RBI/2011-12/153
RPCD.CO.BC.FID.No. 16/12.01.019/2011-12

August 12, 2011

The Chairman/CMD/CEO of all scheduled commercial banks

Dear Sir/Madam,

Operational Guidelines on implementation of Electronic Benefit Transfer (EBT)
and its convergence with Financial Inclusion Plan (FIP)

As you are aware, Electronic Benefit Transfer (EBT) for servicing low value accounts and extending banking infrastructure to underserved low income areas has been implemented in the states of Andhra Pradesh, Haryana, Karnataka, Orissa, Chhattisgarh, Himachal Pradesh, Uttarakhand, Bihar, Punjab, etc. on pilot basis in select districts under the "One District – One Bank" Model. Difficulties have been expressed by stake holders in scaling the model.

2.        The experience gained so far suggests that the "One District – One Bank" Model has not been able to achieve the objective of financial inclusion. Allocation of villages amongst banks under the Financial Inclusion Plan (FIP), i.e. Roadmap for providing banking services to villages with population above 2000, has been generally on the basis of the Service Area Approach. This has led to a situation wherein the designated bank for EBT and FIP in the same village differed. This issue has been raised in various fora by the State Governments and banks. For clearer conceptual understanding and based on detailed consultative meetings and interface with stake holders, "Operational guidelines on implementation of Electronic Benefit Transfer and its convergence with Financial Inclusion Plan" has been formulated. These guidelines are expected to give a fillip to financial inclusion efforts and lead to a scalable and sustainable financial inclusion model.

3.       A copy of the operational guidelines is enclosed for necessary action.

Yours faithfully,

(Deepali Pant Joshi)
Chief General Manager-in-Charge