The Reserve bank of India along with the government of India work time to time to promote financial inclusion in the country. The idea of Business Correspondents (BC) is also the one among the financial inclusion process in the country started by RBI.
For the financial inclusion, the rural people play a very important role. But there are many villages or areas in the country where setting up a physical bank is not easy. The reasons for this are:
- The business of banks in remote areas is very low, so the banks will not get any profit, and if they do not get any profit, shutting of bank branch is very obvious.
- And since no profits, so employing people, safety guard, building rent, etc., will give a huge burden on bank.
- There are many problems in remote areas like electricity, internet facility, telephone lines, etc.
- Employees also do not want to work in remote areas.
So to cope up with these problems, a BC model was initiated by RBI.
- In this individuals or any other entities can become the business correspondents just like insurance agents and reach the people in far flung or remote areas.
- They are called bank representatives.
- They help the people in any banking activity like opening accounts, depositing money, withdrawing money, give away loan, or any other transaction.
Who can become Business Correspondent?
Some of the entities who can become Business Correspondent are:
NGOs/ MFIs set up under Indian Societies/ Trust Acts.(Care: excluding NBFC), Post Offices, Retired Bank employees, Ex-Service men, Retired Govt. Employees, Individual kirana/ medical/fair price shop owners, Individual who own petrol pumps, Retired teachers, Self Help Groups (SHGs) linked to banks, Individual member of Farmer’ss Clubs, Individual operators of Rural Multipurpose kiosks, Individuals/ proprietors/ owners who manage Agri Clinics/ Agri Business Centres., Retired Post Masters, Individuals such as auto dealers, tractor dealers and FMCG stockists, Insurance agents including of private insurance companies (IRDA certified) and postal agents, Any other individual considered suitable by the selection committee, etc.