“Din ka kamaaya, shaam ko khaaya,” said Raghuveer Meghwal, when asked whether people in his predominantly tribal area in the Peepla panchayat in south Rajasthan had enough money during the lockdown. They earn in the morning and spend it in the evening.

As a sub-agent for a registered “banking correspondent” for Yes Bank, Meghwal works with migrant families and daily-wage earners who have been severely hurt by the lockdown to contain the spread of Covid-19. Since early April, he and the region’s hundreds of other banking correspondents have functioned as essential workers helping people in impoverished rural communities in Rajasthan access their bank accounts at their doorsteps – and offering a patient ear to their anxieties.

Three weeks ago, when word began to spread that the government was transferring cash to Indians under a variety of schemes to help them cope with the pandemic, families who know Meghwal have been phoning him incessantly and gathering at his home. Their panchayat is nearly 35 kilometres away from the nearest bank branch. With transport banned during lockdown, many people have no way of accessing their own accounts. As a result, banking correspondents (who are also known as business correspondents) have provided essential services such as cash withdrawals and balance inquiries.

In rural locations such as Gogunda block in which Meghwal works, the population of over 2.5 lakh people is served by only five bank branches. Banks in these areas simply do not have the capacity to manage their large number of clients, resulting in over-crowding and serpentine queues outside branches. That’s where people like Meghwal come in. Banking correspondents are authorised to act on behalf of banks in order to open accounts, help people deposit and withdraw money and make balance inquiries. Corporate banking correspondents may also appoint sub-agents (often referred to as retailers) to enhance the reach of financial services for excluded communities.

Cash transfers

Since the lockdown, government cash transfers have been announced under various schemes – for families who are Below-the-Poverty-Line, for women under the Jan Dhan Yojana, for registered construction workers. There have also been advance credits of pensions for widows and old-age pensions, subsidies under the Ujjwala scheme for gas cylinders and many more.

Conversations with 20 retail agents in the area indicate that a large number of their customers have received some form of transfer – the minimum amount being Rs 500 and the maximum being Rs 4,000. Several civil society organisations have also made unconditional cash transfers to migrants’ bank accounts to help their families sustain themselves through the lockdown.

A banking correspondent at work.

Retail agents have been playing a central role in helping them access these funds. For customers whose bank accounts are linked to their Aadhaar cards, retailers use the Aadhaar-enabled Payment System to process withdrawals. This requires a smart phone with an internet connection and a biometric device. From the rural customer’s point of view, it is convenient since they need not remember bank account numbers to withdraw cash – just the name of the bank and a biometric authentication is sufficient.

Pavan Singh, a sub-agent of a banking correspondent in the area said that demand for his services has gone up nearly four times over the past three weeks. Before the lockdown, he used to process 15-20 cash withdrawals each day; Now he provides cash out services to 80-90 people a day.

Other agents in the area say that the demand for cash has doubled. Singh said that the uncertainty around the pandemic is causing even relatively well-off families to withdraw as much cash as they can. However, he has been trying his best to keep everyone’s collective interests in mind. Before processing a withdrawal, he tries to understand the customer’s needs and counsels them on how much they should withdraw. He advises panic-ridden customers to withdraw a maximum of Rs 1,000-Rs 1,500 at a time so that there is enough cash for everyone. He then assures them that he will make another trip to their village soon enough to help them withdraw more money..

Singh is among the few retailers who voluntarily began providing doorstep cash withdrawal services in the rural areas of Gogunda block. He begins his day at 7 am, helping people withdraw cash at his father’s grocery store in Kamol village. Once the store downs its shutters at 11 am, he hops on his motorcycle and begins work in remote hamlets. His day only ends around 8 or 9 in the night. “Kuch bhi mehsus karne ka samay nahi milta,” he said. There is no time to feel anything.

A deep sense of purpose

Nisha Gehlot, a banking correspondent of the State Bank of India, does the same. Every morning, she spends four hours at her e-mitra shop, which has a computer that helps citizens access government schemes via the internet. After that, she visits villages that are most in need. Gehlot serves around 100 customers a day – 50 at her shop in the main Gogunda tehsil area and another 50 in hamlets. She processes transactions amounting to nearly Rs 3 lakh a day.

Retailers like Meghwal, Singh and Gehlot said they were driven by a deep sense of purpose and a need to serve their communities. They have connections with the community that go far beyond just providing banking services. Gehlot, for instance. regularly volunteers at the government school where her husband is a teacher. Meghwal’s brother is a panchayat helper. In addition to cash services, they have also assumed the role of counsellors for various families in distress.

Asked why more retailers aren’t willing to offer doorstep services during the lockdown, all three of them agree that cost is a big factor and that people without a broader sense of community service are unlikely to do what is required.

Nisha Gehlot helps a customer make a transaction.

For small ticket withdrawals, sub-agents like Meghwal earn only Rs 2 per transaction or a maximum of Rs 150-Rs 160 a day. But during lockdown, his costs have gone up.

Gehlot said that she takes twice as long to service each customer now. There is panic about an uncertain future with no work and no incomes and people need to be comforted before a transaction is processed. One of Meghwal’s customers is an elderly widowed woman with no family and Meghwal is the only person she talks to about her fears.

Singh adds that new safety protocols also add to the cost – he sanitises his biometric device each time a withdrawal is made, waits for one minute and then takes the next customer. He also helps customers wash their hands properly with soap after each transaction.

The increase in the number of transactions requires Meghwal to visit his bank branch every day as opposed to the earlier frequency of once in three or days. This significantly increases his expenses, since he lives 35 kilometres away from the nearest bank. This also limits his ability to offer doorstep services beyond a radius of 2 km or 3 km.

Singh is also able to offer services only within a 7-km radius. In addition to cost considerations, he says, often they need arbitrary permissions from local panchayats to cross over and offer these services in other panchayats. While Singh complains about the fact that he can’t travel further, he keeps his spirits up by reminding himself that the nearest bank branch is over 12 km away and he helps at least 80 people a day, saving them the long walk in the scorching summer heat.

Providing incentives

The Business Correspondents Federation of India reported that only 30% of all rural banking correspondents have been active during the lockdown. One way for banks to reactivate dormant correspondents, some of whom are low on cash, is by swiftly extending overdraft facilities to agents. Further, providing fixed monthly incomes will help banking correspondents cover the extra costs incurred during the lockdown and to extend their services even in remote locations. The federation has already requested that agents should be given Rs 5,000 for three months. Some institutions such as Bank of Baroda have announced a one-time additional support of Rs 2,000 per agent to cover the costs of masks, sanitiser and soap and an additional incentive of Rs 100 per day for transportation costs.

Further, the burden of risks borne by these agents must be shared. Indian Bank announced life insurance and personal accident insurance for over 9,000 of its banking correspondents, but often sub-agents appointed by corporate banking correspondents get left out. In volatile areas where the risk of theft of cash during transit is high, banks and insurance companies must find a way to offer some cushion to retail agents, which is currently not covered by most insurance policies.

Despite the challenges, banking correspondents like Gehlot said they were determined to carry on.“Yeh hamaari zimmedari hai,” she said. This is our responsibility. “If we don’t help people at this time, who else will?”

Rupal Kulkarni is the CEO of Shram Sarathi, which works on financial inclusion of seasonal labour migrants. His Twitter handle is @Shram_Sarathi.