E-payment of subsidies from this year

Money to be credited into accounts of govt schemes’ beneficiaries

Published: 30th September 2012 08:50 AM  |   Last Updated: 30th September 2012 11:15 AM   |  A+A-

Putting an end to the decades old manual grant of subsidy, the state government will now adopt e-payment of subsidy to enable beneficiaries of government welfare schemes to receive the money in no time. The e-subsidy payment will come into force from this financial year.

Bank-linked economic support schemes with government subsidy has been being implemented through the principal bank system since 1990. Under it, departments or agencies are allowed to maintain accounts with one branch of each participating bank to lodge the subsidy component in respect of the beneficiaries who are sanctioned loans through the respective bank  branches.

This procedure involves release of subsidy by the implementing agency in anticipation of sanctions by the bank concerned which will be utilised by their branches as and when loans are actually sanctioned and schemes grounded. In view of the problems faced over the years in prompt release of subsidy and timely grounding of schemes under the above system, the state government has decided to streamline the process of release of the subsidy.

The matter was taken up with the State-Level Bankers Committee (SLBC) which constituted a sub-committee consisting of the convener of State-Level Bankers Committee (SLBC), five lead banks, two lead district managers (LDMs) and a nominee of the finance department to examine the issue.

The sub-committee recently recommended to the government implementation of e-mode  for subsidy payment. On selection of beneficiaries under government-sponsored schemes through Grama Sabha or other approved mode, the sponsoring agency will send a list of beneficiaries along with proceedings to the service area bank branch concerned. On scrutiny and verification, the bank branch will either sanction or reject the proposal, with valid reasons in case of rejection. In respect of sanctioned cases, only upon completion of documentation and all the other formalities the bank requires for grounding, the branch will send the request of the beneficiary for release of subsidy to the government agency, through email and a letter.

Along with request for release of subsidy, bank branch will give loan account number (which is to be opened with (zero balance) and also exclusive non-operative savings  account number opened in the name of beneficiary which is linked to the above loan account. This link has been suggested since loan account cannot be opened with credit balance.

Subsidy will be released for credit into the loan account specified within a maximum period of 15 days on receiving a request from the bank branch.

After receiving subsidy in the dedicated/normal SB account of the beneficiary, the bank branch will take steps for grounding the unit within a maximum period of 15 days utilising the subsidy released by government. This time line can be relaxed only in cases where purchase committee needs to be constituted (for dairy and animal husbandry units).


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