Financial Inclusion and MGNREGA Financial Inclusion and MGNREGA payment initiative in Jharkhandpayment initiative in Jharkhand

Ajoy Kr. Singh,Secretary Sports & MGNREGA Commissioner

Presentation FormatPresentation Format

1. Introduction2. Financial Inclusion 3. Panchayat Bank: CSC Model4. Opportunities/Challenges

MGNREGA:•100 days of guaranteed employment to registered HH.•Job within 15 days of filing application.•Unemployment allowance if job not provided within time.•Payment within 15 days of job.•Payment through Bank/Post office.

Population 3 crores (approx.) villages 36,000, Panchayats 4423 Bank branches only 1500

One branch for 20,000 people, mostly rural (on Avg.) MGNREGA accounts : 30 lakh beneficiaries; 75% accounts with Post offices. Complex and time taking Wage payment

1. Introduction1. Introduction

12 Blocks Selected for total FI in Pilot mode for UIDAI Project One block one bank approach adopted for total FI. . Scheme extended to entire state• EOI was floated in consultation with RBI.• Excellent response from banks.• All 259 blocks already allocated to 9 different banks. Alignment of FI and Enrolment process 2% transaction fee to be given only in pilot Blocks.

2. Financial Inclusion2. Financial Inclusion

• Conditions imposed on BanksConditions imposed on Banks::– For 100% FI for cash transfer under MGNREGA as well as other social

sector programs such as old age pension, etc.– Banks to open Aadhaar enabled or otherwise Bank Accounts.– Condition to establish Panchayat banks either through CSC or any

other BC

• All account of Blocks/Panchayats and beneficiaries in a Block will be with one Bank.– No financial instruments– No transaction time– No fund/cash transfer from one bank to other Bank/PO

Financial InclusionFinancial Inclusion

• Number of Enrolments: 23,34,715• Number of Aadhaars: 8.12 Lakhs• Number of Accounts opened:

8,05,000• Plan to include approximately 1

crore of bank accounts by the end of this Financial Year

Financial Inclusion : ProgressFinancial Inclusion : ProgressSl. No.

Bank No. of Block

Number of Accounts

1. ICICI Bank 27 147000

2. State Bank of India

105 6200

3. Central Bank of India

5 5100

4. Union Bank of India

19 57000

5. Bank of India 72 166000

6. Allahabad Bank 17 405000

7. AXIS Bank 3 4000

8. Jharkhand Gramin Bank

7 14700

9 United Bank 4 NIL

Total 8 259 8,05,000

a) Banks directly or through BC

b) Based only on Aadhaarc) FI through CSC

Flow Diagram for Opening of Aadhaar enabled bank Flow Diagram for Opening of Aadhaar enabled bank Accounts for MGNREGA and BPL beneficiariesAccounts for MGNREGA and BPL beneficiaries

UIDAI CIDR Enrolment Data Registrar, RDD, GoJ

EID-UID Mapped Data

Enrolment Agency

KYR+ Data submitted to Registrar

NIC NREGA Beneficiaries’ Data

Partner Bank

UID-EID Mapped data to banks, with NREGA and BPL information

Beneficiary

Aadhaar (UID) enabled Bank Account

Inputs from District Administration for BPL Data

Financial Inclusion through CSC Financial Inclusion through CSC

• Agreement executed between SBI and SCAs (UTL and AID) for 18 out of 24 districts.

• Execution of agreements between other banks and SCA in progress

• FI in online mode from Panchayat Bank– Total Accounts opened is 4962– Total Accounts Pending – 588– Total Accounts Active – 4374

3. Panchayat Bank : CSC Model

• Need to have increase in the number of banking outlet close to beneficiary.

• Banking outlet at the Panchayat level (Panchayat Bank) either through CSC or any other agency as BC of the Bank.

• Approx. 4500 Panchayat Banks in entire State.

• Pilot Panchayat Banks working in approx 50 Panchayats

• UTL using SBI Kiosk Software of bank• Total Amount distributed to

MGNREGA beneficiaries – Rs. 15,01,452

Biometric Authentication based paymentBiometric Authentication based payment

• STEPS:– Authentication of VLEs– Login by VLE– Biometric authentication of beneficiary – Login of Beneficiary’s Account– Transaction– Biometric authentication of beneficiary – Closure of account– Print out of receipt

Biometric Authentication based Payment Biometric Authentication based Payment ModelModel

Only stage of physical cash movement

BANK SERVERCIDR SERVER (UIDAI)

Auth. RequestWith Biometrics

Response

Transition to Aadhaar enabled paymentsTransition to Aadhaar enabled payments

- Change in agreement of BC and Bank

– Change in Software of Panchayat Bank

– Transfer of cash on the basis of Aadhaar

– Authentication from UID server

4. Opportunities4. Opportunities

• Shifting of CSC in Panchayat building ensures visibility• Better coordination with government offices • Advantage of Space and Power to CSC• Banking services in each panchayat • All services under one roof• Other financial services/MGNREGA entry of data in

MIS portal• Supplementary income to CSC • A viable business model.

ChallengesChallenges• Connectivity at Panchayat level : VSAT• Availability of Power : Solar Power• SCA’s

– Lack of expertise– Lack of availability of Software– Capacity constraints

• Training of VLEs• Execution of agreement between Banks and SCA• To confirm to Aadhaar enabled banking transactions

(interoperability)

Thank you!Thank you!