Business Correspondent

Overview

Business Correspondents are retail agents who represent banks and are responsible for delivering banking services at locations other than a 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. According to the RBI’s mandate, the products offered by BCs include Small Savings Accounts, Fixed Deposit and Recurring Deposit with low minimum deposits, Remittance to any BC customer, Micro Credit and General Insurance. The BC model helps banks in bringing door-step delivery of services especially ‘cash in - cash out’ transactions in areas which are to nearer to the rural population, thus resolving the issue of last-mile delivery.

Scope of Activities

Business Correspondent, who serves as a crucial link between end users of banking services and the banks which they represent, are responsible for undertaking a gamut of responsibilities. They are responsible for identification of potential customers and generating awareness about savings and other products offered by banks as well as offering debt counselling and advice on money management. One of the major tasks handled by Business Correspondents is the collection and preliminary processing of various forms for deposits including verification of primary information or data, filling of applications / account opening forms including nomination clause and submission to the bank.

Business Correspondents (BCs) also execute various tasks such as completing the KYC process for the customers, opening of no frill deposit accounts and other products offered by the bank, furnishing of account information like mini account statements as well as cross-selling of other financial products by the bank. They undertake activities that would be within the normal course of the banking business of the concerned bank, but organised through and by entities at places other than the bank's premises.

Moreover, BCs manage the collection and payment of small value deposits and withdrawals, that is, a maximum of Rs. 2,000 per transaction as well as receipt and delivery of small value remittances / other payment instruments. The representative, for all such transactions, is authorised by the concerned bank to accept or deliver cash either at a kiosk or his place of work or any suitable location, subject to the ceilings per day/ per customer which is Rs. 2000 in each case. Apart from these, BCs deliver any other service on behalf of the bank, duly authorised by the concerned authority. They are also entrusted to take care of reputational risks involved in cases of duly appointed sub-agents of the business correspondents.