A dead sister, ₹19,000 and a failed system

“Lift a fistful of earth and pour it on our shameless heads, Bapu.”
What shocked India was not merely the sight of Jitu Munda trekking to a Regional Rural Bank branch in Odisha’s Keonjhar district, carrying the exhumed remains of his sister on his shoulder to access the balance in her bank account. What was truly horrifying was what happened afterwards.

The entire establishment — the bank, the police, the district administration and society itself — watched in silence as Jitu trudged back home, the body still on his shoulder. Nobody arranged a vehicle or ambulance to carry the body back to its grave. The police officer standing beside an official vehicle did not offer help. The bank branch, which certainly had discretionary power to spend a small amount on emergency assistance, did nothing.

Neither the government machinery nor the bystanders thought it necessary to accord dignity even to the dead, forget the ₹19,000 lying in Kalra Munda’s account.

Yes, the wounded conscience of the system worked swiftly afterwards. The paperwork required to transfer the balance to the legal heirs was completed the same day. Donations poured in, and about ₹15 lakh reportedly reached the family.

Yet three disturbing questions remain unresolved in this episode where the poor and illiterate collided with the “establishment”.

The first concerns the silence of India’s banking regulator, the Reserve Bank of India. Customer service has always been projected as a core RBI concern. One expected at least a public acknowledgement that something profoundly wrong had occurred and that the matter was being examined. Even a brief statement would have reassured citizens that the system recognised the failure and intended corrective action. Let us remember that even international media, including the BBC and CBS, reported the incident.

Equally important, there is no indication whether the Banking Ombudsman system under RBI sought an explanation suo motu from the bank concerned. An illiterate tribal being driven to such exasperation surely warranted intervention. RBI regulations clearly mandate that banks “shall” obtain nomination details for deposit accounts. If a customer declines nomination after being informed of its benefits, the refusal must be recorded in writing, the RBI has directed. Was this procedure followed? The public does not know.

The RBI’s silence raises larger questions about the disconnect between regulatory frameworks and the lived realities of rural India. Can rural India reasonably be expected to understand terms such as “nomination”, “legal heir” or “ombudsman”? Why should grievance redress systems carry alien names incomprehensible to ordinary citizens? Can’t we find out more a people-friendly name for the “Ombudsman”? The quarrel is not even the name. The issue is the mindset behind such tongue-twisters.

This tragedy also exposes the withering away of the RBI’s once ambitious “outreach” efforts. There was a time when senior RBI officials regularly visited rural India to understand ground realities. Former Governor Dr D Subbarao passionately advocated such an engagement. It is telling that no prominent figure from the banking or regulatory establishment deemed it necessary to visit Jitu Munda’s village and understand firsthand what went wrong, so that the system itself could learn from the episode.

The financial system’s gaze and visits increasingly appear directed towards Washington and Basel while India’s own margins escape hard review. Ironically, five blocks in Keonjhar are part of the Government’s Aspirational Blocks Programme. Yet one suspects whether any policymaker or financial mandarin will locate Keonjhar on a map of India.

The second issue concerns the support structures set up by the civil services of India. Why did the government machinery at the village level not assist the tribal family? Is there any system to help rural citizens navigate the paperwork required by banks and government offices? Despite repeated claims of simplification, official processes remain intimidating for millions.

The third question concerns democratising and decolonising the Banking Ombudsman mechanism itself. Today, the system is largely reactive. Should a grievance redress institution wait passively for a formal complaint when there is overwhelming public evidence that the system has failed the poor? How can regulatory systems become more humane, accessible and proactive for the aam aadmi?

Admittedly, the current RBI Governor has repeatedly emphasised the need for customer engagement by banks. That orientation is reflected in decisions such as compensating cyber fraud victims up to ₹25,000, irrespective of lapses by account holders. The regulator must walk down this road.

From a macroeconomic perspective, inclusive growth has to be bottom-up. Financial Inclusion, an important component of the nation’s economic growth agenda, cannot end with merely opening a savings account. In fact, that is only the beginning. True inclusion means ensuring that the poorest citizens can access the financial system without distress or humiliation each time they need it.