‘eFMS announces its presence in the State of Odisha. RBI facilitates Electronic Payments and Receipts for Government of Odisha
Reserve Bank of India, collaborated with Government of Odisha, for implementation of the the electronic Fund Management System (e-FMS) for Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) beneficiaries.
The objective of the (eFMS) is to make electronic payment of wages to MGNREGA beneficiaries in the State of Odisha.
The eFMS went live on June 29, 2012 for all the Blocks, in the districts of Ganjam, Gajapati and Mayurbhanj and one block viz. Bolagarh of Khurdha district. By Gandhi Jayanti, I.e October 02, 2012, is expected to be live in the complete Odisha State.
Implementation of eFMS is expected to drastically cut down the delays in payment of wages to MGNREGA beneficiaries and also bring about transparency in the system apart from resulting in savings in operational costs.
What is eFMS: Electronic Funds Management System is the act of transferring of money from a single Bank Account (Single Debit) directly to the Beneficiary Accounts (Multiple Credits) (Job Card Holders in this pilot project) without any paper money or instrument changing hands I.e only Book entries.
The final credits are executed via Regional Electronic Clearing Service (RECS) of National Electronic Funds Transfer (NEFT). In Odisha, the preferred choice is RECS.
The eFMS scheme involves disbursement of wages of MGNREGA beneficiaries directly to their bank accounts through the Regional Electronic Clearing Service (RECS) provided by the Reserve Bank, Bhubaneswar.
Based on the data/information provided by various nodal agencies (Gram Panchayat/block/district level), authorised officials of the Sponsor Bank (State Bank of India in this case) download the files and send to the Reserve Bank for processing on the same day on RECS so that accounts of beneficiaries, maintained with different banks, can be credited the next day.
On the same day, a new model of Government receipts was also launched.
In the new model, Agency Banks will forward the particulars of electronic receipt transactions on T+1 basis, i.e., the day following the date of transaction, to the Reserve Bank, Bhubaneswar instead of sending to the Cyber Treasury.
The Reserve Bank will process the e-receipt files, debit the accounts of banks and credit the account of the State Government instantaneously with the amount of e-receipts. The Reserve Bank will also generate e-scrolls and forward them to the Cyber Treasury.
The major benefits under the new model are :
enable the State Government to closely monitor reporting of e-receipts by banks,
receive quick credit to its account,
single source (i.e., the Reserve Bank) for receiving e-scrolls,
eliminate reconciliation problems.
The new system is an improvement over the existing one where the Government of Odisha collects various taxes, such as, commercial taxes, vehicle taxes, mining revenue, etc., online.
The old process flow :
The tax payers pay taxes online through their net banking account maintained with the agency bank.
The transaction particulars of these e-receipts are forwarded by the agency banks to the Cyber Treasury of the Government.
The e-scrolls in respect of these transactions are also required to be sent by banks to Cyber Treasury. Banks are expected to report the consolidated amount of e-receipts one day after the date of transaction (T+1) to the Reserve Bank, Bhubaneswar.
The Reserve Bank, Bhubaneswar debits the accounts of banks maintained with it with the amount of e-receipts and the corresponding credit is given to the account of the State Government.
The existing system had a number of issues pertaining to timely credit of funds, reconciliation issues, etc., and was hence considered less efficient.
In the interests of the banks, State Government and Central Government departments/agencies, Reserve Bank of India, has been motivating the respective players to switch over their receipt and payments from physical to electronic mode in view of its advantages, such as, less use of cash, quicker transmission of funds in safe and secured manner, etc.