Context

Self Help Groups (SHG) women working as Business Correspondents for banks (BC Sakhis) and Bank Sakhis are playing a vital role in disbursement of first tranch of ex-gratia of Rs.500/- to women PMJDY accounts amidst COVID-19 Lockdown.

About

• Business Correspondents are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM.
• BCs enable a bank to provide its limited range of banking services at low cost. They hence are instrumental in promoting financial inclusion.
• BCs have to do a variety of functions viz
  • identification of borrowers
  • collection of small value deposit
  • disbursal of small value credit
  • recovery of principal / collection of interest
  • sale of micro insurance/ mutual fund products/ pension products/ other third party products and receipt and delivery of small value remittances/ other payment instruments creating awareness about savings and other products, education and advice on managing money and debt counseling, etc.

Who is a Bank Sakhi?

• A “Bank Sakhi” is someone who has been a member of a self-help group involved in conducting banking and book-keeping activities of the group.
• A Bank Sakhi is someone who has been an SHG member involved in conducting banking and book-keeping activities of the group.
• As a Bank Sakhi, she provides a range of financial services on behalf of the bank to her community and is supported by the local SHG federation which provides capacity development, training, and financial awareness in the community.

Background:

• COVID – 19 pandemic has resulted in a national lockdown leaving a large number of people without access to wages and employment.
• Those worst hit by this unprecedented pandemic and lockdown are daily wage labourers, migrants, homeless, the poor and many who form the floating population.
• The Union Government had announced release of 500/- per month for 3 months in 20.39 Crore Women PMJDY accounts.
• Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM), Ministry of Rural Development was given responsibility to transfer the fund with support of Department of Financial Services and Banks.
• Government of India also released other DBT funds like Rs.2000/- to PM Kisan Yojana accounts, MGNREGA wages payments to all rural population to address the financial stress being faced by the community.
• Due to release of DBT funds, there was expected rush at Bank premises for withdrawal of the amount.
• The instructions regarding withdrawal were already given in advance by many Banks as to how and who can come to the Bank for withdrawal as per last digit of account numbers.
• In most of the cases, the services of BC Sakhis (SHG women working as Business Corresspondents for banks) were utilized for making payments to the rural households.

Conclusion:

Around 8,800 BC Sakhi and 21,600 Bank Sakhi, around 50% of both cadre voluntarily started working amidst Lockdown across the country. They are playing a vital role in ensuring the disbursement of financial relief packages provided by Government of India. Because of them, rural community facing socio-economic distress felt fortunate to have access to banking services at their door step in the unbanked areas through BC Point to meet their daily requirements during the Lockdown period.