CM: Cash transfer scheme implementation poor in State

Chief Minister Siddaramaiah on Saturday expressed concern over poor implementation of Aadhaar-based Direct Benefit Transfer (DBT) system which has been taken up on pilot basis in Mysore, Tumkur and Dharwad districts in the State.

Addressing the 124th State Level Bankers' Committee (SLBC) meeting, he said linking of Aadhaar numbers and bank accounts is not encouraging. Banks are required to speed up the process of integration by ensuring coordination between the Reserve Bank of India (RBI) and Unique Identity Authority of India (UIDAI), he added.

The Centre launched the DBT in January this year in 43 districts of the country, including three in Karnataka. But total number of linkage (of Aadhaar number and bank accounts) is very low. Only about 40,078 linkage has been done covering a total of 1,05,882 beneficiaries in the three districts so far.

Linking or seeding of Aadhaar number with the bank account of a beneficiary is necessary to ensure seamless transfer of cash benefit relating to various government schemes like LPG subsidy, scholarships and pension.

Chief Secretary S V Ranganath said banks do not have a proper database. Details about Banking Correspondents (who act as banks in remote places) is not available. Banks should look into all these problems and speed up the linkage process and try to complete the entire exercise by September 2013, he added.

Low credit to education

Another area of concern raised by Siddaramaiah was reluctance of banks to ensure credit flow to the education sector, especially educational loans. Banks have disbursed Rs 4,263 crore as education loans in 2012-13 in Karnataka, against Rs 11,894 crore in Tamil Nadu, Rs 7,120 crore in Kerala and Rs 5,446 crore in Andhra Pradesh.

The government has been implementing a scheme to provide educational loans to meritorious students pursuing professional courses at 6 per cent interest. “As human capital development is essential factor for sustainable growth, I look forward to speedy implementation of education loan schemes,” the chief minister stated.

RBI Regional Director Uma Shankar said banks have been reluctant to sanction education loans due to the unreliable credit history of parents and inability to trace students after the completion of their studies. Banks write off crores of rupees lent to big industrialists in one go. They should not hesitate to lend Rs 5 lakh for education, she stated.

This apart, Siddaramaiah highlighted the need for increasing credit-deposit ratio (total lending by banks against the total amount of deposits) of the State which is 75 per cent. Whereas the CD ratio of neighbouring Andhra Pradesh is 120 per cent and Tamil Nadu is 117 per cent.

He also urged banks to use Kannada in normal banking transactions in the State. Target for annual priority sector lending for 2013-14 has been fixed at Rs 73,362 crore against Rs 60,559 crore of the last year.