Bank Sakhi Model: A Guide for 2024

The World Bank and the Government of India's National Rural Livelihood Missions collaborated in 2016 to introduce the Bank Sakhi initiative, which aims to educate female members of self-help groups (SHGs) to become banking representatives.

By growing agent networks and supporting the digitalization of financial transactions between SHGs and their members, the program aims to provide formal financial access for a large number of rural women while also promoting digital financial services in rural areas. Giving them access to chances for employment also aims to empower women who work as agents.

What is the Bank Sakhi Model?

The Bank Sakhi Model is part of India's larger project to promote financial inclusion, mainly through programs like the numerous state-level livelihood missions and the National Rural Livelihoods Mission (NRLM). It involves training women in self-help groups (SHGs) to become bank correspondents, or Sakhis.

These ladies assist in the facilitation of banking services, which include creating bank accounts, making deposits, taking out cash, and granting access to government programs.

In remote areas with little to no banking infrastructure, Bank Sakhis acts as the public face of official banking. They facilitate financial transactions at rural households' doorsteps by utilizing digital tools, including point-of-sale systems and micro-ATMs.

Need for Bank Sakhi

Along with the demand for SHG-bank links, the number of SHGs in India has grown significantly since the introduction of NRLM. However, due to staffing shortages, rural bank branches find it challenging to assist Self-Help Group (SHG) members. Many of them need more formal education and hence need help with financial transactions and duties like creating accounts or making deposits, which results in lengthy waits and repeated trips.

States like Andhra Pradesh, Odisha, Bihar, and Tamil Nadu are using the 'Bank Sakhi' model to address this issue. By helping SHGs with transactions, paperwork, and loan collection, a Bank Sakhi—who has received basic banking training—lightens the burden on banks. It has been suggested that SRLMS use this concept across the country to enhance financial inclusion under NRLM.

Training and Providing for the Bank Sakhis

More than 100,000 women from 20 states have received training to become bankers, and they are armed with cell phones and micro-ATMs. These women play a crucial role in improving digital literacy in rural India by facilitating safe digital transactions and educating their communities about the advantages of digital payments.

Madhya Pradesh, Odisha, and Bihar are the most affected states, and they need Bank Sakhi. Particularly noteworthy has been the Bank Sakhi program's effectiveness in these places. To raise awareness and provide doorstep access to financial services during the pandemic, Bank Sakhis played a crucial role in enabling the digital transmission of COVID-19 aid packages. More than 200 million women who had PMJDY accounts profited greatly from this program, underscoring Bank Sakhis's commitment to advancing financial inclusion in difficult times.

Recognition on a national scale and the path ahead for Bank Sakhi:

Aiming to encourage digital transactions in 50,000-gram panchayats, the 'Samarth Campaign' highlights the critical role that Bank Sakhis plays in India's digital financial inclusion. They are essential to paving the way for a better future for rural India with continued assistance and advancements. This program has enormous potential and might serve as a model for other countries aiming to empower women and achieve digital financial inclusion.

The Bank Sakhis acts as a change agent in rural India, not just an intermediary for digital transactions. Their initiatives to improve financial literacy, close the digital divide, and encourage women's empowerment are vital. The role of Bank Sakhis will become increasingly crucial as India moves forward with its goal of greater digital inclusion since it represents the principles of empowerment and inclusive growth.

Bank Sakhi eligibility:

  • Membership in a Self-Help Group (SHG): The candidate must have participated actively in a self-help group for at least a full year. This criterion guarantees that the applicant has had sufficient exposure to the financial operations and social dynamics typical of self-help groups.

  • Bank Sakhi Age Requirements: A Bank Sakhi should be between the ages of 22 and 45. This requirement ensures that the applicants are both youthful enough to be flexible and capable of adjusting to new procedures and technology and mature enough to meet the duties of the position.

  • Educational requirements for Bank Sakhi: Candidates must pass the eighth or tenth grade, and literacy is preferred. This requirement is essential since the position necessitates proficient reading and writing abilities to handle banking transactions and associated paperwork effectively.

  • Community Representative: Rather than representing the bank, Bank Sakhi ought to represent her community. This element is essential because it emphasizes how Bank Sakhi serves as a liaison between the rural community and the banking industry, guaranteeing that the services are customized to the unique requirements and conditions of the community.

Responsibilities in the Bank Sakhi Model

Bank Sakhi's key duties are as follows:

  • The bank Sakhi should assist the SHGs in the following areas whenever SHG leaders or members go to the bank to deposit or withdraw money:

1. Completing bank challans and transaction papers

2. Accounting for cash by separating it by denomination

  • When SHG leaders or members come to the bank for connection, Bank Sakhi needs to assist the SHGs in the following ways:

1. Completing the paperwork required to open an account and submit a loan application

2. Opening of each member's personal bank account

3. Assisting SHGs in seeking more financial help from banks.

4. Aadhar seeding

5. Mobile seeding

  • As a trainer, Bank Sakhi ought to:

1. Inform SHGs about credit linking, loan terms and circumstances, such as interest rates, repayment plans, and interest subsidies.

2. Inform the group members of the bank's policies as well as other initiatives and programs.

3. Insurance

4. Pension

5. Remittances

  • Additionally, Bank Sakhi ought to support the bank linkage subcommittee in the following ways:

1. Upkeep of SHG bank connection information

2. Helping VOs oversee the SHG's bank repayment

3. Bank collection of past-due statements

Honorarium payment to Bank Sakhis:

Resource people known as "Bank Sakhis" collaborate with village organizations (VOs) and cluster-level federations (CLFs), two types of community-based organizations (CBOs). The CBOs they collaborate with ought to cover their honoraria, not the mission units.

According to CBOs, all Bank Sakhis should receive payment for the days they labor. Nonetheless, the State Rural Livelihood Mission (SRLM) might offer short-term funding assistance to cover a portion of the honorarium expenses if CBOs don't initially have enough money. Payment for this help ought to go via the CBOs rather than to specific Bank Sakhis.

Bank Sakhis may be compensated from the following sources:

  • Interest earnings

  • Service fees from bank linkages

  • Project support (for a limited time)

  • Payments from banks

Overcoming challenges and developing a sustainable model:

Bank Sakhis has achieved success, but there is still a long way to go. Less than ten percent of the BC network as a whole frequently needs help with issues related to safety and mobility, limited resources, and juggling many responsibilities. Strategies, including social security benefits, travel insurance, liquidity support, and resolving technical problems with banking infrastructure, are crucial if they are to continue to be effective.

Differences between Bank Sakhi, BC Sakhi, and Bank Mitra:

  • Bank Sakhi: An employee of a Self-Help Group (SHG) who works at a bank branch and supports the Branch Manager in duties such as loan facilitation, recovery for SHG members, and documentation. She doesn't, however, handle money matters.

  • BC Sakhi: A field-based SHG member who uses a laptop, desktop, mobile device, or tablet to conduct financial transactions.

  • Bank Mitra: A term used by banks and the Department of Financial Services (DFS) for existing Business Correspondent (BC) agents who operate within the banking system.

BC Sakhis are also known as Bank Sakhis in several states, such as Bihar, MP, and Chhattisgarh. In a few instances, Bank Sakhis branches are referred to as Bank Mitras.

Digipay Sakhi Scheme:

DAY-NRLM and CSC e-Governance India Ltd., in collaboration with the Ministry of Information and Technology, signed a memorandum of understanding (MoU) to engage women SHG members as 'DigiPay Sakhi.' The goal of this project is to improve financial services and door-to-door digital banking.

According to the MoU, SHG members can use the DigiPay app on their mobile phones to access essential banking services with a single fingerprint device provided by CSC e-Governance India Ltd.

The DigiPay Sakhis also offer the rural communities doorstep payment options for MGNREGA and other Direct Benefit Transfer (DBT) subsidies.

Conclusion

The Bank Sakhi Model is an excellent approach for promoting financial inclusion, particularly in rural India. Women's empowerment as banking correspondents not only increases accessibility to necessary financial services but also stimulates local economic growth. The strategy can transform the way rural communities engage with formal financial systems, empowering women as they join the movement.

Additional Read:

A Comprehensive Guide to the to the Jyoti Gramodyog Vikas Yojana in 2024

Everything to know about the MSME Receivable Finance Scheme

Know the Future of MSME with MSME SAMBANDH

A Comprehensive Guide to the Shri Vajpayee Bankable Yojana for Entrepreneurs

Mukhyamantri Udyam Kranti Yojana 2024: Eligibility, Benefits and Online Apply
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