Foot soldiers skip work, future of Jan Dhan Yojana in jeopardy

In what might jeopardise the success of the Narendra Modi-led government’s key financial inclusion schemes such as the Jan Dhan Yojana.

In what might jeopardise the success of the Narendra Modi-led government’s key financial inclusion schemes such as the Jan Dhan Yojana, a recent presentation made before the Prime Minister has revealed that of the 1.27 lakh business correspondents -- the foot soldiers responsible for providing basic banking services to people in far-flung areas of the country -- only 12,000 are active and operational in the field on any given day.

Business correspondents (BC) or Bank Mitr are representatives of banks roped in to provide services such as opening basic bank accounts, cash deposits, cash withdrawals, transfer of funds etc. through handheld devices in areas which do not have access to banking facilities. BCs are seen as key to the success of schemes like the Jan Dhan Yojana, which was launched by the PM last August and laid out an ambitious target of providing universal access to banking services to every household in the country by August 14, 2015.

“Every BC is to be provided with Aadhaar enabled handheld devices to carry out basic banking transactions. But figures provided by the National Payment Corporation of India has revealed that on any given day only 12,000 BCs or 9.4% of them have actually logged into the device for biometric authentication and carried out online transactions,” said a senior government official.

The findings were part of the presentation made at a meeting chaired by Modi on June 18 to review the progress of the Unique Identification or Aadhaar and Direct Benefit Transfer.

Another government official said the findings reveal that though banks have appointed 1.27 lakh BCs, only a small percentage are active and functional on the ground. “This means two things -- most of the BCs exists only on paper and second, banks are yet to provide BCs with authentication facility. Unless this issue is urgently addressed, it can end up jeopardising ambitious financial inclusion schemes.”

The official added that in February, the department of financial services (DFS) had instructed banks across the country to provide Aadhaar-enabled biometric authentication facilities to BCs. “The idea is to ensure that BCs mark their attendance on their handheld devices. But it seems on the ground DFS instructions have not been followed.”

Banks engage retired bank employees, teachers, government employees, individual owners of kirana or medical shops, agents of small savings schemes or insurance as BCs on a minimum compensation of Rs 5,000. Earlier they were engaged on a commission basis. The concept of engaging these correspondents was started by the government first in 2006.

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