Page 55 - Banking Finance July 2025

FEATURES

Foot soldiers battle low pay

B usiness correspondents (BCs) have played a stellar of BSBD accounts, with an additional facility of a RuPay debit
role in increasing the reach of banking services to
card with accident insurance coverage of Rs. 2 lakh and
the unbanked and underserved segments across
the country. And the numbers prove it. overdraft facility of up to Rs. 10,000.
Under the BC model, nongovernmental organisations/
Of the 72 crore basic savings bank deposit accounts microfinance institutions can act as BCs.
(BSBDAs), including the Pradhan Mantri Jan Dhan Yojana
(PMJDY) accounts, that were opened as of December-end Shoulder to the Wheel
2024, 62 per cent came through BCs and the rest through The scope of a BC's activities includes 44 services such as
bank branches, according to the latest RBI data.
account opening, cash deposit and withdrawal; receipt and
delivery of small-value remittances/ other payment
Further, of the total outstanding balance of Rs. 3,04,715 instruments; disbursal of small-value credit, recovery of
crore in BSBDA accounts, the balances in accounts opened
principal/ collection of interest; sale of micro-insurance/
through BCs and bank branches accounted for 52 per cent
mutual fund products/ pension products/ other thirdparty
and 48 per cent, respectively.
products; Aadhaar-enabled payment services (AEPS); and
direct benefit transfer (DBT) disbursals.
As part of efforts to promote financial inclusion and bring
vast sections of the population into the banking fold, the While BCs have ratcheted up impressive numbers on the
RBI, in November 2005, asked banks to make available a financial inclusion front, their remuneration is nothing to
basic 'no-frills' banking account, either with 'nil' or very low
write home about.
minimum balance, as well as charges.
There are 956 corporate BCs, both at the national and State
In 2012, in order to do away with the stigma associated with
levels, which employ over a million agents/ 'bank mitras' at
the nomenclature 'no-frills', banks were directed to offer customer service points (CSPs).
BSBDAs.
Dharanidhar Tripathy, MD and CEO, Business Correspondent
This account doesn't require maintenance of minimum Resource Council (BCRC), observed that more than one crore
balance and earns the usual interest on savings.
transactions are conducted daily through the BC channel,
mostly in rural and interior places.
For the debit card, there are no issuance or annual
maintenance charges. Further, more than 80 per cent of the enrolments in social
security schemes such as Pradhan Mantri Jeevan Jyoti Bima
The free services in BSBDA include deposit and withdrawal Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana
of cash; and receipt/ credit of money through electronic
(PMSBY), and Atal Pension Yojana (APY) have been through
payment channels or by means of deposit/ collection of
BCs.
cheques at bank branches and ATMs.
Poor Incentive
In August 2014, the government gave a big push to financial
inclusion through PMJDY accounts, providing one basic bank While BCs serve as a critical link between underserved
account for every unbanked adult. These are in the nature populations and the formal banking system, they face

50 | 2025 | JULY | BANKING FINANCE