Will DBT be a game changer for Financial Inclusion?

With the rollout of the Direct Benefit Transfer (DBT) scheme by the Central Government, the vision for a digitally empowered society has taken another great leap. It ushers in better accountability in governance and ensures that the government moves towards a more citizen-centric model.

The DBT scheme’s primary goal is to mitigate leakages during funds transfer and offer benefits directly to the citizens. Millions of Indian citizens are poised to benefit from DBT as all government refunds, subsidies and benefits can be received directly in their Aadhar linked bank accounts.

The technology propelling this scheme is Direct Debit. Now we all know in essence what Direct Debit is. It is an instruction that allows a third party to transfer money from a person’s account on agreed dates, typically in order to pay for bills or loans.But how does it benefit the corporate sector? What is the core value it brings? And why should firms encourage their customers to pay via Direct Debit?

Let’s find out its benefits:

  • It eliminates the need for a human interface and thus greatly reduces the chances of improper governance through corruption, bribes and other unethical practices
  • It ensures timely delivery of services to beneficiaries, reduces bureaucracy, middlemen and red-tapism.
  • Since money/subsidies are transferred directly to the bank account of the beneficiary, it improves the quality and efficacy of government schemes and ensures benefits are delivered directly to citizens
  • It lends greatly to the government’s objective of financial inclusion
  • It aims to wipe out all leakages from disbursal and save precious exchequer money
  • By linking government schemes with a facilitating mechanism such as Aadhaar, the government is able to identify the beneficiary from his Aadhaar details while connecting it with DBT

It’s breathtaking when you consider the magnitude of the impact that DBT can make on the lives of 1.25 billion people in this country. It is an excellent platform for ensuring financial inclusion and bringing banking closer to the masses that have yet to benefit from formal banking services. However, it needs to a long-term vision to achieve its objective and short-term or ad-hoc measures will only do it harm.

Technology as an enabler for Financial Inclusion

The past decade has witnessed huge strides being taken in the technology space. Technological developments have accelerated the way we perform financial transactions. The government has also seen the benefits of going Digital and improving governance of citizens across the country. Schemes like Adhaar have ensured that financial inclusion is no longer a pipe dream but a reality. But before this reality manifests itself there are many problems that need to be addressed. The existing transfer system is plagued with issues that include but are not limited to inaccurate data of beneficiaries, broadband, and mobile connectivity, leaks and frauds etc.

Direct Benefit Transfer is, therefore, the way forward, however, to ensure it succeeds technology-driven solutions need to be implemented. One such solution is to integrate DBT with a Business Process Management (BPM) system that ensures workflow flexibility and comprehensive tracking. The use of automated workflows and pre-defined rules eliminate manual hand-offs and errors, overcoming challenges such as duplication and pilferage.

A Business Process Management (BPM) system with its extensive integration capabilities will ensure a streamlined DBT process.It will also provide the following benefits:

  • End-to-end automation from application registration to funds transfer
  • Single point interface for beneficiaries, officials and other stakeholders, allowing enhanced collaboration and monitoring
  • Pre-defined rules for application submission and eligibility check to eliminate errors
  • Real-time status updates for each application
  • Secured archival and easy access to beneficiary’s information


There is no doubt that Direct Benefit Transfer is the future and will prove to be a pillar of good governance as the country moves towards a digital future. However, like all solutions it needs to be implemented properly and using the right technology and by digitally empowering government officials. To ensure streamlining of the scheme and to reduce leakages, an end-to-end approach from application submission to funds delivery is the need of the hour. Therefore, a robust technology platform needs to be embraced than can ensure extensive integration, seamless collaboration, and 360 degree process visibility.

Virender Jeet
Virender Jeet
Senior Vice President – Technology
Newgen Software

To that effect, a Business Process Management (BPM) platform makes a strong case as it enables businesses to transform processes by automating and streamlining end-to-end processes. The benefits the BPM platform has provided to businesses has been validated many times over. If implemented correctly, it can very easily replicate those benefits in the government domain as well.

Disclaimer: The views and opinions expressed in this article are of Virender Jeet, Senior Vice President- Technology, Newgen Software.

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