Government has asked banks to take steps to increase coverage under the Atal pension scheme as lenders failed in meeting the sales target for the social security scheme in the last financial year.
The performance of banks under the scheme was discussed during the review meeting conducted by Finance Minister Arun Jaitley last week, sources said. APY was launched by Prime Minister Narendra Modi in May last year.
Banks have been asked to ensure wide coverage under the Atal Pension Yojana (APY), they added.
Public sector banks (PSB) were assigned targets in two phases. The first phase was up to December 31, 2015, while the second phase concluded on March 31, 2016.
However, all the large PSBs, including State Bank of India, fell short of the target by a wide margin.
For the first phase, SBI was able to enroll just 2,83,553 people under the scheme against the target of 44,80,000, according to the sources.
In the second phase, SBI was able to enroll 50,315 people under the scheme against the target of 4,86,180.
Punjab National Bank was able to enroll 1,50,510 people against the projected target of 17,23,120, thus achieving merely 8.73 per cent of the target.
In the second phase, PNB was able to enroll 35,473 people against the target of 1,86,720.
Smaller banks, however, fared well compared to their large peers. Andhra Bank achieved 23.25 per cent and 26.28 per cent target in the first phase and second phase respectively.
Similarly, Indian Bank achieved 13.22 per cent and 21.31 per cent in the first phase and second phase respectively, official data showed.
State Bank of Mysore Managing Director N K Chari said, “Henceforth we will now be focusing more on the sale of APY through all our branches along with other products.”
Chari agreed that even though the SBM branches were selling APY along with other banks in past too, the focus was not much on APY.
The government has asked PSBs to oversee the performance of regional rural banks sponsored by them. Moreover, RRBs have been asked to improve their APY activation, sources said.
The government has asked to tap channels like business correspondents, aggregators and microfinance institutions to provide the benefits of APY to target beneficiaries at grass root level, they added.
Moreover, the banks have been advised to offer APY to their customers through alternate channels such as net banking and all the state-run banks have been asked to increase their branch participation in APY to ensure wider coverage.
Post de-regulation of aggregators’ incentive, banks have been instructed to fix the sharing structure as per their own likings and they may take advantage of this opportunity to maximise enrolments.