Proceedings of the meeting held under the Chairmanship of Hon'ble Chief Minister,Haryana on 7th December, 2011 (Wednesday) at 04.00 PM in the Main Committee Room,4th Floor, Haryana Civil Secretariat, Chandigarh to review the implementation ofElectronic Benefit Transfer Scheme and its convergence with Financial Inclusion Plan inHaryana,

*****A List of Participants:

Haryana State Government:

1. Shri Bhupinder Singh Hooda, Honble Chief Minister, Haryana - In Chair.2. Smt. Geeta Bhukkal, Hon'ble Social Justice & Empowerment Minister, Haryana.3. Shri Jaiveer Singh, Chief Parliamentary Secretary, Social Justice & Empowerment

Department, Haryana.4. Shri Manik Sonawane, lAS, Financial Commissioner and Principal Secretary to

Government, Haryana, Social Justice & Empowerment Department.5. Shri Ajit M. Sharan, lAS, Financial Commissioner and Principal Secretary to

Government, Haryana, Finance Department.6. Shri Chhatar Singh, IAS. Principal Secretary to Chief Minister, Haryana.7. Shri M.S.Chopra, Principal OSD to Chief Minister, Haryana.8. Shri K.K. Khandelwal, lAS, Additional Principal Secretary to Chief Minister, Haryana.9. Dr. Ashok Khemka, lAS, Director General, Social Justice & Empowerment, Haryana.10. Shri R.S.Doon, lAS, Deputy Principal Secretary to Chief Minister, Haryana.11. Shri G.S. Bansal, State Informatics Officer, National Informatics Center- Haryana State

Unit with two team members.

Finance Ministry, Government of India: NIL

Reserve Bank of India:1. Shri Amar Nath, General Manager (Officer-in-charge), Reserve Bank of India,

Chandigarh along with two team members

Banks:1. Ms Usha Subramanian, Executive Director, Punjab National Bank, Head Office, New

Delhi along with three team members.

2. Shri S.C.Sinha, Executive Director, Oriental Bank of Commerce, Harsha Bhawan, E-Block, Cannaught Place, New Delhi along with three team members.

3. Shri S.S.Ghugre, General Manager - Financial Inclusion, Union Bank of India, UnionBank Bhavan, Mumbai along with two team members.

4. Shri Nilanjan Majumdar, Vice President & Head-FIG, AXIS Bank, Mumbai along withtwo team members.

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5. Shri Avijit Saha, Country Head-Financial Inclusion, ICICI Bank, Mumbai along withone team member.

6. Shri N.K.Chari, Chief General Manager, State Bank ofIndia, Chandigarh.

7. Shri Rajender Sehgal - Group Head-FIG, Govt. Business, PSUs & Micro Finance &MD's representative (North India), HDFC Bank House, Gurgaon along with two teammembers.

8. Shri K. Rama Murthy, General Manager - Financial Inclusion, Head Office,Corporation Bank, Bangalore along with two team members.

9. Shri Hari Lal, Deputy General Manager, Central Bank of India, Central Office, Mumbaialong with two team members.

Technical Service Provider/ Business Correspondent:

1. Shri Manish Khera, Chief Executive Officer, Mis Financial Information Network &Operations Limited, Mumbai along with five team members.

****1. Brief Summary:

The Director General while welcoming the Hon'ble Chief Minister and the

representatives from banks briefed about the direct credit of benefits under all social security

schemes of the Social Justice & Empowerment Department into the bank accounts of the

beneficiaries under the Electronic Benefit Transfer Scheme to ensure that the benefit reaches

the intended target without any time lag and minimizing misappropriation. The no-frills savings

account offered by banks under the Financial Inclusion Scheme using the Business

Correspondent model is being leveraged to remit the benefit electronically into the bank

account of the beneficiary. The implementation of the Scheme had commenced from the month

of April, 2011. Evidently, the State Government expected that the beneficiary would be able to

operate his bank account at the Customer Service Point established for the village at par with

other bank customers. Presently, more than 19 lakh bank accounts have been created and the

scheme is operational in all the districts of the State, except Gurgaon and part of Rohtak

district. Currently, of the 19 lakh bank accounts created, 18 lakh accounts are in active use. The

document containing the implementation guidelines titled, "Service Level Performance

Standards For Electronic Benefit Transfer through Banks" is in place and its second amended

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version was released In the month of August, 2011 which IS available at

http://www.socialjusticehry.nic.in/SLP.pdf.

2. The Issues:

i) The implementation at the ground level by the Business Correspondent appointed

by the Banks is not satisfactory. Non-availability of the BC agents at the field level

tantamount to denial of banking service to the senior citizens, destitute and disabled

beneficiaries and their right to enjoy the benefit timely remittance into their bank

accounts by the State Government. The Director General, Social Justice &

Empowerment informed that since the commencement of implementation from the

month of April, 2011, a total of ~ 54 crores were disbursed manually using physical

payee receipts through banks along with simultaneous enrolment for opening of

bank accounts and another ~ 504 crores was transferred into the bank accounts

electronically up to 30th November, 2011. In fact, as reported by the banks, an

amount of~ 96 crores is still lying undisbursed as on 30.11.2011, though 80% of the

total amount was released up to 12.08.2011. This shows that the infrastructure

deployed by the Business Correspondent of the Banks is grossly inadequate to

provide a satisfactory level of banking service to the 2 million banking customers.

Due to the uncertain and rare visit of the BC agent in the local area, there is no

perception of banking service amongst the beneficiaries. The schedule of visits of

the BC agent is uncertain causing inconvenience to the account holders. The

average frequency of visit of the BC agent in the village has been once every 90

days and in some villages, there has been no visit at all in the last 6 months. An

analysis of the transaction data supplied for a period of one month by the TSP

indicates that the average transaction value is very high at ~ 1,200 against the

average monthly benefit of~ 615/-.

(ii) Other major problems encountered are non-operation of accounts; making manual

payments using the Department's E pay-order to Banks, multiple accounts to the

same person, not carrying out biometrics based de-duplication, Non establishment

of Customer Complaint Centers and non supply of transaction data for monitoring

by the department.

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(iii) The Chairman noted with a concern that during the period of 86 days for which the

transaction data was provided by Mis FINO, the BC appointed by the six banks

(ICICI Bank, HDFC Bank, AXIS Bank, UBI, OBC and Corporation Bank) in 18

districts of the State, the average terminal-days deployed per month was only 4,586

against a total of 16,34,075 operational bank accounts. Actually, this translates to

providing one terminal-day for every 356 accounts per month, whereas any norm

below one terminal-day for every 50 transactions will result in poor service quality.

The average under-deployment of terminal-days works out to 86%. The

performance was noted to be poor especially in the districts of Kurukshetra (HDFC

Bank), Faridabad (AXIS Bank) and Mewat (Union Bank of India).

(iv) In Hisar district, the transaction data was provided by Mis A Little World, the TSP

appointed by State Bank of India for a period of 104 days. The average terminal-

days deployed per month worked out to 1,885 against 1,48,283 operational

accounts. In this case, one terminal-day was deployed by the Business

Correspondent, Mis Zero Mass Foundation, for every 79 accounts per month. There

was an under-deployment to the extent of 36.4% in the case of district Hisar.

(v) The transaction data provided by MIS TCS appointed as the TSP by Punjab

National Bank in Rohtak district could not be put to proper analysis as the

transactions carried out in Sampla and Lakhan Majra blocks were not separated

from the rest of the district where the bank is carrying out its own operations under

the FI scheme.

Note: The number of terminal-days deployed by the Business Correspondent as analyzed from

the transaction file made available to the Department is shown in the Table at the Annexure.

3. Commitments made by Banks:

(i) After deliberations to improve the quality of service of operations of the Business

Correspondent, the bank representatives (excI uding Central Bank of India)

undertook before the Hon 'ble Chief Minister to provide a minimum of one terminal-

day per month for every 50 accounts. The Banks promised to prepare a schedule of

deployment of micro-A TM terminals and published the same within the next 10

days. The balance amounts in the pension accounts will be completely distributed

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by the 3151 December, 2011. In case of inability of appointment of BC to complete

the distribution by 31.12.2011, the Banks will remit the remaining amount to the

Department for distribution to the rightful beneficiaries.

(ii) While expressing satisfaction with the firm commitments made, the Hon'ble CM

stated that the Punjab National Bank being the State Lead Bank should set an

example first. The Executive Director, Punjab National Bank promised to cover the

entire district of Rohtak by the end of March, 2012. The ICICI Bank representative

assured to deploy 750 agents in the assigned six districts for at least 20 days a

month.

(iii) It was noted with concern that Gurgaon was the only district in the State where the

EBT scheme could not commence due to lack of interest of Central Bank of India.

The previous commitments made to the Chief Secretary and Financial

Commissioner and Principal Secretary to Government, Haryana, Social Justice &

Empowerment Department in their meetings was not adhered to. Moreover, there

has been little progress regarding creation of accounts of the registered

beneficiaries. Their attitude is amply reflected as no senior officer of the Bank was

deputed for the important review. The request of the Bank to allow commencement

of EBT scheme in part of the district was not accepted owing to the slow progress

till date. It was decided that such request can be entertained only after the Bank

demonstrates commitment by creating accounts of at least 80% of the registered

beneficiaries. The bank promised to create accounts of at least 80% of the registered

beneficiaries and integrate these account numbers with the website data of the

department latest by 3151 March, 2012. It was decided that in case the Bank is not

able to meet this target by 3151 March, 2012, the MoU signed with the Bank will be

deemed to be terminated.

4. Decisions Taken:

Broadly, the decisions taken are summarized as under:

(i) A minimum of one terminal-day per month will be provided by the Business

Correspondent appointed by the Banks for every 50 accounts. Monthly schedule of

deployment of the BC agents will be published within the next 10 days and will be

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adhered to strictly, failing which penalty will be levied as prescribed in the

document titled, "Service Level Performance Standards For Electronic Benefit

Transfer through Banks".

(ii) The balance amounts in the pension accounts will be completely distributed by the

31st December, 2011. In case of inability of the appointed BC to complete the

distribution by 31.12.2011, the remaining amount will be remitted back to the

Department for distribution.

(iii) The accounts will be strictly operated from the micro-A TM terminals using Smart

Cards.

(iv) Only one account per beneficiary will be opened, irrespective of the number of

benefits enjoyed.

(v) The Banks will carry out biometrics based de-duplication and remove duplicate

identities.

(vi) Customer Complaint Centers will be opened in every Block and Urban Local

Bodies (Municipal Committees/ Councils/ Corporations), for which physical

infrastructure space is being provided by the State Government.

(vii) The Technical Service Provider of the Banks will provide transaction data

containing location code to the Department on regular fortnightly basis for analysis

of the transactions.

(viii) The balance in individual pension accounts will be uploaded on regular monthly

basis with the Department's pensioners' record to evaluate the transaction activities.

It was decided that a copy of the minutes with a copy of the Implementation

Guidelines framed by the department be sent to the Secretary, Department of Financial

Services, Government of India, New Delhi and the Governor, Reserve Bank of India, Mumbai

with a request to frame detailed guidelines on the Business Correspondent model of Banking

defining Minimum Standards of Service Quality and penalties for non-adherence to the same.

The meeting ended with a vote of thanks to the Chair.

~ lL~Director General,

Social Justice & Empowerment, Haryana.zs" December, 2011

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Sr. Name of District No. of bank Terminal-days deployed by Business Correspondent Average TO Required TO in Under-No. accounts deployed month @ 1 deployment

August September October November Total per month per 50 (in %age)(24 - 30) (1- 7) accounts

1 Ambala 85,196 165 8 216 30 419 149 1,704 -91.3%2 Bhiwani 148,680 534 248 478 91 1,351 479 2,974 -83.9%3 Faridabad 53,436 4 - - - 4 1 1,069 -99.9%4 Fatehabad 103,171 398 196 564 1 1,159 411 2,063 -80.1%5 Jhajjar 78,269 - 119 537 53 709 393 1,565 -74.9%6 Jind 127,939 326 217 241 - 784 278 2,559 -89.1%7 Kaithal 105,880 447 95 336 5 883 313 2,118 -85.2%8 Karnal 125,268 577 46 215 287 1,125 399 2,505 -84.1%9 Kurukshetra 79,922 193 25 20 17 255 90 1,598 -94.3%10 Mahenderagarh 82,522 314 144 233 3 694 246 1,650 -85.1%11 Mewat 63,199 70 48 79 - 197 70 1,264 -94.5%12 Palwal 75,974 153 87 78 5 323 115 1,519 -92.5%13 Panchkula 23,067 46 20 103 - 169 60 461 -87.0%14 Panipat 76,178 512 62 229 - 803 285 1,524 -81.3%15 Rewari 77,459 398 139 245 35 817 290 1,549 -81.3%16 Sirsa 127,183 325 185 233 9 752 267 2,544 -89.5%17 Sonipat 115,173 466 78 577 106 1,227 435 2,303 -81.1%18 Yamunanagar 85,559 12 306 904 37 1,259 447 1,711 -73.9%

Sub-total (FINO) 1,634,075 4,940 2,023 5,288 679 12,930 4,586 32,682 -86.0%

July (20-31) August September October

19 Hissar (ALW) 148,283 705 1,900 2,668 1,155 6,428 1,885 2,966 -36.4%

OctoberNovember

December(21-31) (1-5)

includes TDsfor20 Rohtak-part (TeS) 19,260 171 563 189 923 612 385 FIin district