Corporate Business Corespondent

The Reserve Bank of India has taken several initiatives over the years for increasing banking outreach and ensuring greater financial inclusion. A significant step in this direction was the issue of RBI guidelines in January 2006 for engagement of Business Correspondents (BCs) by banks for providing banking and financial services.

Since then, the regulatory framework for the BC model has been progressively honed to ensure that consumer protection is not compromised while facilitating enhanced outreach of banking services. The relaxation in the regulatory framework was made possible due to the rapid changes in technology –both in terms of Core Banking Solution as also relatively low cost biometric hand held devices for ensuring authenticity and fraud prevention.

Business Correspondents are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. Banks are required to take full responsibility for the acts of omission and commission of the BCs that they engage and have, therefore, to ensure thorough due diligence and additional safeguards for minimizing the agency risk. Basically, BCs enable a bank to expand its outreach and offer limited range of banking services at low cost, as setting up a brick and mortar branch may not be viable in all cases. BCs, thus, are an integral part of a business strategy for achieving greater financial inclusion.

BCs are permitted to perform a variety of activities which include identification of borrowers, collection and preliminary processing of loan applications including verification of primary information/data, creating awareness about savings and other products, education and advice on managing money and debt counseling, processing and submission of applications to banks, promoting, nurturing and monitoring of Self Help Groups/ Joint Liability Groups, post-sanction monitoring, follow-up of recovery. They can also attend to collection of small value deposit, disbursal of small value credit, recovery of principal / collection of interest, sale of micro insurance/ mutual fund products/ pension products/ other third party products and receipt and delivery of small value remittances/ other payment instruments.

The financial services industry is evolving with the advances in online banking and mobile banking practices. However, in spite of all the developments, there is a huge percentage of a population that remains unbanked in India. To enable rural public avail banking services, the Reserve Bank of India (RBI) introduced financial inclusion and initiated Business Correspondent (BC) model.

BCs or the bank’s agents who have a strong local network and can influence people for their own good are ideal for this model. When the right business correspondents are chosen to be the face of the bank, following benefits are promise:
• Reduces costs of setting up branches
• Helps reach the underserviced and unbanked rural population
• Promotes doorstep banking services
• Supports expansion of business and drives larger growth
• Maintains quality of assets through better recovery.

Our business correspondent services enable banks to financially include the underserved and unserved rural masses, by offering a bouquet of financial services like savings, deposits, insurance and remittance through a pan India network.
• A standalone BC solution; available as a plug-in for your existing CBS.
• Multi-device integration – smartphones, printers, scanners or micro ATMs.
• In-built with trackers to monitor BCs and measure their performances.