Mumbai: Banks need to ensure that no user is more than 5 kms away from a banking access point and if such areas are found, these must be considered ‘shadow areas’ and a local vendor be made a banking correspondent (BC) as he deals in money and stays there, said the Nandan Nilekani-led panel on deepening digital payments.
The report said that in the recent expansion of banking access under the Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme, an account was opened for each household in a bank. Since, the post office and cooperative banks were not a part of the scheme at that time, the account was opened at a branch that could be far off even though the individual might have had an account in the post office or the cooperative bank.
“Since the beneficiaries of direct benefit transfer (DBT) spend their money in cash, they withdraw it as soon as it comes into the bank account. It is a common sight in rural branches to see beneficiaries of pension, Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), government to person transfers that have been their entitlement made to sit in a queue for entire day, thereby losing an entire day’s income, to draw from their own accounts," it said.
According to the report, this undignified treatment meted to the beneficiaries, results in them drawing the entire amount at one go and as a result, the relationship between the bankers, and the customers is burdensome to both sides.
“The beneficiary would rather not deal with the indignity and may even use an agent (at their own cost) to withdraw their money. In some states, schemes of the government have insisted on a dedicated account for each scheme. This results in a burden to the banks (as at most one account would be used), and to the users (who must waste multiple days to access their own funds)," it said.
The committee recommended, keeping the user interest in mind, these customers should be given control on the accounts into which DBT funds should flow.
Other issues, the report highlighted, relate to the distance from the banking access point, and high levels of dormancy and attrition in the business correspondent model.
“As a result, the user may access the bank only as a conduit of DBT funds, without accessing other financial products such as deposit, recurring deposits, savings, credit, insurance etc," it said, adding that the District Level Consultative Committee (DLCC) of banks must help the user move their account, so that there is a reasonable access to the account.