Correspondent banking expands financial inclusion in rural Jharkhand

“It’s hard to believe that life can really change so much in just two or three years. But that’s how my experience has been since I took over this job in 2018 after becoming a member of the Women’s Self-Help Group (SHG) in 2015,” says Poonam Surin, who works as a sakhi banking correspondent (BCS ) in the tribe. -block dominated by Tethaitangar of Simdega district in Jharkhand.

Surin, a graduate, says she was a homemaker until she joined SHG, tutoring children in her village of Gargarbahar and earning around 1000-1500 each month. “On average, I now earn about 10,000 per month. And it is possible to increase it further because my income is linked to the number of banking transactions carried out through me. We receive a 0.5% commission on the value of each transaction,” says Surin.

In November 2021, Surin carried out 795 banking transactions worth 31.95 lakh.

There are others who have traveled far, making monthly transactions of more than 1 crore. In the same month, Anita Kumari of Jayshree Mahila Kalyan Samuh in Chitarpur in Ramgarh district made transactions worth 1.2 crore. Similarly, Gudiya Kushwaha of Vikash Mahila Mandal in Bela in Hazaribag district recorded transactions worth 1.09 crore.

Besides empowering women, SHG women like Surin are transforming banking services in rural areas, bringing them to the doorsteps of the needy, especially the elderly and the divyang (disabled), expanding financial inclusion for the rural population like never before.

These BCS are part of the SHGs (Sakhi Mandals) formed under the Deendayal Antayodaya Yojana (DAY) under the central government’s National Rural Livelihood Mission (NRLM).

In Jharkhand, the program is run by the Jharkhand State Livelihood Promotion Society (JSLPS), which falls under the state’s rural development department. According to official estimates, BC Sakhis conduct transactions worth 2.75 lakh 120 crores every month.

“Currently, we have 4,691 women working as bank agents. Some of them work in the same panchayats if they are large in terms of geographical distribution and demographics. Among them, 1,491 work as BCS after appropriate training. The goal is to have at least one BCS in all 4,370 gram panchayats in the state,” said Dheeraj Horo, State Program Manager (Financial Inclusion), JSLPS.

These banking correspondents provide basic financial services such as customer identification, information/application collection, individual account opening, cash withdrawal, deposit, transfer, Aadhar priming, pension services, scholarships for school children, payment of salaries under MGNREGA and withdrawal of funds under PMAY, etc. .

“While the concept of correspondent banking is to bring banking into rural pockets, involving women has far-reaching consequences. It has the potential for a silent social revolution in which women become empowered. It also promotes them as role models among the local people,” said Manish Ranjan, Jharkhand’s rural development secretary.

JSLPS officials said women working for BC Sakhi also help SHGs understand the banking system and improve credit links. “If SHG members become bank officers, it builds the confidence of other SHG members because most of them are illiterate. According to data from the State Level Banking Committee (SLBC), the credit tie with SHG women was only 27 crore in 2013. In 2021, it increased to 3,234 crores. This shows how confidence SHGs have increased in seeking bank loans,” Horo said.

During Covid-19 and the curbs, officials said, correspondent banking has played a key role, providing banking services closer to people’s homes, taking all precautions in accordance with established protocols. “Besides banking services, these BCS and SHG also helped cook and distribute food during the lockdown period,” Ranjan said.

However, technical issues, especially poor internet connectivity, are one of the main obstacles to the operation of correspondent banking, in addition to security issues in moving around with money for their work.

BCS Gudiya Kushwaha of Vikash Mahila Mandal in Bela in Hazaribag district which recorded transactions worth 1.09 crore, said poor internet connectivity forces them to restrict their operation from their kiosk, which functions as a mini bank.

“We always try to reach the needy, especially the elderly and disabled. We try to organize a weekly visit to the villages to meet the needs of the SHGs and their loan regulations. Even though customers are forced to come to our permanent centers, it is much more convenient for them. For example, people from our panchayat had to go to the Chouparan headquarters for banking services, which is about six kilometers from here. But now they are not required to exceed a kilometer to a kilometer and a half,” Kushwaha said.

Ranjan, while admitting internet connectivity was a concern, said his department had issued an order requiring the BCS to make regular visits to villages. “It’s especially necessary when the clients are elderly people or divyangs,” Ranjan said.


    Vishal Kant works as an associate editor at the Hindustan Times. It follows developments within the Aam Aadmi party and the Delhi government. Vishal has spent around a decade covering city politics and governance, as well as writing about Delhi’s civic issues, urban transport and infrastructure.
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