agent s of f i nanc i a l i nc lu s i on
55
maximum of 360 CSPs out of those earlier surveyed were
no longer agents.
The median BC agent in India during the 2013 survey
was found to have conducted only nine transactions per
day. 16 per cent of those CSPs who could be reached
had not done a single transaction till the time of the
survey. This had increased from 5 per cent reported in
the previous year. It was found that the remuneration
for the CSPs remained low and near the minimum wage
with the median agent earning only Rs. 2,700 per month
reflecting no change as compared to the 2012 position.
Besides only 48 per cent (602/1254 CSPs) had the tech-
nical capability that allowed clients to transact at other
CSPs, down from 65 per cent in 2012.
Thus though CSPs were more experienced and there
were some positive outliers, even after eight years of BC
guidelines aggregate signs pointed to stagnation from
2012 to 2013 with low level of client use, low level of
CSP compensation, strong evidence of viability problems
in bank-led BC deployments. In the push into rural areas
geographical targets were met but banking activity was
found to be low. There was little evidence that the pres-
ent trajectory would contribute significantly to financial
inclusion or financial sector development.
The FII Tracker study referred to in Chapter 1 (FII,
2014) also raised the question of trust in BCs on the part
of clients (Box 3.1). The data showed that only 3 per
cent of account holders fully trust BCs, but also that 48
per cent were not properly aware of these services. The
findings reinforce findings discussed earlier and show
major shortcomings in the existing network of agent
banking. In this context, quoting a Senior Programme
Officer with the Bill and Melinda Gates Foundation,
Singh and Sasi (2014) state that the mandate for banks to
open a minimum number of accounts in poor and rural
areas has led to ‘card rampages’, with banks aggressively
opening accounts to meet targets but investing little in
high-quality agent networks. It therefore remains to be
seenhow the account opening drive launchedwith the new
financial inclusion mission will be qualitatively different.
The Sa-dhan study in particular had recommended the
involvement of MFIs
4
as also a role for SHG federations
B
OX
3.1
Level of Trust in BCs Low
By March 2014 according to official RBI statistics there were BCs or agents in 337,678 villages. Nevertheless the FII India Tracker
Survey shows that not only are levels of trust in BCs low, but a large number of ‘don’t know/refused’ responses relate to a lack of
awareness about these services. Low levels of trust and awareness of the BC model may also be related to a high turnover in agents,
leading to a sporadic and interrupted connection with customers.
Level of trust in BCs
Type of response
% of responses
Do not know/refused
48
Do not trust at all
18
Rather do not trust
14
Neither trust nor distrust
7
Rather trust
9
Fully trust
3
Total
100
Source
: InterMedia India FII Tracker Survey (
N
= 45,024, 15+) October 2013–January 2014. Further, BCs were not a common
point of access for bank account holders. Only 0.2 per cent of rural, active bank-account holders* accessed their accounts, through
an agent or business correspondent. Most in this group of rural, active bank-account holders said their preferred method of
accessing their account was at a bank branch (82 per cent) and 18 per cent chose ATMs because they are ‘safe’, and safety is
preferred over ‘easy’ or ‘fast’ access. Along with increasing awareness about BCs and the banking services they can offer, banks will
need to invest in building trust for these services among low-income and rural segments.
Source
: Adapted from Murthy (2014)
Note
: *An individual who has a registered bank account and has used it during the past 90 days.
