Business correspondents take bank to doorsteps of poor

A few years ago, Ramdin Yadav was one among the millions of Indians who do not have a bank account.

The artificial jewellery seller would hide whatever little he earned in the attic of his house, which he felt would keep his money out of the reach of nosy visitors.

But as his earnings increased, Yadav started fearing that his money in the attic would get stolen when he was away.

A friend had told him about the advantages of having a bank account, the interest he would get on deposits, and the overall security attached with banking.

But with no proper identification documents, Yadav could not give this prospect much of a thought.

However, when his neighbours at his home in Dharavi, a central Mumbai slum, told him about the possibility of getting a bank account without needing layers of documents, Yadav jumped at the opportunity.

Today the 33-year-old, who earns about Rs8,000-8,500 per month selling artificial mangalsutras, chains, lockets, earrings and toe rings, has an account in which he deposits whatever he can, sometimes as much as Rs1,000, or else even a small amount like Rs50.

On the other hand, he withdraws anything between Rs100 and Rs900, depending on his requirement. Moreover, he also remits about Rs5,000 each month to his mother in Jaunpur in Uttar Pradesh.

To top it all, Yadav does not have to wait in a serpentine queue at a bank counter as a business correspondent (BC) visits him often with a point of transaction, or PoT, machine, a hand-held device, for carrying out the transactions.

Yadav, who possesses a biometric card carrying his fingerprints, inserts the card in the machine, and with help from the correspondent, carries out his transactions. On completion of the transaction he gets a receipt.

Like Yadav, several people are reaping benefits from this system, which deploys BCs to facilitate banking transactions for people from underprivileged backgrounds who do not have necessary documents, or those who reside in remote areas.

The accounts that are created are ‘no-frills’ ones, requiring no minimum balance and carrying neither chequebooks, passbooks nor ATM cards. It’s only a receipt at the end of transaction which the customers get.

“BCs are helping in reaching the unbanked by acting like banks for people in remote areas,” says TV Srikantha Shenoy, executive trustee, Initiatives for Development Foundation, an NGO , which works in the area of financial inclusion in Tumkur, Karnataka.

Mary Paripoornam is a class 10 pass-out who works as a BC in Dharavi and sees at least 85 customers a day. She says some customers make transactions everyday.

“People mainly make deposits, withdrawals and remit money. The deposits can vary from Rs20, Rs50 to amounts in thousands. And the same goes with withdrawals,” says Paripoornam, who has been a BC since 2007 with Financial Inclusion Network and Operations (Fino), a third-party financial services provider in remote areas.

“Once we get the mandate from banks, BCs are appointed to go the districts and villages, create awareness about the need for banking and engage with potential customers, handle transactions, and sell financial products, says Rishi Gupta, chief financial officer, Fino.

“BCs are also involved with giving loans, making recoveries, micro-insurance, as well as with helping customers make deposits and withdrawals,” says Shenoy, adding that as per the banking policy, Rs10,000 is the maximum limit for transactions in one day.

Gupta says that Fino, which currently has 35 million customers, is aiming to reach about 50 million people by March.