Explanation:

In 2010 the Government of Jharkhand decided to introduce financial services as part of the existing system of Common Service Centres , known as Pragya Kendras in Jharkhand. The Pragya Kendra is a Gram Panchayat level centre, which is housed in the Panchayat office. The objective was to make the Pragya Kendras into Panchayat Banks as well and bring financial services to the Panchayat level. The Kendras were selected for reasons of financial sustainability.  Citizens can visit the kendras to avail of e-Governance services such as applying for a birth certificate, death certificate, caste certificate etc.

The Panchayat Banks model of Jharkhand has provided rural citizens with improved access to a range of government schemes as well as financial services, allowing citizens to carry out basic financial transactions and also access benefits of government schemes such as pensions and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) payments. The initiative has also led to the creation of local entrepreneurs amongst community members and provided a source of livelihood to bank operators. It has reduced systemic leakages and increased transparency as well, as the new system, coupled with the Aadhaar-based direct transfer system, credits money directly into the account of MGNREGA workers who can withdraw the money through biometric authentication.

The first partner banks were the State Bank of India (SBI) and Bank of India (BoI).