7 years ago

World Bank to help introduce direct cash delivery by banks

Objective is to cleanse social safety net programme of corruption

Picture used for representation.
Picture used for representation.

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The World Bank (WB) would assist in rebuilding the system of government cash transfers under the social-safety-net programme (SSNP), introducing direct delivery by banks to recipients to end irregularities.

Government officials said Wednesday the Washington-based development financier will help establish transparent beneficiary-selection process and modernise the management of the cash-transfer system.

Under the WB support, the government would hand over cash to the beneficiaries directly through the digital payment systems to check any possible misappropriation of the public money, Social Welfare Secretary Md Zillar Rahman told the FE.

An Economic Relations Division (ERD) official said the World Bank would provide US$300 million for facilitating the modernisation and financing of government's cash-transfer system.

The Department of Social Services under the Ministry of Social Welfare will upgrade the payment system, reinforcing it with the involvement of Election Commission's National Identity Card (NID) wing, the Office of Birth and Death Registration and Bangladesh Bureau of Statistics (BBS), to establish a transparent and modern public cash-transfer system.

Allegations are rife that the SSNPs are not reaching the target groups as selection process of the beneficiaries for the ex-gratia payments from government is not transparent and that there is massive corruption subverting the state-endowed social safety for the down-and-outs.

A section of ruling-party elements and their allies usually bag benefits of the SSNP rather than the poorest and vulnerable groups, affecting the target of attaining a hunger-and poverty-free nation by 2030, experts said.

According to government authorities, currently it has nearly 140 SSN programmes across the country to support the vulnerable sections of people, like widows/widowers, disabled, old-age people, poor mothers and children, and beggars.

The state spends nearly 2.0 per cent of Gross Domestic Product (GDP) for the vulnerable groups in the country to pull them out of poverty.

The ERD official said out of the $300 million WB-assured loans, $30 million will be spent on modernising beneficiary-selection and-management system for the SSNP.

Some of the $300-million funds will enter into government budget to be utilised to hand over the cash for the vulnerable groups under the social-safety-net recipe.

The Social Welfare Secretary, Mr Rahman, said: "We want to transfer the cash to the beneficiaries directly, instead of any medium, for ensuring the best use of government's social-safety-net programme."

The vulnerable groups of people under the SSN programme will have biometric ID card which will be used to receive the cash from the safety-net payments, he added.

Currently, any representatives of the beneficiaries could withdraw money from the banks on behalf of the targeted vulnerable persons, which sometimes leads to misuse or misappropriation, the secretary said.

"After modernisation of the payment system, the bank representatives or their agents will go to the beneficiaries' doorsteps and deliver the cash. It will be the direct communication system between the Social Welfare Department and the beneficiary," he said.

A senior Economic Relations Division (ERD) official said they have almost completed discussion with the WB to receive its assured $300 million worth of funds for upgrading the cash-transfer programmes.

"We are hopeful of signing the loan agreement with the Washington-based lender shortly to get the fund for modernising the government's cash-transfer system and management," he added.

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