State-run lenders are set to be the key for government's direct cash transfer scheme by providing platform for transferring the cash directly to the beneficiaries of over 34 welfare programmes from January 1, 2013.
Media reports said that public sector banks will open 5,000 ATMs in 51 districts in 2013 in line with government's directive to make the banking services available to all beneficiaries. As per the directive, banks will have to have at least one branch or business correspondent agents (BCA) for every village or group of villages with 1,000 to 1,500 households.
"Once the scheme kicks in, there will be a huge load on the banks as beneficiaries will like to withdraw money and also do other transactions. ATMs will facilitate this and lessen the burden on the banks," said a finance ministry official, as per media.
State-run banks are already working on providing 2 million point of sale, or POS, terminals across the country to allow customers to carry out small and medium-sized transactions, said the report.
"Cash transfer is just one step. We want that all beneficiaries should be able to utilise other banking services. It is a win-win situation as banks will also get low-cost deposits from such account holders," the official said.