Shashi Rajagopalan Memorial Awards on

Financial Inclusion & Rural Development

2015
(2nd to 8th November 2015)

Chandeni Village, Mewat, Haryana

Submitted by:
Rakesh Kumar
Tarique Ansari

Table of Contents
Executive Summary.................................................................................................................3
1. Village Profile.......................................................................................................................5
2. The Journey - Those seven days!........................................................................................7
3. The Survey..........................................................................................................................11
4. Probing Deeper...................................................................................................................13
Conclusion...............................................................................................................................16
Annexure: Two Interactions from our Diary:.....................................................................17

List of abbreviations

Executive Summary
It is often said India lives in her villages. It is thus pertinent to know the quality of life of
the people in the villages, which in turn largely depends historical, cultural, social, attitudinal,
economical, political and lately technological spheres. Any policy intervention aimed at
improving the quality of life in the villages demands information on various indices of
development.
The Village Immersion Project, an unstructured training program of experiential learning
that put RBI officers in the shoes of their clients, namely the poor of the country, by spending
days and nights with them in their village provides a unique perspective to understanding of
village life, financial inclusion and rural development.
In our approach to study Chandeni village was to carry our three dimensional study to study
Chandeni village and recommend some changes which can be made from RBIs perspective, we
felt that looking at this village from Financial eyes would mean like suggesting cure only for
fever to a patient suffering from Typhoid. It would rather be prudent to study this village from
different eyes and not just financial eyes. We came to believe from our field work and
analyzing the village geography both physical and human, that we need to understand the social
fabric and its role in making financial decisions.
We, therefore tried to increase the depth of our understanding of the village dynamics by
interacting with Panchayat Sarpanch Shri. Rattan lal and other panchayat members, SHGs,
Aanganwadi people, NGOs working in village, State Government officials, Shri. V. S. Bhatnagar,
DDM, NABARD, Shri. S. Piplaya, branch manager of Syndicate Bank, Business correspondent
of Chandeni village, local school teachers/children and local people.

1. Village Profile
Chandeni Village is located four kilometers away from Sub- District Nuh, Mewat that is
around 100 kilometers away from National Capital of India. Chandeni village is one among
51 villages under Sub- District Nuh of Mewat. Mewat is an insulated and backward district of
Haryana not connected by rail, and barely connected by buses. The area is mostly inhabited
by an ethnic group called Meo who follow Islam.

1.1 Demographics and Social Profile

There are 639 households in the village with total population of 4222. The general Sex Ratio
of the village is 868 and Child Sex Ratio (0-6 years age group) stands at 917. The proportion
of Child Population (0-6 years) is 22.92%. More than 90% of the population is Muslim. The
proportion of Schedules Caste Population to Total Population in the village is 3.1%.

1.2 Major Crops

The agriculture in village is mostly rain-fed. The village covers an area of 908
hectares. Bajra, jowar, wheat, rice, mustard, guar and vegetables are major crops grown in the
region.

1.3 Occupational Distribution of the Households

Out of the 639 households in the village, following is the distribution of the occupational
distribution.
Others
Daily Labourers
Teachers
Retired Armed Personal
Agricultural Labourers
Cultivators
0

50

100

150

200

250

300

1.4 Education
The area has two Government High Schools - one each for boys and girls. The details of
literacy in the village are depicted in the following bar chart.

3000
2500
2000
Literates

1500

Iliterates

1000
500
0
Male

Female

Total

1.5 Health
There is a government run Swasthya Kendra, however there is dearth of both medicines as
well as doctors, it functions more as a first aid centre.

1.6 Banking Infrastructure

There is no bank branch at Chandeni. The nearest bank branch of Syndicate Bank is located
in the Ferozpur Namak, Nuh which is four kilometres from Chandeni. There is also an SBI
branch at Ferozpur Namak area. One business correspondent of Syndicate Bank is active in
the village.

2. The Journey - Those seven days!

Day 1
Our journey to Chandeni Village from Gurgaon began on November 2, 2015 at 8:30 AM.
After having our breakfast at Gurgaon Bus Stand, we started our journey by a private bus to
Nuh , which is 4 kms away from Chandeni Village. We reached Nuh at 11.00 AM. Lead
District Officer of the Syndicate received us at Nuh, and took us to Ferozpur Namak branch
of Syndicate Bank.
We interacted with the Branch Manger who briefed us about the financial position of
the branch

and

level

of

financial

awareness

among

locals.

There

we

met

the Banking Correspondent of the Chandeni Village who became our constant companion for
the next seven days.
After having our lunch at a Dhaba near bank we headed straight to Panchayat Office in order
to know the basic contours of the village life and seek vital information which would help
make our immersion a successful one. Sarpanch was kind enough to serve us tea. He gave a
general overview of the village, after collecting the information we had a walk through the
village and interacted with elderly people who shared their experience about various aspects
of the village life.

Day 2
We began the second day with a planned strategy based on the information collected on Day
One. We had prepared a small questionnaire, which was presented to village households for
better understanding the village people. The questions were designed specifically to know
their financial awareness, what they feel about banks, what they feel about other institutional
and non-institutional forms of credit. This gave us some understanding of financial literacy of
the people of Chandeni

Day 3
On day three we started our day by visiting a NGO, which was hosting a meeting with

NABARD officials to discuss the financial needs of Chandeni and other villages. This NGO
gave us the understanding of what NGOs think of people of Chandeni village and how they
are contributing to make in change in the lives of people of Chandeni. This NGO was
working to provide skills to unskilled people to make handmade baskets and other such items
to earn their living.
We got an opportunity to meet the BDO (Block Development Officer) and discussed with her
how the Government of Haryana is planning to develop the block and improve upon various
indicators like health, education, literacy and financial inclusion. She while emphasising on
co-operation and co-ordinantion among the different stakeholders of development, made vital
suggestions about the role the banks can play in effective implementation of social sector
schemes. The fruitful discussion with BDO brought us to believe that banks have a greater
role to play rather than what we had thought by sitting at our respective desks in our
Departments at Mumbai.

Day 4
On fourth day we decided to visit the local school and meet nearby residents. The village has
two Government High Schools - one each for boys and girls. We visited boys high
school. The visit was refreshing and we interacted with the children, gave them some
information about banking. Head Master Shri. Maan Singh showed us various facilities
available to the students viz a well built school building, a big playground, availability of
electricity, drinking water, toilet facility and kitchen for preparing mid day meal. However,
there was dearth of teachers for important subjects like Maths and Science. Upon discussion
with the teachers, locals and students we observed that the quality of education is very poor
due to lack of motivated staff and parents. After completing the high school education,
student generally goes to Sr. Secondary School located in Ferozpur Namak. The female
dropout rate is high for three reasons- (i) due to household chores, (ii) early marriage and
(iii) parents' reluctance to send them to nearby town for further studies after completing Class
VIII from the Village School.

Day 5
On the fifth day we decided to meet vulnerable sections of society - senior citizens, women
and Schedules Caste to have a view of the village from their perspective. We met a group of
senior citizens and understood their opinion about finance. We were surprised to see that they

were not interested in placing their pension money in banks as according to them while banks
can pay a maximum interest of somewhere around 10% interest while they could earn 20%
interest by way of money lending. An interaction between business correspondent and elderly
revealed that few of them who seemed from powerful communities were only interested in
taking loans, however their intension of repaying the same was not doubtful. They also knew
about various schemes, which help them get easy loans. This brought us to conclusion that
although they had knowledge of bank financial products, they are financially aware but not
financially prudent. We explained them the demerits of money lending and various
repercussions non-payments of loan amounts.
Next, we met a group of women including elderly women. They all had opened the accounts
with the bank and were regularly keeping their savings in the bank via business
correspondent. Few of them had formed SHG and taking advantage of bank linkages, they
also told us about the various radio programs, which help them understand banking products.
On a corner of village, we could see few new homes constructed under Priyadarshini Awas
Yojana (PAY). There we met people from Scheduled Caste community of the village. Most of
them were either agricultural labourer or daily wagers. Although they were having bank
accounts, they were not regularly doing the savings due to lack of regular income.

Day 6
We dedicated our sixth day to the farmers of the village. Most of farmers were indulged in
thrashing of the rice. Nearly all of them were having bank accounts, mostly because of
various subsidies flowing in their accounts. They were keen in taking loans but not in
savings. Loans were considered more of a subsidy of government, which need not be repaid.
We explained them about working of a loan and how it is different from subsidy. It was a
great experience talking to them and they were kind enough to offer us to have lunch with
them.
In evening, we asked our BC to take us to young minds of the village, he took us to a small
playground where a game of cricket was going on, which reminded us of our college days.
We interacted with some young lads, they were either dropout from school/college or doing
some kind of vocational trainings. One of them revealed that few years back, he took a loan
to open mobile repair shop but business didnt take off and he couldnt repay the amount.

Their knowledge of financial products was fairly good.

Day 7
Finally, the last day of our journey had come and we decided to visit the Panchayat office
again and tell the members of panchayat about what we have done so far, so that, they who
are working at ground level may also get some new inputs to already myriad problems of
people living in Chandeni. Lastly met branch manager of Syndicate Bank and thanked him of
his constant support throughout our stay. In a small discussion he had given us some crucial
inputs from what bankers feel should be done for providing better services to the people.
Our BC was kind enough to drop us to the Bus Stand. On our way back to New Delhi, we
were filled with so many thoughts and emotions, we were touched by the hopes of people, the
simplicity of their living and hardships they were facing. This visit from India to Bharat was
overwhelming, giving a completely different prespective which we could have never
imagined while sitting in our desks in Mumbai. In our report we try to present some solution
to problems from our knowledge and journey in RBI so far, so that it may help to bring some
change in the lives of people of Chandeni and the people of my Bharat.

3. The Survey
We used method of field survey to collect the data about the different aspects of financial
inclusion as well as financial awareness. A questionnaire, which was presented to people,
consisted of three parts.
1.

Financial Products

2.

Earning and Saving Habits

3.

Credit needs and credit facilities

A sample of 261 respondents was considered for this study, which varied from elderly to
young and most vulnerable to most powerful in the village. The profile of the respondents is
depicted in the following table.
Particulars

Respondent

Male

Female

Cultivators
Agricultural Labourers
Retired Armed Personal
Teachers
Daily Labourers
Others
Total

s
68
31
16
8
75
63
261

38
24
16
4
48
34
164

30
7
0
4
27
29
97

The following bar chart explains the knowledge of financial products and willingness of the
villagers to invest in them.

Financial awareness and investment in financial products

100.00%

79.00%

82.00%
45.00%

62.00%

58.00%
28.00%

Next we focused on 3As of financial inclusion and asked the respondents of the survey about
following three dimensions of financial inclusion.
I.

Availability: Are the banks and other financial institutions available in the nearby

II.

region? If yes, are are products and services offered by them are relevant?
Affordability: Is cost of opening an account in the bank high? How costly are the

III.

transactions in such accounts?

Accessibility: How accessible are bank officials/ banking correspondent? Are there
bank employees who speak local? How accessible are the ATM, mobile banking etc.

We asked respondents to rate a question on scale of 1 to 10, 10 being the best representation
of the situation. Shown below is the pictorial representation of the response

4. Probing Deeper
Having spent seven days in Chandeni gave us an insight to varied problems being faced by
the villagers and the opportunities that are present in front of them. After analyzing their

profiles and their knowledge, understanding of financial products, their expectations and
problems, we present in this chapter some recommendations to mitigate their problems. The
stay in the village gave us three unique perspectives- what a villager thinks? What the banker
has in mind? and how we as regulator view the whole situation? We therefore shall try to
recommend solutions from these three perspectives.

4.1 Villagers Perspective

4.1.1 Our transact walk in the village gave us opportunity to meet persons from different
sections of the society and view life from their eyes. Although people are financially literate
(in which people have knowledge about various financial products), they are not making
financially wise decisions.
Example
People were willing to moneylender their pension money to marginal daily wagers rather
than keeping in FD/RD thereby exposing them to higher credit risk.
Recommendation
The need is to make an investment in building the knowledge base of the community. The
bank can play a proactive role in this by interacting with people, understanding their
problems and requirements, clarifying various misconceptions and doubts they are carrying
and designing the new products based on such interactions, therefore Bank needs to become
peoples friend first, after all these people are going to trust with their money with banks.
This can done by bank employees and business correspondent by participating in certain
activities like attending social/ religious functions in the village, distributing notebooks at
schools etc.
As a tool to empower people, a feedback mechanism may be designed in which people may
be encouraged to interact with bank employees to communicate their feeling about bank.
Based on such perception, necessary changes in the banks approach may be made. This
would also help the bank staff becoming more proactive and reflective in understanding
customers and their needs

4.1.2 Loans and Subsidies are two different things, however many people take loan and

assume the same as subsidy, this happens partly due to unclear communication from bankers
and partly due to overt emphasis in the bank to meet various targets at branch level. A villager
doesnt mind taking such loan and other imitate her.
Example
In a discussion with SHG group of 10 elderly persons, we found that they were contributing
to repay the existing loan so that they can take a loan of large amount with no intention to pay
back.
Recommendation
Strengthening the financial literacy efforts with minute details on part of all the stakeholders
and refraining from pushing financial inclusion beyond a certain absorptive capacity of locals
on part of bankers can go a long way to make locals responsible towards loans repayment.

4.2 Bankers Perspective

4.2.1 KYC - A Barrier?
According to the bank staff there are certain people who have ability to repay small
token loans(if provided) however they are being given such loans because they do not meet
KYC documents which are essential for such loans to ascertain their repaying capacity. These
people, then have to look for other sources of financing and money lending happens to be
easily available one.
Recommendation
Bank may have a monthly meeting with Sarpanch, BC and persons willing to take loan in
order to facilitate the KYC process. Technology may be used to take photo of the customer,
their documents, letter from Sarpanch etc to upload in the banks server. Bank analyzing the
repaying capacity, bank on experimental basis, may begin with distributing five small loans a
month to eldest female member of a household who are in need even if their KYC is not
complete. On-going monitoring of such loans is an essential for further learning and design of
these products. we believe that five such loans or Rs 5000 will not put much burden on a
banks balance sheet.

4.2.2 Possibilities for Innovation

At many instances it was observed that branch manager or the banks are bound too tightly
with RBI guidelines that it leaves very little or no room for their innovation. This acts as a
barrier for many committed employees who want to go out of the way to serve the needs of
the people.
Recommendation
The answer lies in collaborative and considerate banking with necessary regulation and
supervision.
A committee at branch level headed by Branch Manger may be formed which would discuss
the problems faced by the people coming to that branch, which could range from people
finding it difficult to comprehend certain forms, having problem with dynamics of certain
bank-related schemes etc. These problems can be discussed at branch level and depending
upon the nature of problem, branches can be provided with room for designing certain
financial products suitable for the local people. In the midst of innovation we must not forget
the to maintain a prudent banking system, hence some kind of regulatory instructions can be
spelt out by RBI wherein core aspects of instructions should be adhered to in all situations
and peripheral aspect which can give enough room for innovation to banks. This would help
bank staff even the junior most employee of the branch to feel responsible towards people
and would encourage him to take interest in understanding peoples problem. We understand
that this would mean walking an extra mile for the bank, but even if an inch is done,
would go a long way in building a healthy bank-customer relationship.
4.2.3 Employees
During the discussion with bank employee we could decipher that few employees who are
posted from other states lack necessary connect with the people.
Recommendation
Region- focused recruitment which will put the local person in the branch will go long way in
connecting with people, understanding their problems and convincing them to assimilate into
the banking purview.

4.3 RBI Perspective

RBI may encourage the bank to put in systems of reward and recognition for personnel
initiating, ideating, innovating and successfully executing new products and services in the
rural areas. Some kind of Inclusion Innovation fund may be created by RBI to reward/
incentivize Branch Manager/ employees of the bank who these new products and services.
Simplification of branch authorization, encouraging banks to open branches in unbanked
rural centers, facilitating the effective use of ICT solutions and creating environment of
collaboration between banks, government schemes and people shall go a long way to enhance
effective banking.

Conclusion
In the middle of the night, lying awake on Charpai, looking up the skies through holes of the
roof made me think, Is there a better way for these people? Well, there must be.

Chandeni Village has all the ingredients to become a truly inclusive village where villagers
shall have confidence and faith in the financial system, courage to use such system to their
advantage thereby making the financial inclusion a win-win situation for the poor, for the
banks and for the nation. The road from un-bankable to bankable requires a varied, at the
same time coordinated response from the all the stakeholders. When the regulations will be
clear and progressive, when banking will be prudent and imaginative and when people will
be aware and aspirational, then we shall hit the sweet spot of accelerated financial inclusion.

Annexure: Two Interactions from our Diary:

A visible change at the bottom of the Pyramid
We observed a small, newly whitewashed house; neatly written on it that it was built under
Priyadarshini Awas Yojana(PAY), a demand based 100% state funded scheme of Haryana
Government, aims to provide Pacca houses. We asked our Banking Correspondent that whose
house this was? He shouted from outside of an adjacent house Raghuveer. A
feeble looking person a bit frightened by our presence came out of the door and asked, Kya

hua sahab!, What happened sir. I said,Dont worry Raghuveer! we have come here to know
about your village. Your house looks beautiful, can you tell us a bit about it? He was more
confident now and replied that since he was poor and fall under BPL, he approached
Assistant DC office and availed PAY and built this house for which he got a financial grant of
` 90100/- (81000/- for house and 9100/- for construction of Sanitary Latrine). As and when he
got his money, which was disbursed in three installments of 25000/- (In advance along with
sanction letter), 35000/- (after construction of house upto lintel level) and 21000/- (On
putting doors and windows in house) he completed the construction of the house. He was
planning to move to his new home in a weeks time after Ghar parvesh with his wife and 2
sons (both of them were enrolled in the village school).

A discussion with wise man of the village

Our banking Correspondent had told us that we must meet Shri. Prahlad Singh who was a
retired schoolteacher. We couldnt reach him for the first two days of our stay in the village as
he had gone to Gurgaon, however on the third day we caught hold of him. He had a big house
with 3-4 rooms, we also saw 2 motorcycles and 1 car which reflected that the family was
financially quite sound. In our discussion with Shri. Prahlad Singh we came to know that all
his 4 children were educated and were working as teachers in the Nearby villages/districts.
He shared his experience on varied subjects of village affairs. According to him, the emphasis
on the education was not great in the village, few well off families had send their children to
study in Gurgaon or even New Delhi, however most of the kids went to nearby High School
which had acute problem of lack of teachers particularly for class 6 to 8 because recruitment
of teachers by the government was not regular and adequate. Agriculture as explained by
the Shri. Prahlad was rain-fed and was not sufficient to employ all, many of the villagers
were doing odd job as daily wagers; few were doing the truck driving whereas some went to
nearby cities for employment. Health facilities were lacking within the village, mostly the
child deliveries happen at Hospital in Nuh, Mewat which is around 3-4 kms from the
village, Ambulance facility was available.