Banking sakhis have revolutionized access to financial services in rural India: Let’s strengthen this network

Chauhan’s work is part of a transformation driven by the Deendayal Antyodaya Yojana-National Rural Livelihood Mission (DAY-NRLM), which promotes financial inclusion by linking SHGs to banks. With over ₹11 trillion in loans disbursed and non-performing assets (NPAs) below 2%, the programme has built a strong cadre of community resource persons, including Krishi Sakhis (for agriculture), Pashu Sakhis (livestock) and BC Sakhis for digital finance.

The need for BC Sakhis is evident in credit distribution patterns. According to SBI Research, metro areas receive 60.6% of bank credit, while rural areas get just 7.7%. States like Tamil Nadu and Telangana exceed the national credit-deposit ratio average of 79.9%, while Jharkhand, Bihar and the Northeast lag. For rural women, banking often means long travel barriers (and lost wages) that BC Sakhis help eliminate.

Launched in 2017 with World Bank support, the BC Sakhi initiative aims to place one BC agent in each of India’s 150,000 Gram Panchayats (GPs). These agents foster financial inclusion by documenting financial histories, delivering direct benefit transfers (DBT), offering insurance and channelling rural savings into formal systems.

The selection criteria for BC Sakhis includes Aadhaar enrolment, a clean financial history and smartphone literacy. Candidates undergo six days of residential training at Rural Self Employment Training Institutes, followed by certification from the Indian Institute of Banking and Finance. Impressively, 96.5% of trainees have passed.

Today, over 142,000 SHG women serve as BC Sakhis, offering services like account management, cash transactions, digital payments, loan facilitation, pension distribution, Aadhaar seeding and insurance under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana. They also extend services beyond banking hours and raise awareness of financial products.

A 2024 Truagrico study highlighted the initiative’s impact, from increased savings and better financial planning to reduced fraud and greater trust in digital transactions. BC Sakhis have enabled agricultural loans, business expansion and entrepreneurship. Notably, they have advanced women’s financial independence and community standing.

Banks benefit too. BC Sakhis have boosted customer acquisition as well as engagement, expanded outreach and reduced branch footfall. Their role in utility bill payments adds further value. To date, they’ve conducted over 375 million transactions worth ₹1.42 trillion. During the covid lockdown, they disbursed nearly ₹6,000 crore, proving indispensable.

Their success lies in familiarity and trust. Being locals, they connect easily with villagers, offering both formal and informal financial guidance. They act not just as service providers, but agents of financial inclusion. Thus, describing BC Sakhis as ‘silent revolutionaries’ is no exaggeration.

But challenges remain. In poorer areas, fewer transactions mean lower earnings. The equipment in use is often old and some corporate BCs resist deploying women agents. To address this, banks are urged to create a central BC registry for better data analytics and policymaking. The ministry of rural development and National Bank for Agriculture and Rural Development (NABARD) are exploring a dedicated corporate BC model for women.

To strengthen the initiative, several steps are recommended:

Advanced training in digital banking, cybersecurity, entrepreneurship and financial planning by using blended learning for varied literacy levels; refresher courses on new financial products, tech updates and government schemes; expanded services including micro-insurance, loan processing, utility and mobile payments, and BC training for them to act as information hubs for government programmes; upgraded infrastructure involving the adoption of biometric devices and so on, point-of-sale terminals and improved internet connectivity; structured engagement between BC Sakhis, banks, NRLM staff and communities to build trust and coordination; and revised commission models that reward transaction volume and diversity, with special support for low-income regions like the Northeast and aspirational districts.

Despite some challenges—the digital divide, connectivity issues, security concerns and the need for advanced training—BC Sakhis can be a transformative force. But for this to happen, they must be dynamic and responsive to changing circumstances. It would help India become a developed nation by 2047 and deliver prosperity to rural communities through inclusion.

The author is former additional secretary to the ministry of rural development and advisor, Transform Rural India (TRI)