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BC is a mode of providing banking service at the doorstep as BANK branch is at a distant area. Depositing money with BC is as good as depositing with a bank branch. The transactions are done through the ICT based devices and accounted in the books of the banks through online mode o real time basis. The CUSTOMERS get immediate VERIFICATION of their transactions as cash deposited / WITHDRAWN by customers through the BC is acknowledged by issue of a receipt on behalf of the bank. Additionally, transactions through BCs are done on the basis of our biometrics or a PIN number and thus no one else can do the transactions in our account.

BC is a mode of providing banking service at the doorstep as bank branch is at a distant area. Depositing money with BC is as good as depositing with a bank branch. The transactions are done through the ICT based devices and accounted in the books of the banks through online mode o real time basis. The customers get immediate verification of their transactions as cash deposited / withdrawn by customers through the BC is acknowledged by issue of a receipt on behalf of the bank. Additionally, transactions through BCs are done on the basis of our biometrics or a PIN number and thus no one else can do the transactions in our account.

The BC USES Information and Communication Technology (ICT) based DEVICES such as handheld MACHINES, smart card based devices, mobile phones, etc. to carry out the banking transactions.

The BC uses Information and Communication Technology (ICT) based devices such as handheld machines, smart card based devices, mobile phones, etc. to carry out the banking transactions.

Customer can ACCESS his account through BC AGENTS or Customer Service Points, USBs, Kiosks, ETC. appointed by the BC for SERVICING the CUSTOMERS. 

Customer can access his account through BC agents or Customer Service Points, USBs, Kiosks, etc. appointed by the BC for servicing the customers. 

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.

Banks MAY formulate a policy for engaging Business CORRESPONDENTS (BCs) with the approval of their Board of Directors. Due diligence may be carried out on the individuals/entities to be ENGAGED as BCs prior to their engagement.

The due diligence exercise may, inter alia, cover aspects such as 

1. Reputation/market standing 
2. Financial soundness 
3. Management and corporate GOVERNANCE 
4. CASH handling ability 
5. Ability to implement technology solutions in rendering financial services. 

Banks may formulate a policy for engaging Business Correspondents (BCs) with the approval of their Board of Directors. Due diligence may be carried out on the individuals/entities to be engaged as BCs prior to their engagement.

The due diligence exercise may, inter alia, cover aspects such as 

Some of the advantages in using BCs as listed below: 

• A better alternative for bank branches : Generally, a rural bank branch can serve 5,000 to 10,000 families in 15 to 20 villages within a radius of 15 kms. A Public Sector Bank branch may require more than 5 years to serve unbanked areas in India, while a private sector & FOREIGN bank with IT connectivity may require about 5 times more time. Further, OBTAINING PERMISSION to open a branch is a long and protracted process. The BC option potentially enables banks to reach out much faster and at a much lower cost. 
• Reaching the unreached : The model enable banks to extend financial services to the unreached clients beyond their branch network as beneficiaries of the BCs are mostly located at unbanked and under banked areas. 
• Better loan performance: Since local stakeholders LIKE NGOs, post offices, etc., are INVOLVED in the process, they know the customers at a personal level. The personal connection enhances the customers' accountability to the BC, which in turn improves loan performance and repayment rates. 
• Doorstep banking: D isbursement and loan recovery at the doorsteps of the beneficiary. 
• Quick expansion: Scaling up of this model is possible within a short span of time. 

Some of the advantages in using BCs as listed below: 

Under the "BUSINESS Facilitator" model, banks may use the services of intermediaries such as:

• NGOs/SHGs
• FARMERS Clubs
• Cooperatives
• Community based ORGANIZATIONS
• IT enabled rural outlets of corporate entities
• Post OFFICES
• Insurance agents
• Well FUNCTIONING Panchayats
• Village Knowledge Centres
• Agri Clinics
• Agri Business Centres
• Krishi Vigyan Kendras
• KVIC/KVIB units

Under the "Business Facilitator" model, banks may use the services of intermediaries such as:

1. IDENTIFICATION of borrowers and fitment of activities 
2. COLLECTION and PRELIMINARY processing of loan applications including verification of primary information/data 
3. Creating AWARENESS about savings and other products and education and advice on MANAGING money and debt counseling 
4. Processing and submission of applications to banks 
5. Promotion and nurturing Self Help Groups/Joint Liability Groups 
6. Post-sanction monitoring 
7. Monitoring and handholding of Self Help Groups/Joint Liability Groups/Credit Groups/others 
8. Follow-up for recovery.

The following Business Correspondents are listed based on the primary information received from them:

1. Action for Women and Rural Development (AWARD)
2. CASHPOR Micro Credit
3. Commonwealth Inclusive Growth Foundation (CIGF)
4. Drishtee Development and Communication Limited
5. Ekgaon Technologies Private Limited
6. Eko India Financial Services Private Limited
7. Guidance Society for Labour Orphan and Women (GLOW)
8. i25 Rural Mobile COMMERCE Services
9. Janalakshmi Social Services
10. Mahila Chetna Manch
11. Prayas Juvenile Aid Centre
12. Samvriddhi Inclusive Growth Network (SIGN)
13. SEED Financial Services
14. BASIX Sub-K iTransactions Limited
15. Swadhaar FinAccess
16. Zero MICROFINANCE and Savings support Foundation
17. Association for Rural Development (ARD)
18. Namathu Deepam Micro Finance Services (NMFS)
19. National Mother and Child Welfare Organisation (NAMCO)
20. FINO Fintech Foundation
21. Sambhav Social Service Organisation
22. Universal Welfare Fund (UWF)
23. Center for Rural Health and Social Education (CRHSE)
24. Vikas Gram Udyog Mandal (VGUM)
25. Lucknow Mahila Sewa Trust (LMST)
26. Glodyne Technoserve Ltd
27. Dr. Daulatrao Sonuji Aher Gramin Bigarsheti SAH Pat Kalwan
28. Shree Swami Samarth Nagari Sah Pat Maryadit Kalwan
29. Shree Swami Samarth Vyapri Sah Pat Maryadit SATANA
30. Sharadrao Pawar Nagari Sahakari Pat Maryadit Deola
31. Shree Mahavir Nagari Sahakari Pat Maryadit Satana
32. Yashwantrao Chavan Nagari Sah Pat Maryadit Kalwan
33. Ashapuri Mahila Nagari Sah Pat Maryadit Deola

Technology Providers for BCBF Model :

• FINO 
• EKO 
• A LITTLE WORLD 
• NOKIA 
• Integra

The following Business Correspondents are listed based on the primary information received from them:

Technology Providers for BCBF Model :

The BC REMUNERATION CONSIST of fixed and VARIABLE component which is commission based.

The BC remuneration consist of fixed and variable component which is commission based.

With a view to ensuring adequate supervision over the operations and activities of the RETAIL outlet/sub-agent of BCs by banks, every retail outlet/sub-agent 8 of BC is required to be attached to and be under the oversight of a specific bank branch DESIGNATED as the BASE branch and the distance between the place of business of a retail outlet/sub-agent of BC and the base branch as stipulated by RBI earlier was not more than 30 kms in rural, semi-urban and urban areas and 5 kms in metropolitan centres. HOWEVER the RBI has now removed the distance criteria.

With a view to ensuring adequate supervision over the operations and activities of the retail outlet/sub-agent of BCs by banks, every retail outlet/sub-agent 8 of BC is required to be attached to and be under the oversight of a specific bank branch designated as the base branch and the distance between the place of business of a retail outlet/sub-agent of BC and the base branch as stipulated by RBI earlier was not more than 30 kms in rural, semi-urban and urban areas and 5 kms in metropolitan centres. However the RBI has now removed the distance criteria.

Non-Banking FINANCE Companies (NBFCs) were not allowed to be appointed as BCs by banks. However the RBI has now permitted to engage non-deposit TAKING NBFCs (NBFCs-ND) as BCs, subject to the following conditions:

1. It should be ensured that there is no commingling of bank funds and those of the NBFC-ND appointed as BC. 
2. There should be a specific contractual arrangement between the bank and the NBFC-ND to ensure that all possible conflicts of interest are adequately taken care of.
3. Banks should ensure that the NBFC-ND does not adopt any restrictive practice such as offering savings or remittance functions only to its own customers and FORCED bundling of services OFFERED by the NBFC-ND and the bank does not take place.

Non-Banking Finance Companies (NBFCs) were not allowed to be appointed as BCs by banks. However the RBI has now permitted to engage non-deposit taking NBFCs (NBFCs-ND) as BCs, subject to the following conditions:

Initially the entities permitted to act as BCs included NGOs/ MFIs set up under Societies/ Trust Acts, Societies registered under Mutually Aided Cooperative Societies Acts or the Cooperative Societies Acts of States; Section 25 COMPANIES and post offices. As regards Section 25 companies, it was subsequently clarified that banks can engage such companies as BCs provided the companies are stand-alone entities or Section 25 companies in which NBFCs, banks, telecom companies and other corporate entities or their holding companies do not have holdings in excess of 10%.

The list of persons who can be ENGAGED as BCs was further expanded to include individuals like retired bank EMPLOYEES, retired teachers, retired government employees and ex-servicemen, individual owners of kirana / medical /Fair Price shops, individual PUBLIC Call Office (PCO) operators, agents of Small Savings schemes of Government of India/Insurance Companies, individuals who own Petrol Pumps, authorized functionaries of well run Self Help Groups (SHGs) which are linked to banks. Any other individual including those OPERATING Common Service Centres (CSCs) are also allowed to act as BCs of banks.

Initially the entities permitted to act as BCs included NGOs/ MFIs set up under Societies/ Trust Acts, Societies registered under Mutually Aided Cooperative Societies Acts or the Cooperative Societies Acts of States; Section 25 companies and post offices. As regards Section 25 companies, it was subsequently clarified that banks can engage such companies as BCs provided the companies are stand-alone entities or Section 25 companies in which NBFCs, banks, telecom companies and other corporate entities or their holding companies do not have holdings in excess of 10%.

The list of persons who can be engaged as BCs was further expanded to include individuals like retired bank employees, retired teachers, retired government employees and ex-servicemen, individual owners of kirana / medical /Fair Price shops, individual Public Call Office (PCO) operators, agents of Small Savings schemes of Government of India/Insurance Companies, individuals who own Petrol Pumps, authorized functionaries of well run Self Help Groups (SHGs) which are linked to banks. Any other individual including those operating Common Service Centres (CSCs) are also allowed to act as BCs of banks.

The following PRODUCTS are offered through the BC CHANNEL :

• Small Savings Accounts
• Fixed DEPOSIT and Recurring Deposit with low MINIMUM deposits
• Remittance to any BC customer
• Micro Credit
• General Insurance.

The following products are offered through the BC Channel :

BCs are permitted to PERFORM a variety of activities which include identification of borrowers, attend to collection of small value deposit, disbursal of small value credit, recovery of principal / collection of interest, SALE of micro insurance/ MUTUAL fund products/ pension products/ other third party products and RECEIPT and delivery 7 of small value remittances/ other PAYMENT instruments, creating awareness about savings and other products, education and advice on managing money and debt counseling, etc.

BCs are permitted to perform a variety of activities which include identification of borrowers, attend to collection of small value deposit, disbursal of small value credit, recovery of principal / collection of interest, sale of micro insurance/ mutual fund products/ pension products/ other third party products and receipt and delivery 7 of small value remittances/ other payment instruments, creating awareness about savings and other products, education and advice on managing money and debt counseling, etc.

Business Correspondents are retail agents engaged by banks for providing banking services at LOCATIONS other than a bank branch/ATM. BASICALLY, BCs enable a bank to expand its outreach and offer limited range of banking services at low cost. BCs, are an INTEGRAL PART of a business strategy for achieving greater financial INCLUSION.

Business Correspondents are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. Basically, BCs enable a bank to expand its outreach and offer limited range of banking services at low cost. BCs, are an integral part of a business strategy for achieving greater financial inclusion.