Meet The ‘Savings Agents’ Who Help Strengthen India's Rural Economy
Post offices in India provide banking facilities in the absence of banking institutions in the rural hinterland. About 89 percent of total post offices are located in rural areas. These post offices are the sole prospects of savings and investments for a large chunk of the rural population. In such a situation, the ‘saving agents’ serve as a vital link between the rural denizens and the post offices.
Prabhat Misra 12 May 2023 10:30 AM GMT
In the absence of diverse investment opportunities in India’s rural hinterland, the post office serves as a dependable agency for safeguarding the life savings of millions of households. However, with little education and awareness about the functioning of investment schemes, the rural residents are dependent on ‘saving agents’ for accessing the investment facilities.
Sunita Pal and her husband Ramlal Pal are amongst thousands of savings agents spread across India’s rural pockets. The couple work at the Windhamganj subpost office of the Sonbhadra district in Uttar Pradesh. They coordinate between the banks and the depositors and help the villagers invest their savings efficiently. In Uttar Pradesh, these agents are appointed through District Savings Offices.
“Earlier, the work of savings agents was never affected by the local crime and naxalism but investors from the region were very few. But the government has been providing infrastructure and development which has resulted in the end of naxalism in Sonbhadra and related areas. Now, many people are coming to the subpost office for investment,” Sunita Pal said.
“As a commission on the total savings contributed by the villagers, we earn up to Rs 20,000 per month but of course it’s erratic,” Ramlal Pal said.
According to the Shyamala Gopinath Committee report, submitted in 2011, there were more than half a million savings agents in post offices spread across the country in 2011.
These savings agents also motivate people (both urban and rural) to save, and assist in channelising small savings to financial assets. In return for their services, agents earn the commission paid out of the National Small Savings Fund.
Anand Kumar Srivastava, state president of the Uttar Pradesh unit of the National Small Savings Agents Association stated that out of a the total half a million savings agents in the country, around 60,000 are from Uttar Pradesh. "This occupation should be promoted as a source of direct employment for thousands of youths across the country. It is one of the few jobs that can be attained without cracking an entrance examination. The savings agents should be recruited in a campaign mode by the government," he said.
Also, Rakesh Jain, assistant director in the National Savings Department in Uttar Pradesh's Banda district mentions that about 80 per cent of the savings agent in the state are supporting their livelihoods by earning upto Rs 20,000 in a month while 20 per cent of these agents are earning more than Rs 100,000 on a monthly basis.
Agents get 0.5 per cent in fixed deposit schemes and four per cent in recurring deposit schemes. These savings agents act as a bridge between the millions of depositors and the post offices for day-to-day transactions and investment.
However, general secretary of National Small Savings Agents Association, Manoj Kumar Mishra who is a Gorakhpur-based savings agent said that savings agents are not satisfied with the present rate of commission.
"It is because commission for their services to investors given to them by the central government is low when compared with commission given to other financial sector agents like insurance. In rural areas post offices have few facilities for old investors and agents to sit and there remains the problem of internet availability in post offices. In rural post offices, staff crunch is also a problem; due to which payment and investment on time are big issues," Mishra said.
Vijay Kumar, a Sonbhadra-based Assistant Statistical Officer in the District Savings Office corroborated Pal’s claims. He also stated that now many people from the rural areas are approaching the district savings office to become savings agents.
Meanwhile, Alok Parashar, Aligarh-based general secretary of Uttar Pradesh’s national Small Savings Agents Association and a savings agent himself mentions that district savings offices of Uttar Pradesh government are providing self-employment to educated persons who have 10th grade passed certificates and are aged at least 21 years.
“These offices should be made more strengthened and facility-rich, both for agents and investors. Our savings agents are working hard for maximum investment in post office small savings schemes; they also participate in national campaigns like Har Ghar Tiranga, and in the anti-deforestation campaign Red Tape Movement for Nature,” Parashar said.
The training of these savings agents are led by the District Savings offices which work under the National Savings Directorate of the Uttar Pradesh government.
“District Savings offices are playing a key role in building the nation. These offices raise awareness about savings schemes, appoint the small savings agents and issue new agencies, provide necessary papers and forms to agents, help to sort out problems existing before agents and investors, launch campaigns in those areas where there is less investment in savings schemes, do renewal of savings agencies, and take action against agents who are not obeying department's rules or if any complaint from investors," Jai Krishna Shukla, Deputy Director, Administration, National Savings Directorate, Uttar Pradesh said.
"With the help of the District Magistrate and Chief Development Officer of the district, the District Savings Office set savings schemes deposit targets for every department,” he added.
According to the progress review booklet issued by National Savings Directorate, Uttar Pradesh, savings agents in Uttar Pradesh have made deposits of more than Rs 22,000 crores in small savings schemes via investors during the financial year 2021-22.
Govind Madhav Agrawal, a savings agent from Mathura, mentioned that small savings agents have been playing an important role in popularising small savings schemes, and small savings collection.
“Many of our agents are getting more than Rs 100,000 commission per month for their services to investors. The multiple role of agents is an important part of investment in small savings schemes,” he said.
Nationwide, the investment in small savings schemes have increased from Rs 1,080 million in 1948-49 to Rs 2,802,749 million in 2019-20. The investment has been increasing since 2013-14. About 38 per cent of the total collection of small savings in the country are drawn from the rural population.
Prabhat Misra serves as the Deputy Director, National Savings Directorate, Agra Division and is the founder of the Red Tape Movement. Views and claims are personal.