Monday, September 21, 2009

NREGS job cards will enjoy status equal to that of a passport, PAN card, driving licence and voter ID

NREGS job cards will enjoy status equal to that of a passport, PAN card, driving licence and voter ID under the Know Your Customer norms of banks

IN A decision with major implications for the rural poor, the government has approved the job cards issued to them under the NREGS, the UPA government's flagship rural job guarantee scheme, as a valid document under the Know Your Customer (KYC) norms for banks. The government's decision accords the NREGS job cards a status similar to that of a passport, driving licence, PAN card and voter's identity card for the purposes of opening an account in a bank in the country and gives the rural poor much easier access to financial services by banks.

In fact, the Rural Development Ministry had written to the state governments last week to update the job cards already issued to over 10 crore households in the country to avoid any discrepancies regarding the details of card holders.

The Ministry has asked the state governments to ensure that the job cards contain the signature of the registering authorities and that of a state government official in addition to the photographs and signature of the job card holders to make the issued cards valid under the KYC norms. The move holds significance in view of the fact that it would help the rural poor access financial services by banks much easily.

Thus far, 7.33 crore NREGA bank and post office accounts have been opened but only about half of these are bank accounts. The move would allow the rural poor getting payments from post office accounts to use their job cards to open bank accounts.

These documents are required for opening a bank account under the guidelines issued by the RBI under the Prevention of Money Laundering Rules, 2005 adopted as a step towards combating financing of terrorism.

However, sources in the Ministry have said that this addition of the NREGS job card to the documents valid for opening a bank account is frought with danger as authorities in the states, particularly Northeastern states, have warned of the participation of illegal Bangladeshi immigrants under the scheme. Sources said that the the move may enable illegal migrants to access banking networks in the country.

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