View: Electronic Benefits Transfer (EBT) or Direct Benefit Transfer (DBT) Scheme

Electronic Benefits Transfer (EBT) is a system that allows eligible citizens to receive benefits from programs like the Supplemental Nutrition Assistance Program (SNAP) and Cash Assistance.

EBT cards function similarly to debit cards, with recipients receiving an allotted amount each month based on their household size and income. The beneficiary recipients can make purchases from designated shops, and their balance decreases.  For example, SNAP EBT allows participants to use their SNAP benefits to pay for food at authorized retail stores. When a participant shops at a store, their SNAP EBT account is debited to reimburse the store for the food purchased. Here, the Government incurs the expense of procuring subsidized products like food grains. This approach aims to enhance efficiency, transparency, and accountability in welfare delivery while minimising leakages and diversions.

In India, the Direct Benefit Transfer (DBT) scheme uses EBT and is enabled by the JAM   (Jan Dhan Aadhaar Mobile) trinity is the initiative by the Government of India to link Jan Dhan accounts, Mobile numbers, and Aadhar cards.

Direct Benefit Transfer (DBT) is the Government’s major reform initiative to reengineer the existing delivery processes, ensuring better and timely delivery of benefits using Information & Communication Technology (ICT) by transferring benefits into Aadhar-seeded bank/postal accounts, of accurately targeted beneficiaries, as well as in-kind transfers from Government to individual beneficiaries. Direct Benefit Transfer (DBT) was started on 1st January 2013 to reform the Government delivery system in welfare schemes for a simpler and faster flow of information/funds and reduction of fraud.

At present 310 schemes from 54 Ministries/ Departments are being implemented under DBT. As a process, Centrally Sponsored Schemes are implemented through State Governments, and granular level details are maintained by the respective State Governments.(Source:PIB.Gov).

To receive DBT benefits individuals have to request the bank to link their account by filling up the mandate and consent form from the bank. This account will be seeded with NPCI-mapper by the bank to operate as DBT- enabled account.  

Benefits of based DBT

 DBT ensures that nobody else can claim benefits by impersonating the beneficiary.

In case of cash transfers, the money reaches directly to the beneficiary’s DBT-enabled bank account of his/her choice.

For availing benefits, beneficiaries have to first enroll themselves under the schemes through the concerned implementing authorities in their area and authenticate themselves using Aadhaar, as per the requirements of the specific scheme.

Benefits under different schemes for which the beneficiary has enrolled are transferred only to the DBT-enabled bank account of his/her choice.

If an individual has availed SMS alert facility from the concerned bank where his/her DBT account is opened, then the bank will send out SMS alerts when you get DBT funds in an account. Alternatively, he/she can also check your account balance using an ATM, micro ATMs/ Bank Mitra, internet/mobile banking, or phone banking.

Other than cash and kind transfers, the Direct Benefits Transfer scheme also transfers funds and subsidies to several non -governmental functionaries that help implement government policies until the very end. This includes community workers, NGOs, teachers in aided schools, etc. They are not beneficiaries but are given training, wages, and incentives to serve the beneficiaries.

On the subject of the use of Aadhaar to facilitate the delivery of social welfare benefits by direct credit to the bank accounts, Reserve Bank of India vide its circular RBI/2015-16/289/FIDD.CO.LBS.BC. No.17/02.01.001/2015-16 dated January 14, 2016, clarified that the use of Aadhaar Cards and seeding of bank accounts with Aadhaar numbers is purely voluntary and it is not mandatory. The above notification was given to the Hon’ble Supreme Court of India’s interim orders dated August 11, 2015, and October 15, 2015 (W.P. ( c ) No. 494 of 2012) on the usages of Aadhaar.

In supersession of the above Circular, RBI in its circular RBI/2019-20/40 dated August 13, 2019, notified that banks need to ensure that opening of bank accounts and seeding of Aadhaar numbers with existing or new accounts of eligible beneficiaries opened for Direct Benefit Transfer (DBT) under social welfare schemes, should conform with the provisions listed under Section 16 of the Master Direction – Know Your Customer (KYC) direction, 2016 (updated as on May 29, 2019) and extant provisions of the Prevention of Money Laundering (PML) Rules.

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