Tag: Direct Benefit Transfer

DBT, no common IFSC for Kerala Bank cause delay, BFSI News, ET BFSI

Banking & Finance

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A combination of two factors, the Centre’s decision to disburse crop insurance claims under direct benefit transfer (DBT) mode and delay in Kerala Bank getting its own IFSC code, are delaying the delivery of insurance claims of about 20,000 farmers across the state.

About Rs 21 crore to be disbursed to farmers as insurance claims for 2019-20 was returned by the insurance company as the farmers were unable to submit their account numbers and matching IFSC codes. Claims of Rs 70 crore are pending for 2020-21.

The farmers were getting compensation for crop loss due to adverse weather or other factors under Pradhan Mantri Fasal Bima Yojna (PMFBY). Most farmers (60-80%) have their accounts in primary agriculture cooperative societies (PACS). Earlier, the farmers were made to open mirror accounts in district cooperative banks (DCBs), and agriculture insurance company (AIC) of India was allocating the lumpsum amount of the total claims from a district to the DCB there. The DCB would then transfer the claim amount to the farmers through the mirror accounts. The DCBs were then giving utilisation certificates to AIC .

However, with Centre’s decision to enforce DBT, indirect transfer of insurance claim amounts became impossible. While trying to upload the claims in the DBT portal, the farmers submitted their account number in PACS and the district cooperative bank’s IFSC code. However, their claims bounced as these two data did not match. The compensation to farmers has not been disbursed for the last two years, said K K Kochumuhammed, president of Kole Karshaka Sangam.

Besides, Kerala Bank, formed by merging 13 DCBs, was yet to get a common IFSC code. “Once our software integration is over we will get a common IFSC code. We have requested AIC to retain the earlier practice till then, and clear the pending claims,” said Anita Abraham, DGM, Kerala Bank.

“We had a video conference on Thursday with Union agriculture ministry officials, and requested them to defer DBT implementation till the amalgamation process of DBCs and Kerala Bank are completed, and they have responded positively,” said George Alexander, additional director of agricultural department.



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Modi rolls out digital payment solution e-RUPI

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e-RUPI, a cashless and contactless instrument for digital payment developed by the National Payment Corporation of India (NPCI), Health Ministry, National Health Authority and Department of Financial Services was launched by Prime Minister Narendra Modi on Monday.

How does it work

This one-time payment mechanism allows users to redeem the voucher without a card or any digital payment app or internet banking. Based on the Unified Payment System, the Reserve Bank of India-approved e-RUPI is an e-voucher issued to the beneficiary through SMS or QR code on his or her mobile number. With the help of this, the service provider gets the payment directly into his account. Any government agency or corporate can generate e-RUPI through their partner banks.

DBT schemes

Speaking at the launch of this digital tool, Modi said the e-RUPI voucher will play a big role in making direct benefit transfer more effective. Modi said with time its utility will also change. For instance, the e-RUPI will be helpful to give treatment, say for TB, or provide food for the needy. It is not only person-specific, but also purpose-specific.

“Any person who is desirous of giving vaccination to poor people in private hospitals can do so with the help of eRUPI. eRUPI will ensure that the e-voucher is used for the purpose of vaccination only and for any other work,” Modi said.

“It can also be used for delivering services under schemes meant for providing drugs and nutritional support under Mother and Child welfare schemes, TB eradication programmes, drugs & diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertiliser subsidies, etc. Even the private sector can leverage these digital vouchers as part of their employee welfare and corporate social responsibility programmes,” the official release said.

e-RUPI connects the sponsors of the services with the beneficiaries and service providers in a digital manner without any physical interface. It also ensures that the payment to the service provider is made only after the transaction is completed. Being pre-paid in nature, it assures timely payment to the service provider without involvement of any intermediary, it added.

RS Sharma, Chief Executive Officer of the National Health Authority, said, “e-RUPI can be used in the areas of Health, Agriculture, nutrition and education. It will also be used in India’s National Digital Mission. We are fortunate to be the first user of this tool in the health ministry.”

TV Narendran, President, CII, while endorsing the tool, said that “the voucher system will enable all beneficiaries, including feature phone-users, to benefit through this mechanism. It will also be an excellent tool for the corporates, through which they can extend employee and community welfare schemes”.

According to Uday Shankar, President, FICCI, “The e-RUPI system will not only ensure that there are no leakages in the delivery of government services but also offer a much-needed ease and convenience to the people who are the recipient of such services. This can be a revolutionary concept and alter the paradigm of governance…FICCI will also encourage its members to consider using this platform for offering benefits to their employees and other stakeholders.”

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From August 1, get your pay on bank holidays, too

Banking & Finance

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Starting August 1, you will be able to get your salaries and pensions credited over the weekend, too, with the National Automated Clearing House (NACH) becoming available on all days of the week.

RBI Governor Shaktikanta Das announced the move on Friday. “In order to further enhance customer convenience, and to leverage the 24×7 availability of RTGS, NACH which is currently available on bank working days, is proposed to be made available on all days of the week effective from August 1, 2021,” he said.

NACH is a bulk payment system operated by the NPCI and facilitates one-to-many credit transfers. Over 40.6 crore transactions (credits and debits) were presented on the NACH platform in May.

Digital drive

Amidst the rising adoption of digital payments, the move is set to benefit customers. Apart from getting salaries and pensions over weekends, customers will also be able to make payments such as EMIs and SIPs over the weekend.

Das noted that NACH has emerged a prominent mode of direct benefit transfer (DBT) to a large number of beneficiaries and has helped transfer of government subsidies on time.

At present, it is available on days banks work and auto debit transactions are not processed on holidays.

Vishwas Patel, Chairman, Payments Council of India, said it will speed up payments. “As IMPS, NEFT and RTGS are moving into real-time payments, NACH being available on all days will help employees get salaries on time, faster and even on weekends,” he said.

Jithesh PV, Vice-President and Head, Digital Banking, Federal Bank, said: “More partners such as NBFCs and products like bill payments may move to NACH as it is now available on all days making it a more convenient platform.”

“Availability of NACH on all days will further the financial inclusion objectives through DBT,” said SS Mallikarjuna Rao, MD and CEO, Punjab National Bank.

Also read: Non-banking finance cos seek easier rules for cancelling NACH mandates

 

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