Odisha: Direct benefit transfer loses sheen as 62 per cent villages lack banks

BHUBANESWAR: The viral video of 70-year-old Surya Harijan from Nabarangpur district walking barefoot to collect her pension from a bank has once again brought to fore the struggle of thousands of beneficiaries of welfare schemes managed through direct benefit transfer (DBT).

Though DBT was introduced to ensure a simpler and faster flow of funds and accurate targeting of beneficiaries, de-duplication and reduction of fraud, many in Odisha are victims of the facility as 62 per cent of panchayats in the state are yet to have banks. Official sources said, of the total 6,798 panchayats, 4,164 do not have brick-and-mortar branches. Although 4,160 panchayats have business correspondents (BCs) and customer service points (CSPs), they hardly solve the purpose at the time of need. This apart, four panchayats do not have any banking touch point.

The number of BCs has also decreased by 18,638 over the last quarter after Yes Bank reconciled around 50 per cent of its BCs due to a ‘reporting error’.People in most of the villages struggle to get financial services due to a lack of banking, ATM and internet facilities.

Odisha has 13 bank branches and 16 ATMs per one lakh population against the national average of 18 and 22. While 80 per cent of the population resides in rural areas, most of the banking institutions are urban-centric. The state is among the bottom 10 in terms of financial inclusion. Despite regular reviews and demands from the state government, banking institutions are yet to come up with strategies to cover all unbanked panchayats.

The panchayats covered with alternative banking outlets instead of brick-and-mortar branches are deprived of real banking services since the account holders alleged they are at the mercy of banking correspondents, CSPs or the persons in charge of the outlets. “I have not received my old-age pension for the last three months as the bank person, who comes to our panchayat says my fingerprint does not match. Since I am unable to go to the bank branch to get it done, I have been deprived of my pension,” rued Mahendra Behera of Basudevpur area.

The Finance department had identified 270 panchayats in consultation with other stakeholders and the State Level Bankers’ Committee (SLBC). Despite making allotments of panchayat locations to banks for the opening of brick-and-mortar branches by March 31, only six branches have been opened so far.

Principal Secretary, of Finance Department Vishal Kumar Dev said the state government has taken up the matter with the Department of Financial Services (DFS) at the centre several times to come up with a strategy for the opening of brick-and-mortar branches in all panchayats. “The state has also made space available at unbanked panchayats free of cost for five years and RBI has mandated the opening of one-man branches to encourage banks to open branches. But the response from the banks has been lukewarm,” he added.