As some banks around the world are trying to be more inclusive and offer services to low income individuals, many people are still facing problems getting the services they need at banks that are supposedly inclusive to low-income clients. In a recent, thought-provoking editorial from Newslaundry.com, Indian journalist recounts their experience helping a woman struggling to get an account and a chequebook at a bank in Mumbai.
The woman, Jyoti, lived with her parents and husband, had a meagre income, and yet wanted to open a savings account and have a chequebook. The identification required to get these services weren’t something she was able to provide. Although Jyoti has a government authorised ID (an Aadhaar card), a voter ID, and PAN card, the bank still wanted proof off her residence via an electric bill.
The trouble for Jyoti was, the slum she lived in didn’t have electricity that ran to each dwelling. They paid a fixed fee to the community but her home didn’t have an electricity meter charged specifically to her or her family. Since she didn’t have the necessary proof of address, the bank asked Jyoti to come up with a written letter from an elected official of the slum proving she lived there.
After she had this documentation and returned to the bank, she was able to open account but had to jump through more hoops to get a debit card and a chequebook. More than once, the banker actually asked Jyoti why she needed a chequebook. And when she finally got a chequebook ordered, it was never delivered to her home and it took Jyoti several more weeks before the bank would let her pick one up.
You can certainly make the argument the bank was just doing their due diligence, making sure that Jyoti really was who she said she was. And of course a bank has to ensure they aren’t delivering a chequebook to the wrong house. Still, the author of this article seemed convinced Jyoti was not treated fairly because she was poor and that bank officials made it harder to get what she needed because she wasn’t a conventional customer.
In a country like India where at least 30% of people live in poverty according to BBC, banks need to consider adjusting their policies to accommodate poor people who are looking for financial services. The bank was asking for verification Jyoti wasn’t able to supply, and clearly everyone in Jyoti’s slum and others in slums all over India would have the same issue. Just because someone doesn’t have electricity in their home doesn’t mean they shouldn’t be able to have a savings account and chequebook.
And even after Jyoti was able to satisfy the bankers they still profiled her, asking her on multiple occasions why she needed a chequebook. The author commented they never would have been asked that question by a banker. Certainly the move toward microfinance in poverty-stricken communities can prevent troubles like Jyoti had.
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