E-Paper
‘Let kirana shops be rural bank agents’
A Reserve Bank of India panel has suggested that kirana shops, medical shops, fair price shop owners, PCO owners, retired teachers, insurance agents and agents of government saving schemes should be allowed to become business correspondents (BCs) of banks in rural and semi-urban areas.
A Reserve Bank of India panel has suggested that kirana shops, medical shops, fair price shop owners, PCO owners, retired teachers, insurance agents and agents of government saving schemes should be allowed to become business correspondents (BCs) of banks in rural and semi-urban areas.
The move is aimed at ensuring greater financial inclusion and increasing outreach of the banking sector as it allows business facilitators (BFs) or BCs to provide financial and banking services.
The BFs and BCs provide a workable and cost-effective alternative to building ‘brick and mortar’ bank branches in remote areas of the nation.
The working group recommended full range of financial activity being affected through BCs.
“As experience showed, the BC model coupled with information technology solutions could help banks substantially increase their outreach, facilitating financial inclusion,” the circular said.
The working group has included authorised self-help groups, petrol pump-owners non-deposit taking non-banking finance companies on BCs probable list.
The RBI recommendations also proposed measures for improving long-term viability of the BC Model by permitting banks to collect reasonable service charges from the customer for delivering services through these BCs.
