RBI to decide if private banks can hold MNREGS accounts -Governance Now

RBI to decide if private banks can hold MNREGS accounts

The request had come from some states

Brajesh Kumar | December 30, 2011

Private banks will have to wait for a Reserve Bank of India (RBI) nod before they are allowed to open accounts for the huge MNREGS workforce in the country. The request from some of the states is lying with the bank.

“It is informed that the issue was taken up with department of finance which has taken up the matter with the RBI. The RBI has informed that as per extant policy of the bank, only the three private banks, namely ICICI, HDFC and Axis banks are authorised to carry government business. Further these banks are not authorised to conduct any new/ fresh business other than they those for which they were authorized at the time of their initial authorisation,” said a rural development ministry note to the states.

The note has said that the bank has acknowledged the proposal and a reply is awaited.

In 2009-10, wages under the MNREGS were paid to a total of 9.2 crore individual and joint bank and post office accounts, with banks alone accounting for 5.0 crore accounts. As of now, only nationalised banks are allowed to open MNREGS accounts.

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