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Experience sharing on NREGA payment, Financial Inclusion through CSCs in Jharkhand by Shri Ajoy Kumar Singh, Commissioner, MNREGA, Jharkhand


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Govt of India had launched the Common Service Center (CSC) Scheme for providing sustainable digital access to rural communities & for giving the necessary impetus for knowledge empowerment of the rural community. The CSC Scheme, a strategic cornerstone of the National e-Governance Plan (NeGP), is approved by the Government, as part of its commitment in the National Common Minimum Programme to introduce e-governance on a massive scale.

In light of the importance of the Scheme, Department of Information technology, Ministry of Communications and Information Technology organized a CSC Seminar on ‘Enabling Service Delivery: Bridging The Digital Gap’ at Vigyan Bhawan on July 16, 2011 to brainstorm with all the stakeholders in the Scheme – State Designated Agencies, Service Center Agencies, Village Level Entrepreneurs, Banks & the State/Central Governments and national level service providers.

The panel discussions primarily focused on the following topics…

Session I: Accelerate Delivery of Bharat Nirman Services, Financial Inclusion and Skill Development through the CSC Platform

Session II: Access to Health & Education through Remote Service Delivery & Management by Mainstream Government Departments & Institutions

Session III: Infrastructure Framework for CSC and Innovative Services

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Experience sharing on NREGA payment, Financial Inclusion through CSCs in Jharkhand by Shri Ajoy Kumar Singh, Commissioner, MNREGA, Jharkhand

  1. 1. Financial Inclusion and MGNREGA payment initiative in Jharkhand Ajoy Kr. Singh , Secretary Sports & MGNREGA Commissioner
  2. 2. Presentation Format <ul><li>Introduction </li></ul><ul><li>Financial Inclusion </li></ul><ul><li>Panchayat Bank: CSC Model </li></ul><ul><li>Opportunities/Challenges </li></ul>
  3. 3. 1. Introduction <ul><li>MGNREGA: </li></ul><ul><ul><li>100 days of guaranteed employment to registered HH. </li></ul></ul><ul><ul><li>Job within 15 days of filing application. </li></ul></ul><ul><ul><li>Unemployment allowance if job not provided within time. </li></ul></ul><ul><ul><li>Payment within 15 days of job. </li></ul></ul><ul><ul><li>Payment through Bank/Post office. </li></ul></ul><ul><li>Population 3 crores (approx.) </li></ul><ul><li>villages 36,000, Panchayats 4423 </li></ul><ul><li>Bank branches only 1500 </li></ul><ul><ul><li>One branch for 20,000 people, mostly rural (on Avg.) </li></ul></ul><ul><li>MGNREGA accounts : 30 lakh beneficiaries; 75% accounts with Post offices. </li></ul><ul><li>Complex and time taking Wage payment </li></ul>
  4. 4. <ul><li>12 Blocks Selected for total FI in Pilot mode for UIDAI Project </li></ul><ul><li>One block one bank approach adopted for total FI. . </li></ul><ul><li>Scheme extended to entire state </li></ul><ul><li>EOI was floated in consultation with RBI. </li></ul><ul><li>Excellent response from banks. </li></ul><ul><li>All 259 blocks already allocated to 9 different banks. </li></ul><ul><li>Alignment of FI and Enrolment process </li></ul><ul><li>2% transaction fee to be given only in pilot Blocks. </li></ul>2. Financial Inclusion
  5. 5. <ul><li>Conditions imposed on Banks : </li></ul><ul><ul><li>For 100% FI for cash transfer under MGNREGA as well as other social sector programs such as old age pension, etc. </li></ul></ul><ul><ul><li>Banks to open Aadhaar enabled or otherwise Bank Accounts. </li></ul></ul><ul><ul><li>Condition to establish Panchayat banks either through CSC or any other BC </li></ul></ul><ul><li>All account of Blocks/Panchayats and beneficiaries in a Block will be with one Bank. </li></ul><ul><ul><li>No financial instruments </li></ul></ul><ul><ul><li>No transaction time </li></ul></ul><ul><ul><li>No fund/cash transfer from one bank to other Bank/PO </li></ul></ul>
  6. 6. Financial Inclusion <ul><li>Number of Enrolments: 23,34,715 </li></ul><ul><li>Number of Aadhaars: 8.12 Lakhs </li></ul><ul><li>Number of Accounts opened: 8,05,000 </li></ul><ul><li>Plan to include approximately 1 crore of bank accounts by the end of this Financial Year </li></ul>
  7. 7. Financial Inclusion : Progress <ul><li>Banks directly or </li></ul><ul><li>through BC </li></ul><ul><li>Based only on Aadhaar </li></ul><ul><li>FI through CSC </li></ul>Sl. 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
  8. 8. Flow Diagram for Opening of Aadhaar enabled bank Accounts for MGNREGA and BPL beneficiaries
  9. 9. Financial Inclusion through CSC <ul><li>Agreement executed between SBI and SCAs (UTL and AID) for 18 out of 24 districts. </li></ul><ul><li>Execution of agreements between other banks and SCA in progress </li></ul><ul><li>FI in online mode from Panchayat Bank </li></ul><ul><ul><li>Total Accounts opened is 4962 </li></ul></ul><ul><ul><li>Total Accounts Pending – 588 </li></ul></ul><ul><ul><li>Total Accounts Active – 4374 </li></ul></ul>
  10. 10. 3. Panchayat Bank : CSC Model <ul><li>Need to have increase in the number of banking outlet close to beneficiary. </li></ul><ul><li>Banking outlet at the Panchayat level (Panchayat Bank) either through CSC or any other agency as BC of the Bank. </li></ul><ul><li>Approx. 4500 Panchayat Banks in entire State. </li></ul><ul><li>Pilot Panchayat Banks working in approx 50 Panchayats </li></ul><ul><li>UTL using SBI Kiosk Software of bank </li></ul><ul><li>Total Amount distributed to MGNREGA beneficiaries – Rs. 15,01,452 </li></ul>
  11. 11. Biometric Authentication based payment <ul><li>STEPS: </li></ul><ul><ul><li>Authentication of VLEs </li></ul></ul><ul><ul><li>Login by VLE </li></ul></ul><ul><ul><li>Biometric authentication of </li></ul></ul><ul><ul><li>beneficiary </li></ul></ul><ul><ul><li>Login of Beneficiary’s Account </li></ul></ul><ul><ul><li>Transaction </li></ul></ul><ul><ul><li>Biometric authentication of </li></ul></ul><ul><ul><li>beneficiary </li></ul></ul><ul><ul><li>Closure of account </li></ul></ul><ul><ul><li>Print out of receipt </li></ul></ul>
  12. 13. Biometric Authentication based Payment Model Only stage of physical cash movement BANK SERVER CIDR SERVER (UIDAI) Auth. Request With Biometrics Response
  13. 14. Transition to Aadhaar enabled payments <ul><ul><li>- Change in agreement of BC and Bank </li></ul></ul><ul><ul><li>Change in Software of Panchayat Bank </li></ul></ul><ul><ul><li>Transfer of cash on the basis of Aadhaar </li></ul></ul><ul><ul><li>Authentication from UID server </li></ul></ul>
  14. 15. 4. Opportunities <ul><li>Shifting of CSC in Panchayat building ensures visibility </li></ul><ul><li>Better coordination with government offices </li></ul><ul><li>Advantage of Space and Power to CSC </li></ul><ul><li>Banking services in each panchayat </li></ul><ul><li>All services under one roof </li></ul><ul><li>Other financial services/MGNREGA entry of data in MIS portal </li></ul><ul><li>Supplementary income to CSC </li></ul><ul><li>A viable business model. </li></ul>
  15. 16. Challenges <ul><li>Connectivity at Panchayat level : VSAT </li></ul><ul><li>Availability of Power : Solar Power </li></ul><ul><li>SCA’s </li></ul><ul><ul><li>Lack of expertise </li></ul></ul><ul><ul><li>Lack of availability of Software </li></ul></ul><ul><ul><li>Capacity constraints </li></ul></ul><ul><li>Training of VLEs </li></ul><ul><li>Execution of agreement between Banks and SCA </li></ul><ul><li>To confirm to Aadhaar enabled banking transactions (interoperability) </li></ul>
  16. 17. Thank you!