Slow Aadhaar registration hinders direct benefit transfers

This came to light at a state-level review meeting of a bank recently.

Reserve Bank of India regional director Sudarshan Sen also pointed to a “significant lack of financial literacy” not only among the general public but also among a number of business correspondents (BCs) hired by banks to cover unbanked rural areas.

A business correspondent is a person who moves through the rural areas,where no bank operates with a hand-held device like a laptop,carrying data of customers with an online connection with his bank. As soon as he makes an entry,it gets reflected in his device in real time.

Sen noted that a lack of financial literacy was found not only in members of the general public,but also among BCs “as they are equally unaware of the basics about the savings accounts. He told controllers of banks to take a note of this and highlight rights of customers by holding monthly meetings for every rural branch and try to learn about their expectations from the system.

Banks rely on BC mechanism to deliver financial services as part of the financial inclusion plan. He noted that despite such reliance on BCs,branch managers barely have much idea about what a BC is supposed to be do. “This lack of control over BC is detrimental to the image of the banks,” he added.

Regarding implementation of financial inclusion plan in villages,with population of less than 2,000,Sen said the pace of opening new accounts should be increased. A major problem was that in many places,BCs were still to be provided with hand-held devices.