Business Correspondents (BCs) can now operate from ultra-small branches of banks - Financial Inclusion

May 17, 2012

With a view to promote financial inclusion, a roadmap to provide banking services in every village with population above 2000 by March 31, 2012, was drawn up. Banks have covered 74, 199 (99.7 percent) out of 74,414 such villages.

Prersently BF/BC entities are required to conduct their activities at places other than bank premises, Now RBI has decided that BCs can operate from such Ultra Small Branches as their association with the branch will increase their legitimacy and credibility in the area and give people increased confidence to use their services. However, banks should ensure that such an arrangement does not result in BCs limiting operations to serving customers at such branches only, if, due to geographical spread, such arrangements may lead to BC services not being easily available in the entire area of their operations.



For furthering financial inclusion, banks may establish outlets in rural centres from which BCs may operate. These BC outlets (Ultra Small Branches) may be in the form of low cost simple brick and mortar structures. These Ultra Small Branches may be set up between the base branch and BC locations so as to provide support to about 8-10 BC Units at a reasonable distance of 3-4 kilometres. These could be either newly set up or by conversion of the BC outlets. Such Ultra Small Branches should have minimum infrastructure such as a Core Banking Solution (CBS) terminal linked to a pass book printer and a safe for cash retention for operating large customer transaction and would have to be managed full time by bank officers/ employees. It is expected that such an arrangement would lead to efficiency in cash management, documentation, redressal of customer grievances and close supervision of BC operations. These could be satellite offices or regular branches as the case may be.

Banknet Group & Six Sigma Films have produced a Social awareness film (CSR Film) on Financial Inclusion..... click to watch the film



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