India needs 2,00,000 Bank Sakhis!

December 2021


Results from the National Family Health Survey Round 5 2019-21 are out, further validating India’s phenomenal progress in financial inclusion – 77.4% of rural Indian women reported having a bank or savings account that they themselves use, this compares to 48.5% in 2015-16 and 10.7% in 2005-06. Of course, even though coverage is high, usage by most women continues to be sporadic at best. 

It is not just bank accounts, women, on the whole, are not well poised to take advantage of India’s digital payment revolution – for instance the NFHS data also reveal that only 46.6% of rural women have a mobile phone they use themselves, the majority either borrow from family members or friends, or don’t have any access at all.

It is evident that even after that first step of providing bank accounts and mobile phones, there is a lot more to be done. Jamie Anderson, Gerhard Coetzee and Max Mattern from CGAP have brought out an excellent slide deck with insights on the constraints faced by women in rural and farm livelihoods globally.

One of the solutions proposed in the deck is increasing the presence of women banking agents or Bank Sakhis. India’s policy through the National Rural Livelihood Mission aims at one Bank Sakhi for one gram panchayat by 2023-24. Till now the initiative has trained around 56,000 women and there are more than 2,00,000 gram panchayats to cover. 

While the exact number of women banking agents are not known for the country, Madhya Pradesh SLBC recently reported just 6% of its 20,000 agents are women. This is a big problem - greater number of women agents are critical in easing women’s access into the formal banking channels. 

There are many gender issues that confront India which can easily be circumvented in the financial inclusion domain through women banking agents, and policy also recognises this. However, both implementation and regulation need to be in sync with policy, so the criteria set by the RBI for agents must be gender-sensitive. For instance, completion of 10th standard schooling is mandatory for banking agents. But the role of a Bank Sakhi is a very simple one and does not require that much schooling. More importantly, a very small percentage of women in rural hinterlands have crossed the 10th standard. And naturally therefore, this criterion is already proving to be a tight constraint for onboarding women in some areas, which are already underserved.

Traditionally, women have been the main customers of the Microfinance sector in India. Anantha, Laveesh and I have brought out a White Paper looking at the new regulatory proposals in RBI’s Consultative Document. Four key issues were taken up in-depth - determination of household income, interest rates charged to the borrower, transparency and disclosure to borrowers and the involvement or interference of state governments in Microfinance. Our conclusion is that the onus of sustainable growth and borrower protection lie on the industry, just as much as on the regulators. A little maturity on part of the industry would remove the need for many constraining policies and regulations. Do read the paper and give us your feedback, thanks.

Another sector which has become a concern this past year is digital lending. Our White Paper on Digital Lending Issues has several suggestions for all the players in the ecosystem, concluding that the main responsibility lies with the NBFCs and the commercial banks to play fair and protect their borrowers. Commendably, the RBI has put together a report after extensive engagement with industry among other stakeholders. The RBI Working Group report  released recently contains 26 recommendations and 17 suggestions for future examination and we are glad that some of our key recommendations have been included there as well.


Do follow our  Indicus Centre for Financial Inclusion page on Linkedin to continue the conversation. Read on here for more of the latest news and views on financial inclusion in India.

•     In its Statement on Developmental and Regulatory Policies on 8th December, the RBI has announced excellent measures to increase adoption of UPI in India, through feature phones, a simpler process flow for small value transaction, increasing limit for retail investors etc. A discussion paper has also been promised, within a month on the charges for payments systems.
•     The Niti Aayog has a Discussion Paper – Digital Banks: A proposal for licensing and regulatory regime for India – aimed at new banking models for financial inclusion, comments are invited from the public by 31st December.
•     The RBI launched Integrated Ombudsman Scheme, 2021. The Scheme integrates the existing three Ombudsman schemes of RBI namely, (i) the Banking Ombudsman Scheme, 2006; (ii) the Ombudsman Scheme for Non-Banking Financial Companies, 2018; and (iii) the Ombudsman Scheme for Digital Transactions, 2019. It will no longer be necessary for a complainant to identify under which scheme he/she should file complaint with the Ombudsman.
•     Manasvi Aiyer and Beni Chugh of Dvara Research have a neat paper out on the challenge of consent in digital financial services, with many useful suggestions to make the experience user-friendly and authentic.
•    Prince Jain has narrated the evolution of PIX, Brazil’s domestic instant payments system, developed looking at India’s successful UPI.
•     WhatsApp Pay plans for accelerated adoption of UPI to cover the next 500 million Indians.
•     The CII Foundation’s E-Vidya project in Uttar Pradesh and Rajasthan works to improve digital financial literacy amongst the women ; interestingly 89% of the surveyed women had a bank account in their name, only 33% knew about GPay and just 9% had used it.
•     Anurodh Giri, Arshi Aadil and Damini Mohan of MSC have developed a framework for designing user-centric social protection programmes

Editor: The Indicus Centre for Financial Inclusion was launched in 2011 to distil and disseminate information on accelerating the poor’s access to high-quality financial services. ©Indicus Centre for Financial Inclusion. All rights reserved. 4thJanuary 2019

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