Despite identity proofs and proper documents, like a letter from a bank or micro-lending firm, to back the legitimacy of their cargo, the cash could be confiscated. The money, once proved genuine, would be released only later, at the intervention of the court or a senior government official.
No one wants to deal with such harassment — neither the financial institutions nor their field agents and ‘business correspondents’ (BC) who collect cash from villagers paying loan EMIs. Sometimes, though, the arrangement may not be all that kosher if dodgy agents choose to carry unaccounted cash or act as couriers of political parties while on official duty.
So, to avoid delays, inconvenience, and a brush with the law, field officials and BCs are being told to put on their best behaviour, besides being “strongly discouraged” to carry cash beyond Rs 50,000 during the weeks of election. While unlike others, these agents are technically allowed to move more money (given the nature of their business), it is difficult to put across the point to a flying squad of cops and election officers who are clueless of the micro-lending business model. “Sometimes, they just don’t listen or understand. That’s because they are unaware of how BCs and MFI people work. So, agents may have to carry less cash, do multiple trips,” said a senior person of a large BC firm which works with multiple banks and lenders.
As part of a ‘standard operating procedure’ of Microfinance Industry Network (MFIN), an organisation that works with regulators and stakeholders to promote micro-finance, the agents are being reminded to refrain from politically sensitive comments.
They are also advised not to get into arguments with political representatives, any party leaders and district administration, and ensure that no political party banner is placed in the centres where meetings are held with borrowers.
The SOP, circulated among microlenders, also advises not to maintain unusually high amounts of cash at their branch premises. While loans are disbursed online, borrowers mostly repay in cash which field agents collect and carry to the nearest branch of the micro-lender before depositing it in a bank. Earlier this month, Sa-Dhan, an association of micro and impact finance companies, circulated lists of MFI institutions with electoral officers while assuring that its members have been advised that “personnel carrying official cash under any circumstances shall not carry any other cash of third-party agencies/individuals.”
The MFIN SOP also instructs the agents to avoid travelling in any political party vehicle and identifying with any party. “The problem is how do you sensitise lakhs of BC and MFI agents across the country. They may end up doing something without realising the implications. It means unnecessary trouble,” said a banking industry official.
“Even ATM vans carrying cash have faced problems in the past,” said the person. To avoid hassles, all cash carrying officials are being told to carry their organisation’s ID and self-KYC, a copy of the organisation’s registration certificate, and acknowledgement of the copy of the letter to the Chief Election Officer.
Besides, they should also keep a record of how much cash has been recovered along with a list of borrowers who paid.
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