Under a pilot project of the National Bank for Agriculture and Rural Development (Nabard) in the district, women SHG members were appointed as business correspondents or Bank Sakhis, armed with micro automated teller machines (ATMs) that were dual authentication-enabled.
This essentially means that if SHG members need credit, the joint signatories do not need to visit the bank branch to withdraw cash. They can use the micro ATMs to authorize payment, which is then electronically transferred to the respective bank accounts of members.
“The Bank Sakhi experiment has proved to be very successful in empowering women and bringing convenience to SHG members. We will soon issue guidelines for regional rural banks to adopt the model in other districts and it will be up to them to embrace it as they are the most important stakeholders in the entire process as they extend such credit facility to SHGs,” said Subrata Gupta, chief general manager, department of financial inclusion and banking technology, Nabard.
Under the Nabard-SHG bank linkage programme, SHGs with a track record of savings can avail loans from banks, including regional rural banks (RRBs), to extend credit to their members.
According to Nabard data, there are 7.43 million savings-linked SHGs across the country with a portfolio of Rs.9,897.42 crore, and an aggregated loan outstanding of Rs.42,927.52 crore as on 31 March 2014.
However, the dual-authentication technology has been deployed only in Unnao as yet, since starting in February 2015, and is soon expected to be implemented by the bank across other districts.
“Within this financial year, we will upscale the project to another 50-60 villages in Barabanki and Hardoi districts,” said J.S. Ravi Kumar, chairman, Gramin Bank of Aryavart. He added that since the technology has been helpful, other banking correspondents apart from Bank Sakhis will also be given micro ATMs with dual-authentication technology.
The digitization of transactions is expected to bring in transparency in the way SHGs operate and has also increased trust among SHG members as every transaction can be undertaken in their presence.