BackFinmin backs more women as banking correspondents
Govt wants to increase proportion of women banking correspondents from 10% to 30%
PremiumNEW DELHI :
The government plans to raise the number of female business correspondents (BCs) to a third of the total number by 2027 to get more women to participate in the country’s financial system.
Women are considered better managers of household finances, and increasing the number of women BCs is expected to channel this skill into improved financial planning, participation in savings instruments and other financial products, and help them become financially independent, two people privy to discussions on the matter said.
They said the department of financial services is working out a plan to raise the numbers of BCs from less than 10% to over 30% over the next three years, and a roadmap on this would be part of an action plan for public sector banks in the upcoming Union budget.
A BC is an extended arm of a bank branch, providing doorstep banking and financial services to customers in remote areas. As of FY22, there were 1.32 million BCs, compared with 1.13 million in FY21 and 730,000 in FY20. But fewer than 10% of these are women. The gender gap is even bigger for BCs assigned to service Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts.
“Women are key to deepening the goals of financial inclusion besides providing financial service providers additional revenue potential to the tune of $700 billion globally. The programme to raise the number of BCs is designed to plug the gap and bring more women into the country’s financial system," said a government official privy to the development.
The finance ministry and the department of financial services (DFS) did not respond to queries on raising female BC numbers till the time of going to press.
The people cited above said the DFS constituted a committee late last year, which has accepted the recommendation to raise the number of women BCs to over 30% by 2027. State Bank of India, the country’s largest lender, has also given its nod to the exercise that would largely go into channelizing women BCs into servicing women Jan Dhan account holders.
According to government estimates, on 10 August, there were 463 million PMJDY account holders, of whom 55.6% (257 million) are women, and 66.8% (309 million) in rural and semi-urban areas would require to be serviced by BCs.
“Even though 56% of bank account holders are women, just about 8-10% of women BCs are servicing these women customers. There is an urgent need to have more women agents as only these could help in bringing this important segment into the financial system quickly. Our surveys indicate that the need for financial instruments for the family is greater among women. So, raising BC numbers to 30% should be a starting point," said Kalpana Ajayan, regional head for South Asia, Women’s World Banking (WWB), an international non-profit organization that was part of the DFS committee on BCs.
Officials aware of the development said that DFS, through the Indian Banks’ Association, has already told public sector banks to focus on raising women BCs and draw out a roadmap at an individual level. A formal timeline would be spelt out in the Budget.
As per industry studies, banking agents are the building blocks of the financial ecosystem, and women BCs are an important element of it as they bring with them transparency, the patience needed to make customers understand a financial product, and develop better understanding and rapport with female customers who tend to be more willing to share issues of family finances with women BCs.
Also, women BCs are more likely to serve the underserved, especially in remote areas, encourage savings among women, and are considered less susceptible to malpractices.
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