Money & Banking

Unions divided over allowing biz correspondents to serve other bank customers

A. J. Vinayak Mangalore | Updated on November 14, 2017 Published on March 19, 2012

Move to allow business correspondent of one bank to serve customers of others has evoked mixed response from unions.

While one bank union opposed it, another said that it does not have any problem if the business correspondent (BC) restricts itself to basic services.

In a circular dated March 2, the RBI decided to permit interoperability of business correspondents (BCs) at the sub-agent or at retail outlet level, provided the technology available with the bank, which has appointed the BC, supports it.

However, it is subject to the condition that the transactions and authentications at such retail outlets or sub-agents are carried out online, and on CBS platform. It also stated that the BC or sub-agent at the point of customer interface would continue to represent the bank, which has appointed the BC.

Mr K. S. Bhat, All-India Secretary of Syndicate Bank Staff Association, said the decision of the RBI would undermine the present set-up of the banking industry.

Will create ‘hassles'

He said there would be laxity and hassles at all levels if the business correspondents are allowed to tie up with more than one bank.

Mr D. N. Prakash, President of Corporation Bank Officers' Organisation, said that a BC basically mobilises accounts and allows withdrawal to customers.

“We don't have any problem if they stick to basic activities under this move. We will object, if BCs venture into core activities such as credit appraisals,” he said.

Mr Bhat said that the RBI should take into account that most of the banks are still in at the primary stage as far as CBS is concerned.

In some cases, customers may not know the name of the bank, whereas they know only the BC. All these aspects should be taken into account before permitting the BCs to allow providing service to other banks, he added.

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Published on March 19, 2012
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