Demonetisation has come as a blessing in disguise for nearly 21 lakh tea and jute mill workers in Assam, West Bengal and Andhra Pradesh. Their wages will now be credited to their bank instead of being paid in cash.

Following the demonetisation, 80-odd jute mills in India started using the banking channel to transfer fortnightly salaries of the nearly 3.7 lakh workers.

An earlier account said only five of the 62 mills near Kolkata were paying via banks. West Bengal accounts for 75 per cent of India’s jute goods production.

“It’s a transformational change,” Raghavendra Gupta, Chairman of the Indian Jute Mills Association, told BusinessLine .

“We have already cleared 50-60 per cent salaries. The rest will be cleared this week,” he said. Earlier, the industry blamed workers for not giving bank details.

Statutory dues

Asked if transparency in payments would help mitigate issues related to non-payment of statutory dues, Rao said there have been no fresh cases over the last five-seven years.

The organised tea industry has been citing the remoteness and inadequacy of the banking network for making cash payments to 12 lakh workers in Assam and five lakh in Bengal.

However, a joint initiative of the Assam Government and the Centre is set to put an end to the practice.

ATMs in tea estates

The Assam government has ordered over 800 tea estates to open accounts for all tea workers by December 5 and asked banks to establish ATMs/micro-ATMs in tea-growing regions by December 15.

Though the West Bengal government didn’t take such an initiative, banks held meetings with nearly 300 organised tea producers in the State with a similar mandate.

“We had a meeting with tea producers in North Bengal last week. We will use the banking correspondent network to open accounts and micro-ATMs. A mobile ATM will also be deployed,” said Pawan Bajaj, Managing Director and CEO of United Bank of India.

UBI accounts for nearly 30 per cent of the banking services in West Bengal and the North-East.

Welcoming the move, Azam Monem, Chairman of the Indian Tea Association (ITA), said the tea industry was ready for bank transfer, but felt banks might not find it easy to extend the services in remote areas by the December 15 deadline.

“A majority of tea workers don’t have accounts due to the poor banking network,” he said.

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