3 min readNew DelhiAug 4, 2012 01:41 AM IST
First published on: Aug 4, 2012 at 01:41 AM IST
The urban poor are finally set to get an identity as the Union finance ministry has directed all banks to open at least one bank account for every family in urban areas living below poverty line in urban areas.
This directive is being given in order to include them for direct transfer of cash subsidies.
Accordingly,the finance ministry has also instructed banks to capture biometric information for all such account holders.
Pointing out that the government has been trying to directly transfer all benefits including Mahatma Gandhi National Rural Employment Guarantee Act MGNREGA wages and various cash subsidies to beneficiaries into bank accounts,the department of financial services has said,Beneficiaries are not only inhabitants of rural villages but also comprises of urban poor and slum dwellers residing in the urban or metro centres.
The move,which will also achieve the goal of financial inclusion,was launched for the rural poor in May this year,when the department had directed banks to open at least one bank account for every family living in financial inclusion villages.
To provide banking services to entire population residing in urban and metro centres,so as to financially include the urban poor,slum dwellers and the inhabitants of urban / metro villages and facilitate electronic benefit transfer in respect of benefits and subsidies under various government schemes directly into their accounts,it has been decided to ensure one bank account per family, the DFS has written in the letter to state-level banking committees.
Urging banks to launch a campaign for Urban Financial Inclusion,the finance ministry has said that the responsibility of enrolling families would lie on the bank branch in every ward or circle of a municipal corporation.
In case there is no bank branch in a particular ward or circle,the responsibility would be given to the neighbouring bank branch.
Keen to cut down leakage of subsidies and cap the total subsidy burden at 2 per cent of the GDP,the finance ministry has in recent months undertaken pilot studies for direct transfer of fertiliser,kerosene and LPG subsidies.
In order to better target subsidies,former finance minister Pranab Mukherjee had in the Union Budget 2012-13,also announced that the Aadhar platform would be used to support the payments made under MGNREGA,old age,widow and disability pensions; and scholarships directly to the beneficiary accounts in selected areas.
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