Sunil Kulkarni

Sunil Kulkarni

India has 650,000 villages and 213,575 ATMs and 158,000 Commercial Bank branches as on March 2021. While Bank branches are predominantly in cities, of these ATMs, only 98,000 ATMs are Offsite ATM, i.e. ATMs away from bank branches. An estimated 70% of these Offsite ATMs are in cities leaving a very small 25,000-30,000 ATMs to service cash needs to 650,000 villages. Considering this large gap, the Reserve Bank of India in 2005 through their guidelines, initiated what is today a very popular model of Business Correspondent (BC) to Banks, extending basic banking to the unbanked/under-banked. Pradhan Mantri Jan Dhan Yojana (PMJDY) ensured that Indian became largely banked with each household having a bank account, however, the responsibility of servicing cost efficiently these bank accounts fell on corporates that could set up Fintech platforms and connect to banks on one end and on the other side provide access to agent in the village level through Aadhaar enabled Smart Phones, PCs or MicroATMs to bring what we popularly call JAM (Jan Dhan-Aadhaar-Mobile) Trinity to sub-urban and rural India also called “Bharat”.

These Corporate Business Correspondent (CBCs) are the live wire & crucial last mile link between service providers (banks, insurance, pension etc.) and customers. Corporate BCs today  manage a huge and growing network of over 10 Lakhs + unique Agent Business Correspondents, also called Customer Service Points (CSPs) to serve millions of financially excluded. The services of CBCs have now expanded to include facilitation, disbursement and collection of loans, Direct Benefit Transfer (DBT) cash disbursement, Insurance, Bharat BillPay and assisted eCommerce apart from basic banking services of account opening, cash-in/cash-out & domestic remittance. However, basic banking services account for a major portion of transactions at CSP locations and it will be endeavour of BCFI over a period of time, through its networking initiative, to push CBC members to other remunerative services for long term viability.

In August’14, Business Correspondent Federation of India or BCFI was set up as BC sector’s apex national body is discharging a crucial role in consolidating the sector participants and becoming a well-recognized platform for raising, debating, resolving issues that affect the sector’s growth and viability. Federation is ab initio contributing to policy, regulations & their formulation.

In the midst of the pandemic, BCFI is now setting up Framework and Processes to transition itself to the Self-Regulatory Organisation of Corporate BCs and CSPs. Even in these challenging times, the energy and commitment shown by BC industry is exemplary and the Finance Ministry has appropriately named BCs as “Covid Worriers”.

My best wishes to all Corporate BCs to welcome you all to BCFI and contribute to the Financial Inclusion and Digitisation process for “Bharat”. I look forward to both your contribution as well as critical suggestions.