be reimbursed Rs 50 per account for opening accounts with bio-metric access for routing the payments.
However, the implementation of the system is subject to state government’s agreeing to pay to the transacting banks, the transaction fee, which will be mutually arrived by the state government and the banks functioning in the state.
Nagar said “Nine banks headquartered in Karnataka, SBI and SBH, considered the EBT concept and agreed to implement it in the entire state proposed by RBI as per One District Many Banks model by adopting service area approach under the Lead Bank Scheme. In that case an amendment may be incorporated in the MoU executed between the government of Karnataka and three lead banks for pilot project, keeping in view decision of the state government in the matter.” Already, a pilot project on smart card based payment system is being implemented in Bellary district covering social security pension beneficiaries and wage earners under NREGS.
The project implementation has been completed covering 40 village panchayats in Bellary Taluk (Rural) and payments are being made through these cards, he said.
Karnataka is one of the larger states in the country to have achieved 100 per cent financial inclusion. Reserve Bank of India had taken up an evaluation study of the 100 per cent financial inclusion programme in seven districts in Karnataka through NABARD consultancy services and the findings have been communicated to all banks by RBI, he informed.
Reviewing the performance of banks in providing the required financial support to priority sector, Nagar said that the banks have disbursed Rs 17,972 crore during the third quarter ended December 2008 against annual outlay of
Rs 23,726 crore, reaching 76 per cent of the target for 2008-09. Under primary sector, banks have disbursed Rs 13,311 crore, thereby attaining 76 per cent of the target during the year up to December 2008.
He said that disbursement under secondary and tertiary sector was at the order of Rs 2,267 crore and Rs 4,394 crore, achieving 105 per cent and 65 per cent of the target respectively. The aggregate deposits of banks during the third quarter stood at Rs 189,236 crore and advances was Rs 145,922 crore with Credit Deposit Ratio of 77.11 per cent.
He said that advances to priority sectors was at the order of Rs 61,602 crore constituting 42.24 per cent of the total advances, thereby surpassing the stipulated norm of 40 per cent.
Similarly, the advances to agriculture sector was Rs 26,633 crore accounting for 18.25 per cent, which is above the norm of 18 per cent, he added.
