A Business correspondent (BC) is an entity which acts as a teller for the bank and carry out a full range of transactions on behalf of the bank, in return for commissions on the services rendered. It is a model that enables people in remote areas of India to access formal financial institutions. The RBI has also allowed banks to designate business facilitators, which can refer customer proposals or facilitate banking transactions, but are not allowed to carry out actual transactions. Business correspondents is one of the initiatives to increase financial inclusion and provide banking services to financially excluded people in all parts of the country, especially in the rural areas. The BC model can be leveraged to change the lives of people in remotest parts of the country. It is being used effectively for community development and social empowerment. BC model is also used by people in remote areas to withdraw all government payments such as DBT payments, pensions, etc. and the model makes sure that the fund reaches to the right person. Ultimately, through BCs, country’s economic growth can be shared by all individuals and reduce inequality that exist by bringing more population within the financial fold.
With the objective of ensuring greater financial inclusion and increasing outreach of the banking sector, the Reserve Bank of India has allowed banks to use the services of intermediaries operating, among others, as common service centers as retail agents who represents banks and are responsible for providing financial and banking services at locations other than bank branch / ATM. BCs support banks in providing its limited range of banking services at affordable cost. Thus, they are pivotal in promoting financial inclusion. The BC model helps banks in bringing door-step delivery of services especially 'cash in - cash out' transactions in rural and remote areas, thus resolving the issue of last-mile delivery (Source: CRISIL Report).
The concept of BCs is to address the needs of banks, which need to reach out to a wider section of society, as well as underprivileged people with no access to credit. With no access to credit, underprivileged people often have to invest their personal savings in health and entrepreneurial activities, leaving them highly vulnerable to adverse circumstances. Our Material Subsidiary, Zero Mass Private Limited was the first ever business correspondent in the history of Indian Banking (Source: CRISIL Report). Presently, we have joined hands with five nationalised banks and three regional rural banks namely to provide BC services. We have established a robust network of centers to deliver last mile banking services to unserved and underserved rural and remote populations.