Department of Rural Development

Government Of Uttar Pradesh


People in rural hinterland often travel to the bank branches in nearby towns to access their fund or update information of their bank accounts which leads to increased cost in accessing the financial services. It has been observed that rural women often rely on relatives, or friends for carrying out banking transactions. Further, poor often suffer from congestion of intermediaries. Many a times, these intermediaries promise to add value to the trail of business transaction in favour of the poor. Despite advancement of technology and banking penetration, there is scope for improvement of banking services of rural residents in India.  

It is in this context that Reserve Bank of India (RBI) issued guidelines for engagement of Banking Correspondent (BC) Sakhis (Women Banking agents) for providing banking and financial services at doorstep at rural areas. In line with these guidelines Government of Uttar Pradesh (GoUP), adopted the BC Sakhi Program, or Mission One Gram Panchayat, One BC Sakhi, with the aim to train and certify women members of Self-Help Groups (SHGs- concept has been one of the largest women-focused credit and savings program that seeks to improve women role and position in financial decisions). BC Sakhis are then able to provide banking services to areas without physical bank branches.

The program provides an amount of ₹4,000 per month for six months to help the BC Sakhis stabilise their banking service business. As business proceeds, the BC Sakhis are paid a commission based on the amount of transactions they make, which is generally 0.20%-0.32% of the amount transacted. The potential women SHG members are trained on the BC module at the district level at Rural Self Employment Training Institutes (RSETIs) or other selected places. RSETIs already have a six-day course on Training of Banking Correspondent, which has been notified by Ministry of Rural Development (MoRD), Government of India. Each batch of trainees receives training inputs of six days.

In Uttar Pradesh, the program was launched in May 2020 amidst lockdown of COVID19 Pandemic with the goal of creating 58,000 BC Sakhis. Presently, the state has 38,435 BC Sakhis operational, trained and certified by Indian Institute of Banking & Finance (IIBF). The model in Uttar Pradesh has proven to be cost effective and sustainable mechanism for delivery of financial services to under-banked and un-banked sections of the society. .

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Collaboration & leverage

For the first time in India, banking entities partnered with a Government scheme within the corners of program-mandates. Uttar Pradesh State Rural Livelihoods Mission (UPSRLM), the nodal entity of Department of Rural Development, Govt. of Uttar Pradesh entered into deliverable-defined arrangements with six banking partners, each duly regulated by Reserved Bank of India (RBI), BC Sakhis as banking agents operating on Unified Payment Interface (UPI) system of National Payment Corporation of India (NPCI). This set-up a formidable premise for both Govt. and Banks to oversee operating performance of the BC Sakhis. The perspective of the Government has been to track penetration of banking services to (a) the unbanked segment, especially women and weaker sections of the rural demography and (b) optimum coverage of such customers in respective GPs. The collaboration just not has set institutional interface, rather, did open an option for respective technologies to integrate and revisit outcome-led performance parameters from the angle of low-ticket banking businesses.

While the banks leveraging upon State’s policy push and financial incentives tapped into the underbanked segment, a lean-space for conventional banks, the government mustered an array of digital records with time-stamps to inform its decision-making assumptions. Such as governing intel has set a premise for the State Government to advance the program to its next logical state, version 2.0

Governing intel & program learning

Centrality of the program-monitoring has been two overlapping aspects _ Operational progress and BC Sakhi Performance. A chain of processes tracked on real-time helped high-frequency monitoring. BC Sakhi performances tracked around few input-pointers _ number of working days, number transaction conducted for each working-days and type of banking products. These provided a clear picture of transaction volumes on weekly & monthly basis and consequently the BC Commission generated to support BC Sakhi business. This approach to monitoring has been typical and predictable.

The other pointers following the suit of functional capacity of the BC Sakhi on digital devices are e.g constant feedback on screen- & pageviews of the digital apps, helped the Govt. understand pace of penetration of technology and suitability thereof. User-behaviour through the digital transactions provided keen insights on the program dynamics on the ground.