Bank Sakhi’s: Transforming Rural India with Digital Payment Adoption

An exploration of the significance of Bank Sakhi’s in advancing digital financial inclusion in India. In August 2023, India’s Unified Payments Interface (UPI) reached a significant milestone by processing 10 billion transactions. Not with standing this remarkable growth, a rural-urban disparity still persists within the digital payment landscape. The regional disparities observed during the Covid-19 pandemic underscore the critical role of female banking correspondents in bridging this divide and further unleashing India’s digital payments potential.

Bank Sakhi’s : Driving Digital Payments in Rural India.

Bank Sakhi’s is transforming rural india with Digital Payment Adoption. The Bank Sakhi’s model introduced in 2015-16. It is a transformative approach to rural banking in India supported by the National Rural Livelihood Mission (NRLM) and the World Bank. It has gained significant traction involving female Banking or Business Correspondents (BCs) who belong to self-help groups. These women bring essential banking services to areas lacking physical bank branches.

The decision to deploy women as BCs was well-thought-out. Considering that more than half of the Pradhan Mantri Jan Dhan Yojana (PMJDY) account holders in rural and semi-urban regions are women. However, the majority of BC agents were men, creating a disconnect to address this issue. The Bank Sakhi’s Programme was initiated to assist first-time women customers in navigating the often complex world of banking.


Since its inception, more than 1,00,000 women have been trained to act as intermediaries for both public and private banks in 20 states. Armed with cutting-edge technology like Micro-ATM devices and smartphones. These women facilitate secure digital transactions on behalf of their customers.

In addition to offering traditional financial services, Bank Sakhi’s also play a vital role in educating their customers about the advantages of digital payments by providing training on digital payment platforms and resolving any issues that may arise during transactions.

Bihar & Odisha Experiences

The success of Bank Sakhi’s has been particularly noteworthy in low-income states like Bihar, Odisha and Madhya Pradesh. Research by the Asia Competitiveness Institute highlights Bank Sakhi’s pivotal role in advancing digital payments in these states.

These less digitally competitive states saw a pandemic-driven surge in digital transactions, largely due to the effective Bank Sakhi program. In Bihar, 33 of 40 Bank Sakhi’s conducted daily transactions, and in Odisha, 90 of 126 did the same.

Key In COVID-19 Relief Digital Transfers

During pandemic lockdowns, SHG members turned Bank Sakhi’s played a vital role in raising awareness and facilitating doorstep cash transfers. This collective effort ensured that over 200 million women account holders in the Pradhan Mantri Jan Dhan Yojana (PMJDY) received Rs 1500 each distributed over three months.

As a strategic measure to mitigate leakages within the Direct Benefit Transfer scheme, the Indian government adopted digital transfers to direct funds into Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts. Recognizing BC agents’ role in digital awareness, the government issued “Lockdown Passes” to Bank Sakhis for seamless banking services during lockdowns.

Challenges in Expanding Bank Sakhi’s Network

While the number of female Business Correspondents (BCs) has grown in India, their representation remains alarmingly low, accounting for less than 10 percent of the total BC network as of April 2022. To address this disparity, the ‘One Gram Panchayat One BC Sakhi’ initiative, introduced by the National Rural Livelihood Mission (NRLM), aims to ensure the deployment of at least one Bank Sakhi in every Gram Panchayat by the conclusion of the 2023-24 period.

Several factors contribute to the limited presence of Bank Sakhis. They often face mobility challenges and safety concerns. Reliant on male family members for tasks like visiting bank branches for cash transactions, these women incur higher transportation costs and safety risks compared to their male BC counterparts. Moreover, there is no formal financial support provided to address these shortcomings. That’s how Bank Sakhi’s is transforming rural india with Digital Payment Adoption.

Bank Sakhis face time constraints due to dual responsibilities, impacting their efficiency in fulfilling household duties and BC roles. Despite working an additional 3-4 hours daily, male agents conduct twice as many transactions compared to Bank Sakhi agents.

The minimum qualification requirement serves as another obstacle in recruiting Bank Sakhis, particularly in underprivileged rural areas. The current Reserve Bank of India (RBI) mandate necessitates a minimum of a 10th-grade qualification. However , Some banks now demand a 12th-grade qualification, which may hinder talent recruitment as Business Correspondents in remote rural areas.

The Path Forward

Looking ahead, there are several feasible strategies to address the issues faced by Bank Sakhi’s. These strategies include liquidity assistance, social security benefits, and transportation risk coverage to/from the bank.” Furthermore, banks could consider raising the ceiling on working capital loans accessible to BCs. However, the most critical aspect is for banks to rectify technical issues on the backend. A dependable banking infrastructure is imperative for Bank Sakhi’s to deliver a seamless banking experience in rural regions.

Minister Giriraj Singh hailed Bank Sakhi’s at ‘Samarth Campaign’ for boosting digital transactions in 50,000 gram panchayats. Given the advantages of the female BC model, Bank Sakhi’s are instrumental in driving India’s digital financial inclusion.

Read- Unequal Tax Burdens: Can the Minority of Income Taxpayers Shoulder the Load?