By Sushil Singh Charak
@the_news_21
Jammu: The Central Bank of India recently held a Business Correspondent (BCs) meeting in Jammu with an aim to provide banking and financial services at one’s doorstep and increasing the banks reach in Jammu region.
The Reserve Bank of India (RBI) has taken several initiatives over the years for increasing banking outreach and ensuring greater financial inclusion. A significant step in this direction was the issue of RBI guidelines in January 2006 for engagement of Business Correspondents (BCs) by banks for providing banking and financial services. Since then, the regulatory framework for the BC model has been progressively honed to ensure that consumer protection is not compromised while facilitating enhanced outreach of banking services.
The relaxation in the regulatory framework was made possible due to the rapid changes in technology –both in terms of Core Banking Solution (CBS) as also relatively low-cost biometric hand-held devices for ensuring authenticity and fraud prevention. The circulars issued by the Reserve Bank of India on the subject are listed at the end of this paper. Business Correspondents are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM.
Banks are required to take full responsibility for the acts of omission and commission of the BCs that they engage and have, therefore, to ensure thorough due diligence and additional safeguards for minimizing the agency risk. Basically, BCs enable a bank to expand its outreach and offer limited range of banking services at low cost, as setting up a brick-and-mortar branch may not be viable in all cases.
The BCs, thus, are an integral part of a business strategy for achieving greater financial inclusion. BCs are permitted to perform a variety of activities which include identification of borrowers, collection and preliminary processing of loan applications including verification of primary information/data, creating awareness about savings and other products, education and advice on managing money and debt counselling, processing and submission of applications to banks, promoting, nurturing and monitoring of Self Help Groups (SHGs)/ Joint Liability Groups (JLGs), post-sanction monitoring, follow-up of recovery.
They can also 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 of small value remittances/ other payment instruments.
The Business Correspondents meet was presided over by the bank’s Regional Head, Amritsar, Rajneesh Sharma. Janak Kumar Senior Branch Manager Bari Brahmana, Sagar Gupta Senior Manager Central Bank of India Branch Gandhi Nagar, Jammu, H.K Sahdev Vice President Relisec Consultancy Services Pvt. Ltd, Mohit Sandhu Operator Head RELISEC, Supervisor RELISEC Shiv Dubye, Ladakhi Showkat Ali Marketing Officer, CBI, Vikas Kumar Assistant Manager CBI, Sushil Singh Charak Business Correspondent and other bank officials. The meet was attended by a group of valuable customers including senior and prominent citizens of the society.
