Rosemary, Geeta and the future of banking

Also Read | Shoba’s previous Lounge columns

I am here because the woman who works for me wants an “advance” of ₹ 75,000. After my previous maid left town with a loan of ₹ 40,000, I’ve decided on a new set of rules. I know. Why give such loans? Been there. My mother already asked me that. Long story. I know people who loan lakhs to their help and I know others who keep it down to under one month’s salary. As for me, when I moved to Bangalore, I told everyone I hired that I wouldn’t give “advances”. It lasted about a week. This time, I’ve smartly insisted on collateral. My maid, Geeta, wants the funds to redeem the gold she has deposited at South Indian Bank. Fair enough, I say, but I am going to keep the gold till you pay me back. So there I am with a wad of cash in my hand, ready to dispense it like any old pawnbroker.

I sit with Geeta and her elder sister, Lakshmi, and wait for our number to be called. Half an hour later, we are summoned. I accompany them to the counter. The bank lady counts the cash. Geeta checks her jewellery. I pocket it. We leave. It is all very civilized; a far cry from the pawnbroker down the road who has goons on his speed dial and charges upwards of 3% as interest, according to Geeta. According to her, some charge 10% but now even the pawnbrokers have competitive rates.

That’s the other thing. These women are financially savvy. They stay on top of the interest rates of the various micro-finance lenders who frequent their neighbourhood. Their grapevine is better than a journalist’s. They compare the rates and services of micro lenders such as Ujjivan and Janalakshmi (Disclosure: my husband is an investor in Janalakshmi), the two biggest ones in Bangalore, and choose one or the other depending on circumstance. They occasionally call in stuck.

Once, Rosemary, who helps clean my home, called and said that four of the 25 women who took a Janalakshmi group loan with her didn’t show up for their monthly meetings. One of the borrowing girls had been murdered, said Rosemary casually, and the other three ran had run away. After hours of negotiation, the remaining women chipped in ₹ 250 each to make the entire monthly payment. In addition to all this, both Geeta and Rosemary are part of a chit fund that their husbands don’t know about. All this from a monthly salary that is under ₹ 10,000.

The future of banking is with women like these. They earn, they are financially astute, they are hungry for savings, and if they had a little bit of know-how, there would be no stopping them.

Two weeks ago, two representatives from Axis Bank came home to open a bank account for these ladies. They had never had one before. I stumbled on Axis Bank when I looked for health insurance coverage for my help: They were taking too many days off to go to the free hospital far away. Several states have good medical insurance programmes for the poor, including Karnataka’s Yeshasvini, a cooperative farmers medical scheme. But there are few options for the urban poor. At the beginning of this year, the papers reported that Pandit Deen Dayal Suvarna Arogya Suraksha Yojane, an insurance scheme for poor Bangaloreans, was about to be launched. I called the number listed on the website and was shocked when a human being answered. I asked if the health insurance scheme for poor Bangaloreans had been launched. “No, madam, they are rolling it out in Belgaum first, to test it,” the voice replied.

Axis Bank offers a nice package. Their “liabilities lending” programme (what a strange name) opens a no-frills bank account for an initial deposit of ₹ 100. In addition, ₹ 165 a year bought the account holders life insurance (Rs 50,000 to next of kin and a certain amount of disability insurance too). Geeta and Rosemary sat around our dining table as clients, and discussed options with the two young men from Axis Bank. They got an ATM card, a welcome kit, and an assurance that someone would come home and collect payment whenever they wanted to deposit. The quarterly interest rate: 2.3%. The amount of their first deposit: ₹ 300. The smile on their faces: priceless.

Shoba Narayan is looking for a health insurance company that services the urban poor. Write to her at [email protected]