Rural Banks And The Blame Game

by | Aug 6, 2023

The worst service I’ve ever got…” Those were my words as an unsatisfied customer at my bank’s home branch in Kerala four years ago. Little did I know that in my role today, I would be closely interacting with bank officials and customers. I’m working with migrant workers in the remote corners of southern Rajasthan where financial inclusion is a pressing issue. The experience has exposed me to challenges faced by those who don’t even have their bank accounts, commonly known as the unbanked people. In this region, a bank is as essential as water for survival.

A Customer’s Struggle To Reach The Bank

In a conversation with a local customer in Rajasthan, I came face-to-face with the harsh reality of banking in these regions.

There is nothing good about the banks operating here. They are located far away, and the lack of regular and reliable means of public transportation makes it a herculean task to reach there. If they ask me to visit the bank by 11 am, I need to leave by 8 am to ensure that I reach in time. After 8, there are no buses. So I must rely on fellow community members with motorcycles going in that direction to drop me. This incurs additional expenses since I need to pay them a nominal amount and fill up their petrol tanks. Additionally, I have to let go of my daily wages, around Rs. 500.

– A customer

Inside The Bank: Bias And Dismissal

“Even if I manage to reach the bank on time, the long queues and delays test my patience. I’ve often heard bank officials dismissing my needs, asking unnecessarily for missing documents or declaring internet server issues. What’s worse is that certain upper-caste individuals receive preferential treatment, while we have to wait feeling ignored. This is not a one-time occurrence; it happens frequently.”, he adds.

Me to bank manager: It’s evident that your customers don’t feel satisfied with the services they receive. Even if we assume that their needs are addressed, the discrimination and the frustrating experience they go through only adds to their disappointment.

Bank Manager: We are not entirely responsible for these complaints. Many customers fail to follow our instructions, and a significant number of them lack proper documentation. Their KYC details never match. Blaming the banks for all inefficiencies is unfair. We haven’t done anything wrong.

The Plight Of The Unbanked

This customer’s story is not the only one. It’s a norm for many people in south Rajasthan. The challenge of accessing a bank due to poor transport infrastructure forces customers to undergo time-consuming and expensive journeys to reach the nearest branch. For migrant workers, this adds a financial burden on their already demanding lives.

Blame game

The long wait times at the banks only exacerbate the situation. Bureaucratic hurdles trouble customers who often seek urgent financial assistance. Unfortunately, the experiences of underserved communities remain far from satisfactory. Preferential treatment based on identity further highlights the need for fairness and inclusivity in banking system.

The Blame Game

Many conversations expose the blame-shifting culture in the banking industry. While customers voice their complaints about poor service, banks tend to point fingers back at them. This only deepens the divide and perpetuates financial exclusion.

An example is of Ram Lal, a migrant worker from a remote village. He went to a nearby bank to deposit his hard-earned money securely but he was defrauded by a BC (Business correspondent). However, they told him, “this is bizarre, you are just blaming them. What proof do you have?“. The bank officials gave a cold response and didn’t support him at all. Ram Lal returned home disappointed. These real-life examples demonstrate how blame game not only adds to customers’ helplessness but also hampers their financial progress. Its consequences are far-reaching.

Customers lose trust in the banking system when they feel wrongly targeted for the inefficiencies they experience, hence less likely to seek financial services from banks in future.

Moreover, the blame game diverts attention from the core issues such as lack of infrastructure, inadequate financial literacy programs, and unfair biases within the system. By placing the onus solely on customers, banks absolve themselves of the responsibility to improve their services and cater to the needs of marginalised communities.

Addressing the issue of blame-shifting requires a fundamental shift in the banking industry’s approach. A more customer-centric approach, empathy and transparency on the part of officials, transparent communication, and willingness to rectify shortcomings can help rebuild trust between customers and financial institutions.

Financial Inclusion Initiatives

Despite numerous initiatives aimed at financial inclusion such as BCs and Bank Sakhi models, some of these efforts have been tarnished by turning into sales-driven campaigns or publicity stunts. When such initiatives become target-driven, they start focusing on numbers rather than customer well-being. BCs often enrol individuals without fully explaining the implications of insurance policies. This leads to distrust and disillusionment when customers are enrolled into schemes without proper consent.

Also read: Insurance And Inclusivity: How Far Have We Reached?

It is crucial to understand that financial inclusion goes beyond numbers. In that case, systems and the people in it lose sight of the intended purpose. If one wants to work towards making finance inclusive, it has to involve empowering individuals with financial literacy, knowledge, and access to essential services.


The challenges faced by the unbanked are deeply ingrained. Overcoming them requires collaborative efforts from all stakeholders involved – government, banks, and communities. By addressing critical factors such as transportation, technology, biases, and financial literacy, we can pave the way for a more accountable banking system.

In conclusion, to bridge the divide and achieve true financial inclusion, it is essential for banks to acknowledge their own shortcomings, address systemic issues, and prioritize the needs of their customers. Only through such collective efforts can we build a more inclusive system that serves the interests of all individuals, regardless of their background or location.

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