You could call it an election year double bill. The UPA government is set to create hundreds of thousands of jobs in rural areas, and in the process also fulfill its plan for financial inclusion that takes banking to the unbanked. And mobile ATMs are set to buzz around rural India.
The UPA's ambitious direct benefit transfer scheme is the vehicle through which this is set to take place this year. About 500,000 to 600,000 banking correspondents are set to be appointed in the next three to four months to expand the government's flagship programme and help in removing bottlenecks in carrying out the direct cash benefit project.
More than 150,000 of them have already been appointed by government-run banks in the last couple of months.
"The idea is that every household in the country should have access to banking services and their savings should be channelised into the organised banking network," Rajiv Takru, secretary, financial services told HT. Public sector banks have also been directed to open no-frill accounts for those outside the ambit of banking services.
Government sources said authorities are keeping a close watch on the progress of the direct cash benefit scheme under which salaries under anti-povety programmes and subsidies on cooking gas are directly transferred to end-use beneficiaries.
The government has also decided to provide all banking correspondents with mobile automatic teller machines (ATMs) which can even accept deposits, besides allowing users to withdraw cash. Apart from qualified individuals such as insurance agents, teachers and doctors, non-governmental organisations, self-help groups and co-operative societies can also act as banking correspondents to do basic banking functions for those in remote areas.
Banking correspondents could earn over R5,000 a month for their services. "The implementation issues of the direct cash benefit programme must be addressed at the earliest to ensure that the benefits reach the beneficiaries," said DK Joshi, chief economist, Crisil.
Mobile banking in farflung areas could well help the UPA nurture vote banks in the rural areas in the backdrop of a high fiscal deficit and current account deficit putting pressures on the economy.