CHENNAI: Of the nearly 10 lakh beneficiaries receiving a monthly honorarium of Rs 1,000 through cooperative banks under the Kalaignar Magalir Urimai Thogai (KMUT) scheme, about 60% of them have not been withdrawing the full amount within the same month, indicating a healthy trend among these women to save part of the money for future use, official sources from the cooperative department said.
According to officials, about 50,000 of these KMUT beneficiaries have opened recurring deposit (RD) accounts with their respective cooperative banks, with monthly savings ranging from Rs 300 to Rs 500. RDs offer higher interest rate than regular savings accounts. Cooperative banks are also offering 8% interest on RD accounts for KMUT beneficiaries, compared to the usual 7% offered to other RD account holders.
A senior official said, “We found that nearly 60% of KMUT recipients did not withdraw their entitlements in full every month. A chunk of them withdrew funds partially once in two months or three to six months. So, we encouraged them to transfer these funds to RD accounts, which offer 8% interest compared to the 4% earned in savings accounts.”
He further said accumulating funds in RD accounts over one or two years can provide significant financial support for these families.
‘Interest on RD indirect benefit of govt scheme for households’
Especially for families that often borrow from usurers in emergencies, the official added.
“This (interest from RD accounts) has turned out to be an indirect benefit of the KMUT scheme for women households. We are planning to open two lakh RDs through KMUT recipients,” he said.
The cooperative banks, owned by the state government, mobilise funds through public deposits and extend credit for agricultural and non-agricultural activities. The minimum deposit amount for RD accounts has been reduced to `100 per month. An official noted, “This also benefits the banks by allowing them to rotate funds through lending, thereby increasing their earnings. Cooperative banks see their highest profit from jewel loans.”
Special interest
To further promote savings, co-op banks are also offering 8% interest on RD accounts for KMUT beneficiaries, compared to the 7% offered to other RD account holders