With the objective of ensuring greater FINANCIAL inclusion and increasing the outreach of the banking sector, in Jan 2006 based on the recommendations of Khan Commission, the Reserve BANK of India ISSUED a new set of guidelines allowing banks to employ two categories of intermediaries - Business Correspondents (BCs) and Business Facilitators (BFs) - to expand their business. According to the guidelines scheduled commercial banks including Regional Rural Banks (RRBs) and Local Area Banks (LABs) have been permitted to use the services of intermediaries in providing financial and banking services throughout the country and even in remote areas. 

In this MODEL BCs are permitted to carry out transactions on behalf of the bank as agents, the BFs can refer clients, pursue the clients' proposal and facilitate the bank to carry out its transactions, but cannot transact on behalf of the bank. Recently Reserve Bank of India (RBI) has permitted all Business Correspondents (BCs) working for one particular bank; perform business for other banks too. 

As reported by the banks under their financial inclusion plans nearly 2,48,000 BC agents had been deployed by banks as on March 31, 2014 which are providing services through more than 3,33,000 BC outlets. Nearly 117 million basic saving bank deposit accounts (BSBDAs) opened through BCs remained outstanding as on March 31, 2014.

With the objective of ensuring greater financial inclusion and increasing the outreach of the banking sector, in Jan 2006 based on the recommendations of Khan Commission, the Reserve Bank of India issued a new set of guidelines allowing banks to employ two categories of intermediaries - Business Correspondents (BCs) and Business Facilitators (BFs) - to expand their business. According to the guidelines scheduled commercial banks including Regional Rural Banks (RRBs) and Local Area Banks (LABs) have been permitted to use the services of intermediaries in providing financial and banking services throughout the country and even in remote areas. 

In this model BCs are permitted to carry out transactions on behalf of the bank as agents, the BFs can refer clients, pursue the clients' proposal and facilitate the bank to carry out its transactions, but cannot transact on behalf of the bank. Recently Reserve Bank of India (RBI) has permitted all Business Correspondents (BCs) working for one particular bank; perform business for other banks too. 

As reported by the banks under their financial inclusion plans nearly 2,48,000 BC agents had been deployed by banks as on March 31, 2014 which are providing services through more than 3,33,000 BC outlets. Nearly 117 million basic saving bank deposit accounts (BSBDAs) opened through BCs remained outstanding as on March 31, 2014.