Bank Mitras: How Agents of Financial Inclusion were Neglected During the Pandemic

Having helped to provide digital financial services in unbanked or under-banked areas for years, with the banking industry reeling under the pressure of COVID-19-induced challenges since March, its force of outreach agents feel neglected.

Known as bank correspondents, or more colloquially as bank mitras, the all-outsourced workforce enjoys a job profile not dissimilar to that of a regular bank employee: assisting in opening bank accounts, specifically under the Pradhan Mantri Jan Dhan Yojana (PMJDY) or ensuring access to banking services, notably in areas without branches or ATMs.

Their work is significant for achieving financial inclusion across the country, even more so when lockdown-triggered restrictions over movement made individual visits to bank branches difficult.

Quite naturally then, efforts put in by the 8.5 lakh odd bank mitras in recent months drew appreciation, including from Finance Minister Nirmala Sitharaman herself. However, her words were not accompanied by any concrete measures directed towards improving their employment conditions.

The correspondents continue to work without defined working provisions and with inadequate remuneration, a fact noted by the All India Bank Employees’ Association (AIBEA) in a letter addressed to the chief executive of the Indian Banks’ Association, a body representing 35 lenders.

“Since the corona pandemic continues and the lockdown restrictions also continue, their (bank correspondents) problems are getting aggravated day by day. It is imperative that IBA and Bank managements look into their problems with sympathy and empathy and issue some guidelines (sic),” the bank union said in its letter dated August 13.

C.H. Venkatachalam, general secretary, AIBEA, told NewsClick that the bank correspondents are bereft of fixed monthly wages and social security, despite them delivering the same services as any other bank employee.

“The correspondents are outsourced to other private companies, which allows bank managements to evade their responsibilities towards an employee. The prevailing labour arrangement results in banking services reaching the remotest areas, but without the extension of decent working conditions to those who make it possible,” he said.

Bank managements usually enter into a contract with retail agents, also known as business correspondents, who either employ the mitras or further sub-contract their recruitment to private agencies.

Calling this “inhuman”, Venkatachalam demanded that bankers directly engage with the correspondents, ensuring regular payment, leave benefits and insurance cover to them.

Earlier, the Business Correspondent Federation of India (BCFI), an industry body representing business correspondents, sought the intervention of the Finance Ministry and the Reserve Bank of India (RBI) in providing relief to its agents.

“The income of the BC (business correspondent) agent shall come down drastically from the current month, which would distract the focus on digital banking service delivery and affect the strong control environment built over the years,” the body told the Reserve Bank of India in a letter in July, according to The Economic Times.

The federation also noted that bank incentives, which were linked to the COVID-19 situation, also came to an end in the month of June, translating into an income crunch for the bank correspondents.

Seema Prem of BCFI, also a co-founder of FIA Technology Services, told NewsClick that many banks had announced incentives for the correspondents over and above their monthly remuneration. However, she said that only some of them have now extended it till September, as opposed to the federations’ demand of extending the incentives till December.

The incentives also varied from bank to bank, she added. “Some banks even provided the correspondents with transportation allowances, while others ensured their adequate protection by providing sanitisers and masks,” she said.

Col. Sunil Kumar, the CEO of BCFI, told NewsClick that transactions have taken a hit during the lockdown, which would affect the income of the outreach agents. The federation had urged the government to provide a monetary support of Rs 5,000 along with an insurance cover, he said.

In March, days after the announcement of a countrywide lockdown, Finance Minister Nirmala Sitharaman took to Twitter to “appreciate” the services of bank correspondents across the country.

However, commending the bank correspondents is not enough when their issues are not been heard, Venkatachalam said. “We are looking to organise them and launch a sustained campaign in the coming days with their demands,” he added.