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A pigmy agent walks a fixed route every working day, collects whatever cash a depositor can spare, issues a receipt on the spot, and hands the day's takings and records to the branch that evening. The agent is paid a commission on what they collect, not a salary, and that single design choice shapes everything else about the job.
Who can appoint an agent now depends on the institution. Since RBI's Branch Authorisation Directions of 4 December 2025, a urban co-operative bank with deposits under ₹1,000 crore, most of the sector, may run doorstep collection only through its own permanent employees, not commission agents; only larger, Tier 3 and 4 banks may still use agents. Credit societies, patpedhis and Nidhi companies sit outside RBI's rules entirely and continue to appoint agents under their own board policies.
Commission typically runs between 2.5% and 3% of collections, though rates are not set nationally: Maharashtra's Cooperation Department capped it at 2.5% for credit co-operatives in April 2026, later raised to 3%, while at least one multi-state society advertises 4.5% plus 0.5%. At a bank, the commission is the bank's own cost; at some credit societies, the chairman of Maharashtra's federation of credit co-operatives says it is typically passed on to customers instead, though the mechanism for that is undocumented.
A pigmy agent is not the same as a bank's regular doorstep-banking staff, who may deliver other services such as cheque pickup. Nor is the agent's legal status settled: a Karnataka High Court ruling in April 2026 found that one bank's pigmy agents were, in substance, its employees rather than independent contractors, a finding that binds only in Karnataka and only on the facts of that case.