Social security allowance through cards, fingerprints
KATHMANDU, SEP 23 -
Amid complaints about the misuse of the social security allowance meant for the elderly, single women and marginalised groups, the government is preparing to distribute the allowance on the basis of fingerprints and special identity cards.
The Ministry of Local Development (MoLD), in partnership with the World Bank, is preparing to launch a pilot plan to test the modalities from the fiscal year 2012-13.
In the wake of the complaints, the government has already taken an initiative to provide the allowance through the banking channel this year in 58 municipalities and a dozen VDCs and district headquarters from this year.
“The proposed new measures will make the cash transfer transparent and convenient,” said Doug Johnson, consultant at the World Bank involved in designing the new measure. The new modalities were designed under the Social Safety Net Project initiated by the bank.
There are concerns about the misuse of the social security fund as it is as big as Rs 7.5 billion for the current fiscal year.
The project has already prepared the terms of reference for both biometric (fingerprint-based) payment service providers (banks) and two factor (special cards-based) payment service providers. “As irrelevant persons cannot match fingerprints, chances of misuse through the biometric system are minimal,” said MoLD Spokesperson Dinesh Thapaliya. “However, the card-based system is also reliable.”
The process of distributing social security allowance through the two new methods will formally begin after the ministry endorses the terms of reference. “The ministry is likely to endorse the terms of reference within a few days,” said Thapaliya.
The project aims to start distributing the allowance through these two means in six districts and prepare a database of beneficiaries and management information system (MIS) in an additional six districts. Although the pilot plan is just for a year, banks involved have to pledge to continue the service for two additional years (three years in total) for the fee agreed initially, if the ministry requests so.
According to the terms of reference, only commercial banks are allowed to transfer the social security allowance and they have to sign a contract with the ministry after winning a bid through open competition. According to the terms, the approximate date of signing the contract is April 1, 2012 and the first payment will be made on September 30, 2012. Bankers also see a good business opportunity in the new system. “We welcome any financial transaction that take place through the banking system,” said Rajan Singh Bhandari, vice-president of Nepal Bankers’ Association. “On top of that, banks are well equipped with all required technologies for fund transfer.”
As per the terms of reference, the chosen banks are required to collect details of beneficiaries including photo, all 10 fingerprints and other data required to meet the ‘know your customer’ requirements and should ensure that there has not been any duplication. They can charge fees such as project management fee which is paid once for the entire project, fee for each person enrolled as beneficiary, fund transfer fee and fee for additional government benefits.
Besides, the banks also have an extra benefit. Johnson said they could offer different deposit products to beneficiaries as well.
Source: Kantipur
Amid complaints about the misuse of the social security allowance meant for the elderly, single women and marginalised groups, the government is preparing to distribute the allowance on the basis of fingerprints and special identity cards.
The Ministry of Local Development (MoLD), in partnership with the World Bank, is preparing to launch a pilot plan to test the modalities from the fiscal year 2012-13.
In the wake of the complaints, the government has already taken an initiative to provide the allowance through the banking channel this year in 58 municipalities and a dozen VDCs and district headquarters from this year.
“The proposed new measures will make the cash transfer transparent and convenient,” said Doug Johnson, consultant at the World Bank involved in designing the new measure. The new modalities were designed under the Social Safety Net Project initiated by the bank.
There are concerns about the misuse of the social security fund as it is as big as Rs 7.5 billion for the current fiscal year.
The project has already prepared the terms of reference for both biometric (fingerprint-based) payment service providers (banks) and two factor (special cards-based) payment service providers. “As irrelevant persons cannot match fingerprints, chances of misuse through the biometric system are minimal,” said MoLD Spokesperson Dinesh Thapaliya. “However, the card-based system is also reliable.”
The process of distributing social security allowance through the two new methods will formally begin after the ministry endorses the terms of reference. “The ministry is likely to endorse the terms of reference within a few days,” said Thapaliya.
The project aims to start distributing the allowance through these two means in six districts and prepare a database of beneficiaries and management information system (MIS) in an additional six districts. Although the pilot plan is just for a year, banks involved have to pledge to continue the service for two additional years (three years in total) for the fee agreed initially, if the ministry requests so.
According to the terms of reference, only commercial banks are allowed to transfer the social security allowance and they have to sign a contract with the ministry after winning a bid through open competition. According to the terms, the approximate date of signing the contract is April 1, 2012 and the first payment will be made on September 30, 2012. Bankers also see a good business opportunity in the new system. “We welcome any financial transaction that take place through the banking system,” said Rajan Singh Bhandari, vice-president of Nepal Bankers’ Association. “On top of that, banks are well equipped with all required technologies for fund transfer.”
As per the terms of reference, the chosen banks are required to collect details of beneficiaries including photo, all 10 fingerprints and other data required to meet the ‘know your customer’ requirements and should ensure that there has not been any duplication. They can charge fees such as project management fee which is paid once for the entire project, fee for each person enrolled as beneficiary, fund transfer fee and fee for additional government benefits.
Besides, the banks also have an extra benefit. Johnson said they could offer different deposit products to beneficiaries as well.
Source: Kantipur
