NACH and ABPS route has been extended

Amalendu Upadhyaya
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After reviewing the progress of the Aadhaar-Based Payment System (ABPS), the NACH and ABPS route has been extended till 31 December 2023 or until further orders.

Ministry of Rural Development has made it clear to all the States that beneficiaries who come for work should be requested to provide an Aadhaar number but will not be refused work on this basis.

New Delhi, 30th August 2023: The Ministry of Rural Development has said that It has been brought to the notice of the Central Government that in many cases due to frequent changes in the Bank Account Number by the beneficiary and non-updating of the new account number by the Concerned Programme Officer of the same, due to non-submission of new account by the beneficiary on time, several transactions of wage payment are being rejected (due to old account number) by destination bank branch.

A press release from the Ministry of Rural Development states that “In consultation with different stakeholders, it is found that to avoid such rejections, Aadhaar Payments Bridge System (APBS) is the best route for making wage payment through Direct Benefit Transfer (DBT). It will help the beneficiaries in getting their wage payment on time.”

According to the press release, Once Aadhaar is updated in the scheme database, beneficiaries need not update account numbers due to changes in location or change in bank account numbers. Money will be transferred to the account number which is linked with the Aadhaar number. In case of more than one account of the beneficiary, which is rare in the context of MGNREGA, the beneficiary has the choice to select the account.

The National Payments Corporation of India (NPCI) data shows that there is a higher success percentage to the extent of 99.55% or above where Aadhaar is enabled for DBT. In the case of Account-based payment such success is about 98%.

According to the press release, “APBS is helping the genuine beneficiaries to get their due payment and is instrumental in curbing corruption by weeding out fake beneficiaries. Mahatma Gandhi NREGS has not adopted Aadhaar-enabled payment. This scheme has opted for the Aadhaar-based Payment Bridge system. The progress of the Aadhaar-based Payment System (ABPS) has been reviewed and the mixed route of wage payment (NACH and ABPS route) has been extended till 31st December 2023 or till further order. The Ministry has made it clear to all the States that the beneficiary who comes for work should be requested to provide the Aadhaar number but will not be refused work on this basis. If a beneficiary does not demand work, in such case her/his status about eligibility for APBS does not affect the demand for work. Job cards cannot be deleted on the basis of the reason that the worker is not eligible for APBS.”

Under Mahatma Gandhi NREGS, APBS has been in use since 2017. After the almost universal availability of the Aadhaar number to every adult population, now Government of India decided to extend APBS for beneficiaries under the scheme. The payment will land through APBS only to the account associated with APBS, which means that it is a safer and faster way of payment transfer.

Out of the total 14.33 crore active beneficiaries, the Aadhaar has been seeded for 13.97 crore. Against these seeded Aadhaar, a total 13.34 crore Aadhaar have been authenticated and 81.89% of active workers are now eligible for APBS.  In the Month of July 2023, about 88.51% of the wage payment has been made through APBS.

Mahatma Gandhi NREGA is a demand-driven Scheme and is affected by various economic factors. A proper ecosystem for APBS is in place. Considering the benefits of APBS for beneficiaries, this is the best system to be followed for the payment.

What is an Aadhaar-based payment system (ABPS)?

The Aadhaar-based payment system is nothing but a route through which the payment is getting credited to the account of beneficiaries. There are well-defined steps adopted in this system and the role of beneficiaries, field functionaries and all other stakeholders is clearly defined.


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