Haryana suspends giving old age pension through public sector banks

The Haryana government has suspended a scheme of distribution of old age pension though public-sector banks till their infrastructure gathered a certain stability in the state’s rural areas.

Currently, the government is disbursing pension through municipal bodies, panchayats and patwaris in the absence of an arrangement with banks. A sum of around Rs 130 crore is disbursed every month as old age pension to 20 lakh beneficiaries in the state. A senior government official said on Friday that the banks were not able to scale up their operation in the state. The disbursement, he said, was to be done to the beneficiaries through the business correspondent model deployed by the banks. For that, though, the public-sector banks that are entrusted the job have yet to have proper infrastructure, thus showing the requirement of “a number of business correspondents” he told Business Standard.

“We were expecting 20 lakh transactions per month, but the banks were able to do only 3 lakh transactions per month. So, we have suspended the disbursement of pension by the banks till they set up the required infrastructure,” he revealed. “Further, we have instructed the banks that have scaled up their operation or want to meet the required infrastructure. They have to submit application to us. Their request can be taken into consideration.”

Haryana has 1,838 unbanked villages, each having a population of over 2,000 in the state. Such people have been allocated amongst the banks on the basis of service area approach. Banking services to 1,694 such identified villages have been provided by various banks up to January this year. The remaining 144 villages are likely to be brough under the state’s banking ambit by March-end. Recently, the issue was discussed at a state-level banker’s committee (SLBC) meet. SLBC chairperson Usha Ananthsubramanian, who is executive director of Punjab National Bank, said the body to review lead bank schemes would be formed under the chairmanship of RBI depty governor Usha Thorat. “Banks are in the process of implementing the financial inclusion plan to provide banking outlets/services in the unbanked villages having population of over 2000.”

The Reserve Bank of India and the union government are working closely to make banks push the agenda on inclusive growth both in number and spirit. Anathasubramaian urged the member-banks to cover the remaining villages “well before” next month.

 

 

 

To facilitate the the banks in achieving the target of financial inclusion, she also referred to the directions of the department of financial services under the union financial ministry of finance that all the banks must help the government in its mission to finction a brick-and-mortar branch.

 

This applies to villages with a population of above 5,000 in under-banked districts and more than 10000 in other districts. In the case of districts, where the opening of the conventional brick-and-mortar branch is not viable, the bank may set up ultra small branches. Ananthasubramian requested lead district managers of the banks to prepare a plan of all unbanked villages with a population less than 1,000 in the state.