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Centre mulls using PDS network to extend banking services

The government is mulling to use the 5.5-lakh strong public distribution system network to extend banking services, starting with a project to cover a tenth of the PDS shops soon, said a senior Finance Ministry official today.

By: | Mumbai | Published: September 19, 2016 10:18 PM
The official added, under the plan, the PDS network will act as a business correspondent for the banks. The plan is also to start a project to cover 55,000 shops soon. (Reuters) The official added, under the plan, the PDS network will act as a business correspondent for the banks. The plan is also to start a project to cover 55,000 shops soon. (Reuters)

The government is mulling to use the 5.5-lakh strong public distribution system network to extend banking services, starting with a project to cover a tenth of the PDS shops soon, said a senior Finance Ministry official today.

“We intend to use the PDS as a point of banking presence. You will be able to access your account by going to a point of sale terminal in a PDS shop. That is what we’re working towards,” the official said here.

The official added, under the plan, the PDS network will act as a business correspondent for the banks. The plan is also to start a project to cover 55,000 shops soon.

All PDS shops are run by the state governments and typically sells food articles, including grains, sugar and also kerosene, at subsidised prices as part of food security system.

Another official said at present, 1.5 lakh of the PDS shops have handheld machines which help establishing the identity of a beneficiary and also give a list of items she is entitled for.

“They connect with the Aadhaar server to make this possible. By a simple software and hardware upgrade, the same machine can connect with the core banking system of a bank,” the official explained.

Speaking on scope of the idea, the official said the PDS network is larger than that of post offices as every village with 1,000 population has a shop.

The plan is to roll-out the first set of 55,000 PDS shops in the next three months, the Finance Ministry official said, adding banks will be interested to have such a partnership.

Meanwhile, the official quoted first said the Banks Boards Bureau will be meeting here tomorrow and the issue of pending appointments at state-run Indian Overseas Bank is among the agenda.

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