Banking for everyone: How Tripura did it

A thorough database of residents proved to be a goldmine in reaching out to those still beyond the banking net


Shishir Tripathi | June 9, 2015 | West Tripura

#tripura. tripura jan dhan accounts   #financial inclusion  

Though faint, the last serving memory of Mandwi for the rest of the country would perhaps only be the bloody massacre of 300 people in 1980. Home to decades-old ethnic conflict, the small block in West Tripura district was counted among the most backward blocks in the country. It was only around 2006 that the ethnic tension subsided, law and order was restored and development took baby steps.

The backwardness of the area helped Mandwi get selected for a pilot project on financial inclusion in 2012. The leap forward took place in less than two years. About a year later on April 21, 2015 prime minister Narendra Modi conferred on the block an award for bringing each of its 12,910 households into the banking net.

The journey, however, was tough.

The block, with more than 95 percent tribal population, was in the clutches of unscrupulous moneylenders, with barely 1,040 households having bank accounts (in 2012). While the administration was clear about its aim, which was to remove the financial exclusion, the task ahead was to accurately identify and track households without formal bank accounts.


On her own: Purnalaxmi
In her early 20s, Purnalaxmi belongs to the tribal community of Mandwi. She was divorced some three years ago and was directionless, when she thought of working. As she knew embroidery, she thought of starting a small shop on the suggestion of a friend. The biggest roadblock was credit. She approached the block development office which helped her open a bank account and get a credit of '3 lakh with the help of which she bought a shop and started her business. She now owns ‘Rignai Embroidery’ and earns around '10,000 a month. She just had one thing to say. “I am happy, which I never expected [to be] after my husband left me.”

A new start: Renu
Renu dropped out of school after class 10. After a few years of leaving school he realised his mistake. But by then it was too late to join a school. He was ready to work. He then started a small cybercafé with the help of TGB. In time he added a photocopier machine and stationary material. Now he earns around '8,000, matching some of his friends’ incomes from private jobs. Now in his mid 20s, Renu says, “Everyone should get this kind of opportunity to stand on their own feet.”

Isolated but not excluded: Mungkwrui
Around 4 km from the Mandwi BDO office lies a long stretch of road amid wide open fields. There is no habitation, except a cluster of five tin-roofed houses. Mungkwrui is one of the few people who live here. While he lives in an almost uninhabited area, he is not excluded from the benefits of the government. He grows tea on a piece of land he owns. Last year, he sold 400 kg of tea for '13.50 per kg. He could start cultivating the field with the help of a loan he got under the self-employment programme.

From tribalism to technology: Sachi, Budhu and Gajendra
Borakha is a panchayat unit in Mandwi and has 246 households. It looks like any tribal village of thatched houses with people engaged in agriculture and related occupations. The place has a special mention in the stories narrated by people of Mandwi block. “In 1980, it was here that the ethnic clashes started, which continued till 2006,” says Manohar Biswas.

Gajendra, in his late 60s, says, “I witnessed everything but who wants to remember it? We have all moved on. Today, we are looking for development. We have a bank here and an ATM too. Women are doing business and earning more than men. It is kind of magic for us.” Sachi and Budhu might belong to one of the remotest parts of the country but are very much in sync with technologies that urbanised Indians take pride in. Both got their accounts opened under PMJDY with the State Bank of India. They proudly flaunt their RuPay debit cards. Asked how often they used their cards, Budhu replies, “Thrice a month, as after that, money is deducted from the balance in my account.”

Asked how he came to know about the new limit on ATM transactions, he says, “A camp was organised recently where we were told about this limit.”

Following the inroads made by the district administration, an expert team, headed by MRP Rao, chief vigilance officer (CVO) of NTPC, and comprising senior bureaucrats from Assam, Nagaland and Manipur, visited the block early this year. It submitted its report to the department of administrative reforms and public grievances of the central government on February 21.

While acknowledging the efforts made by the administration it also discussed the problems faced by people before the financial inclusion drive. The report observed, “For the entire population, only one branch of Tripura Gramin Bank (TGB) was offering services. Thus there was heavy reliance on local moneylenders. Also, there was delay in transfer of government benefits to citizens and the menace of chit funds/ponzi schemes existed.”

Under the PMJDY, launched in August last, bankers were given a target of opening a bank account for every household before January 26. And it was after the launch of the scheme that they were asked to conduct household surveys. The drive in Mandwi had, however, gone the other way round.

Here the first task undertaken by the administration was to prepare a database of the households that did not have a bank account. It was a daunting task but the solution was found in an existing instrument called ROR (Record of Ordinary Residents).

Abhishek Singh, who served as district magistrate and collector of West Tripura district till May, recounted the exercise. “Each gram panchayat in Tripura is supposed to maintain the ROR of citizens and in 2011-12 when the below poverty line (BPL) survey was being conducted, we realised that with little modification it could act as a consolidated database of people.”

The ROR is a physical register maintained in Tripura as mandated under the Tripura Panchayats Act of 1993.It is meant to record the details of its citizens at the lowest tier of local self-government (urban as well as rural). It records the demographic information of each family, such as name of the head of the family, including relationship of the head with the other members. It also includes details like sex, age and educational qualifications of a member along with the house type, landholding, details of sanitation facilities and information regarding water and electricity connections.

Elaborating on how it all started, Singh says, “The then state chief secretary, Sanjay Kumar Panda, suggested that we should have more columns in the register with details of Aadhaar and bank accounts of people, along with other vital information.” Following that the Aadhaar number or the enrolment id for subsequent transition to Aadhaar number, elector’s photo identity card (EPIC) number, bank account details, and details of PDS card, along with that of MNREGA job cards, were added to the register.

“This was done in a short span of time and soon, in 2012-13, all RORs were computerised, which helped us create a consolidated database of all families which, in turn, helped us to identify households without accounts and get them one,” adds Singh. The computerisation of ROR also helped the administration in ensuring real-time management of the citizen database and better delivery of residency-related services.

Once the database was prepared, the block development officer (BDO) provided the list of yet-to-be-covered families to the banks. GIS mapping was done to identify the location of the bank branches. The banks then went on to open accounts of locals in the nearest branch or ultra small branch (USB) and August 2012 onwards plan formulation and preparatory activity were started and the project was formally launched on September 5, 2012 in Mandwi block. Within one year, all 12,910 households were brought under bank coverage. It was in many ways a paradigm shift in decentralised planning. Nobody could be exempted from this as no citizens are entitled to civic services and benefits unless their names are recorded in the register.

Singh adds, “It also helped in Aadhaar-based mapping of residents with different available sectoral databases  and developing a framework for error-free need assessment and targeted-relevant and timely assistance to people. Another important benefit of the e-ROR was profiling for identification of the defaulters.”
Manohar Biswas, the BDO of Mandwi, says, “When we initiated the process of financial inclusion in 2012 most of the villagers were least interested in opening a bank account. They continued with their old habit of keeping their savings in a bamboo tube supporting their thatched dwellings. We knew that we had to make them aware of the benefits of a bank account so more than 180 awareness camps and door-to-door campaigns were organised.”

On the urgent need for the financial inclusion drive, Singh says there was “an imperative of bringing people under the formal banking net as they were being cheated of their hard earned money by chit-fund companies. Since the financial inclusion drive, sales of financial instruments, such as national savings certificates (NSC), have increased threefold and people are availing banking services”.

Talking about the major challenges faced by the administration in motivating people to use banking services, Singh adds, “The problem was that people were using banks for merely availing credit under various schemes. We tried to educate them about the benefits of banks and gradually they started using it for depositing money, investing in savings instruments and other financial services.”

Panda, now secretary in the ministry of textiles, has shared his experiences in his book, ‘Making One Plus One Eleven: Some Innovative Experiences of Tripura’. He writes, “Under the special initiative taken by the State Bank of India (SBI) with the help of the district administration, action was taken to cover all villages of the block under financial inclusion through a network of eight banks and ultra small branches (USBs), each dealing with three to four clusters of villages.”

He adds, “More than 5,500 accounts were opened for unbanked households during the six months. To speed up the process of account opening, five college students and a retired bank official were engaged during June-July 2013 which yielded very good results in motivating people to open accounts.”

While the ROR helped Mandwi in ensuring 100 percent household coverage, the question was whether it could have been replicated in other places also. Commenting on this Singh says, “It is easy to pilot a project but difficult to replicate it with same success. However, here we replicated the model successfully in other blocks.” He adds, “Though not all states have instruments like the ROR but there are other instruments like the national population register (NPR) that can be used to track the real beneficiaries.”

On the same point, the expert team report states, “The initiative piloted in Mandwi block has already spread to other blocks of West Tripura”, and adds that “the West Tripura initiative is a pioneer in total financial inclusion and with 100 percent coverage it stands as a role model that will inspire the whole country.”

Innovative tools of financial literacy

In a jam-packed hall in Udaipur, South Tripura, young magician AK Nandy is ready with his tricks to enthral his audience. While the usual flower bouquet and rope tricks get thundering applause, one trick that grabs most attention is played with thousand rupee currency notes.
Nandy waves six currency notes to the audience, counting them twice for reassurance. Then waving his hand in the air while mumbling some chants he counts them again and now there are seven notes.

Many in audience joke that if only they knew the trick how easy things would have been for them. To their surprise Nandy tells them how they can in the same manner increase their money. “Open a bank account and save money in these accounts and then you all will see how your money increases,” Nandy tells his audience with a smile.

This is one of the many novel ways adopted by Tripura Gramin Bank (TGB) in collaboration with the National Bank for Agriculture and Rural Development (NABARD) to ensure financial literacy among people and educate them about the benefits of having bank accounts. TGB chairman Upendra Sabar says, “Financial literacy is very important for ensuring financial inclusion. We have to understand that what is most important is to motivate people to save and invest and to use formal banking. Most of the people in places like Mandwi are simple tribals. You cannot educate them by pamphlets and hoardings. To draw their attention you have to do something like this.”

He adds, “We have organised a host of events like magic shows and street plays to make people aware of the benefits of formal banking. Through street plays we tried to make people aware of the evils of unscrupulous chit-fund companies and through proper comparison helped them understand the benefits of having bank accounts against depending on informal institutions.”

Tripura has 1,038 panchayats, out of which 663 have been covered by TGB. TGB, till May 5, had opened 2,20,605 accounts, out of which 1,27,415 accounts had been opened by women. 

On PMJDY, Sabar says, “Earlier, we had not been given targets, but under PMJDY we were working in mission mode. We have been given a target of opening one lakh accounts but we have crossed two lakh.” TGB has 142 of the total 435 branches and nine USBs. After covering each household, TGB has further started opening accounts of other family members. 


Great expectations
Owner of Sahelee Tailors, Suku last year earned around '2 lakh in June- July, as she got a big contract for stitching uniforms for schools in Mandwi. She employs six persons and earns '15,000 per month on an average. She is a confident entrepreneur and says, “Because of the money I earn I can provide good education to my children and I feel both happy and proud about it.” She adds, “I am looking for another shop to expand my business.”

Old-age pension
At Dinabandhu Nagar panchayat in Mandwi block, Mayada Khatoon and Sultan Miah, both in their 70s, are sitting in the SBI branch. They get a monthly old-age pension of '800. Against the old routine of going to the treasury department to collect their pension amount on a designated day, they now come to the branch as per their convenience.

ROR and direct benefit transfer
At the Angsla Indane Gramin Vitrak, people have lined up for their LPG cylinders like any modern town in an urban cluster. Shanta Kishore Debarma takes his cylinder and shows his Aadhaar card and is assured of his subsidy. Out of the 12,910 households, 3,239 households in Mandwi have LPG connections and all are Aadhaar linked. ROR is used to ensure there is no duplication. “A family of five is entitled to one cylinder and two cylinders for a larger family, and we can check any false claims through ROR,” says an employee of the agency.

A kick-start to enterprise
Birmohan has a small rubber processing machine in the middle of a forest near Patni panchayat. He took a loan and set up the processing plant. “People come to me with the latex collected from their trees and I help them process it. I charge them accordingly. It helped me earn around '50,000 last year,” says Birmohan.

While the bankers have successfully opened the accounts they agree that mere opening of accounts will not help and how people use them is what matters. “Basically, poor people used to consider banking as an elite activity. But now we are seeing a change in attitudes. Now they are coming to us to get an account opened. Due to an extensive campaign under PMJDY, people have started realising the benefits of formal banking. However, still much needs to be done,” says Sabar.

He adds, “The system of providing credit needs to be simplified further. I have realised that when people, especially the poor, urgently need money they go to moneylenders, as it is comparatively simple to borrow from them. But they do not understand the ill effects of doing so, which is exorbitant interest rates,” says Sabar.

Pradeep Kumar Paul, regional manager, State Bank of India (SBI) for Tripura (Urban), says, “Under PMJDY it was perhaps for the first time that we were motivated to reach to people and provide them service. That was a comforting factor for them. People were given the confidence that we are meant to serve them and a trust is being gradually built.”

Paul adds, “Financial literacy has reached such a level that recently a women came to deposit '12 and asked me whether she will get the receipt for it or not. When this kind of awareness is achieved then we can be sure that financial inclusion has taken place.” While there are many tailor-made products for different sections of people, bankers say most people are not yet aware of them.

Tapan Kumar Patra, chief regional manager, United Bank of India, says, “There are already many tailor-made products, for instance, kisan credit cards, which have substantially helped the rural population. The point is that we have to earn the people’s trust and convince them to use them. Maybe we have not been able to get that till now.”

He adds, “Some years ago a scheme had been launched for the poor to avail a loan to buy rickshaws. They were given '15,000 for five years at a nominal interest rate of 4.5 percent. So they roughly had to pay us around '8 per day. Instead, most preferred to pay  '40-45 per day for the rickshaws that they rented. If they would have taken our offer then they would have not only paid much less but also owned rickshaws.” However, he adds, “We as bankers also have constraints and have to be cautious as people tend to default, thinking that they will get a waiver or relief, which they don’t expect from the moneylender. This mindset also needs to be changed.”


(The article appears in the June 1-15, 2015 issue)



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