Smart cards in rural Andhra by Aug `08

The Andhra Pradesh government on Monday set a target of providing smart cards to 10.8 million white ration card holders (below poverty line families) supported by handheld biometric machines in each of the 25,000 gram panchayats in the state by August next year.

Members of the women self-help groups would be trained as banking correspondents to handle transactions of these families, including distribution of old-age pensions and disbursement of wages under the National Rural Employment Guarantee (NREG) programme, apart from banking.

A pilot scheme under which villages in six mandals of Warangal district and two mandals of Karimnagar district, where the public sector banks in close association with the state rural development department have been handling the financial transactions of poor families through the smart card system, would form the basis for the statewide implementation, according to state rural development minister G Chinna Reddy.

Several banks including State Bank of Hyderabad, State Bank of India, Andhra Bank, Axis Bank, Union Bank of India and AP Grameen Vikas Bank are involved in the pilot scheme.

Chief minister YS Rajasekhara Reddy held a review meeting with bankers and senior officials of the department of rural development on the smart card project and said the scheme had to be replicated to the entire state in the next one year.

Bankers have agreed to bear the entire cost of the handheld biometric machines (around Rs 20,000 per machine) once the scheme is extended throughout the state. Under the pilot scheme, the banks and the state government have equally shared the cost.

The handheld machine with all-in-one features developed by Financial Information Network and Operations Limited (FINO), a subsidiary of ICICI Bank, would be given to banking correspondents in each village.

The government would provide a room either attached to the gram panchayat office or built separately for running the mini-bank, Chinna Reddy said.

Banks will open accounts for these poor families, who are also the beneficiaries of various government welfare schemes, and all the transactions including savings and withdrawals would be handled through their respective smart cards and biometric machines.