Sreelatha Menon: Financial untouchables

Savings schemes like Public Provident Fund keep poor migrants out by insisting on proof of local address

The poor in India are stuck in their poverty, similar to a situation described by Jean Paul Sartre in the play No Exit.

The money in their hands may increase, but all doors to saving this are closed, especially if they are migrants. Savings provide an exit plan from poverty, but saving schemes of the government like the Public Provident Fund (PPF) keep them out.

Migrant workers with no local proof of address don’t figure anywhere in the Reserve Bank of India’s (RBI’s) ‘know-your-customer’ guidelines. There is a separate set of guidelines for NRIs, even for migrants from Nepal, but none for migrant labourers.

The only privilege RBI has belatedly granted them is that of a bank account. Here is an example of how PPF treats the poor. Though it is called the Public Provident Fund, the word public, according to State Bank of India, does not include poor and migrants who don’t have their own house in the locality.

Khushi Mondal, a domestic worker from Murshidabad, living in her employer’s house in Ghaziabad for the past few years, wanted to have an account in the Public Provident Fund to save for old age.

She approached the State Bank of India branch in Indirapuram in Ghaziabad. The bank manager asked her for documents to prove her identity. She had a ration card, an Aadhaar card, a PAN card and a voter ID card, all of which showed her address in Murshidabad where she belonged. What more could one possibly have?

The bank manager was tongue-tied, but only for a moment. “I need local address proof,” he said triumphantly. She had an account in the local branch of Syndicate Bank, where she provided the reference of the house she worked in.

“This won’t do,” the manager said with an air of finality. She offered to take a room on rent and provide some papers. He said, “No one lives in rented houses in NCR (National Capital Region)”, obviously blind to the millions of migrants who live in one-room tenements or in their rickshaws or in the houses of their employers. He said he was helpless against RBI guidelines. Nowhere do RBI guidelines insist on local address proof. It only wants proof of identity and residence.

The manager was behaving in the same manner his ancestors must have to the Dalits—as untouchables.

In fact, if RBI does insist on local address when the person has sufficient proof of a real address, then untouchability is institutionalised and framed.

The woman then approached Syndicate Bank in IP Estate in Delhi, through her employer. The bank was willing to consider it, though not giving any assurance.

The question here is why should a poor woman with hardly any earnings be harassed by any bank for wanting to save money, not for a loan where there is a risk of the person running away? The manager’s demeanour showed there was nothing to fear from kicking out a poor migrant from a government scheme.

That, in other words, is the inclusive growth the UPA government talks about. In fact, not a soul among the poor migrants knows about schemes through which they have enough money to save and secure their future. The government does not advise the poor to join such schemes at all.

What is missing in the government, as well as the main Opposition, is a heart that can worry about the poor and their future.