The ministry of rural development has advised the state governments to undertake a massive campaign for opening of saving accounts foer the beneficiaries of the National Rural Employment Act  (NREGA) in banks and post offices to ensure the wages due to them are transferred directly to them through individual bank accounts, cutting out middlemen.

To eliminate fraudulent claimants, the ministry has been insisting that the dues be paid directly into each beneficiary through an individual bank account. Moreover, this also offers the rural banking sector an immense opportunity to bring more people into the fold of the organised banking system.

However, despite the spread of rural bank branches, a large number of rural households still do not have any access to banking services, leaving over 50 per cent of adults outside the coverage of organised banking. Now with the implementation of NREGA large flow of funds from the centre to rural households is opening up new growth possibilities for these banks.

For instance, during 2007-08 Rs 10,738.47 crore was paid as wages to more than 3.3 crore households out of a total expenditure of Rs15,856.89 crore.

So far, the total number of bank and post office accounts opened across the country under the NREGA has reached 1,62,01,674, with Andhra Pradesh having topped the list with 80, 40,000 new bank and post office accounts, followed by Jharkand opening 21, 35,377 new new bank and post office accounts and in Madhya Pradesh 13, 81,261.

The banks open the accounts under NREGA without any charge. Separate individual accounts are opened for women workers in the case of male headed household. All data regarding payments through bank or post office accounts are entered in the individual's job card.

Payments of NREGA wages through banks and post offices are useful means of separating payment agencies from implementing agencies. The types of banks allowed are regional rural banks, cooperatives and nationalised banks.

For inaccessible areas, mobile telephony technology is being piloted for delivery of banking services.

Every person under scheme is entitled to wages at the minimum wage rate fixed by the state governments. The payments are made on a weekly basis on a pre-specified day of the week in each gram panchayat with details of the wages paid through banks or post office accounts being made public.

Number of accounts opened in bank and post offices :