With almost Rs. 5,000 crore in its kitty to spend on banking agents, the UPA government plans to unleash competition among the banks to ensure the ambitious Direct Benefits Transfer (DBT) scheme’s success.
As a lack of banking facilities — coupled with low enrollment of Aadhaar — emerged as a major stumbling block, the government is considering the option of allowing any individual to take up the job of a banking correspondent (BC).
The plan to allow multiple BCs to operate in the same area was accepted after rural development minister Jairam Ramesh wrote to PM Manmohan Singh. Ramesh said that the hurdles in smooth DBT rollout can be eased “with appointment of multiple BCs in an open, inter-operable, competitive framework.”
Meanwhile, to ensure transparency in the scheme, it was proposed that withdrawal of subsidies be done only through biometric authentication of beneficiaries. In another letter to finance minister Chidambaram, Ramesh emphasised that biometrics should be made operable on multiple microATMs “so that if one BC outlet does not provide good service, the customer can go to another.”
To overcome the shortage, Centre may appoint Anganwadi workers, members of self-help groups or companies as BCs. The Centre also plans to make each credit transaction automatically notified with the local authorities.