Business correspondent (BC) outlets, which are designed to cater to the banking needs of customers located in the hinterlands, fell sharply by over 2.37 lakh between 2023 and 2024, according to Reserve Bank of India (RBI) data.
BCs in villages dropped from over 15.92 lakh in December 2023 to 13.55 lakh in December 2024, while in urban locations BCs rose slightly to 3.67 lakh in December 2024 from 3.58 lakh in the previous year. BCs enable basic account opening, Aadhaar seeding, issuance of RuPay debit cards, payments and KYC services. In addition, they also provide loan, deposit sourcing and recovery services, among others.
“BCs’ margins have crashed as more people are doing digital transactions themselves. The IBA has also mandated that training of BC agents will required before appearing for the BC Certification examination, which dis-incentivise people, especially individual BC agents. There has also been a rise in frauds at BCs,” a senior banker said.
According to Devidas Tuljapurkar, President, Maharashtra State Bank Mitra Association, BCs were initially appointed directly by banks. However, the model has now evolved with banks increasingly engaging with BCs through service providers, which are often corporate entities.
“These corporate, in turn, work with local-level service providers, who deploy individual BCs in the field. This layered structure helps expand outreach, ensure localised presence and improve service delivery in remote and underserved regions,” he said.
However, Tuljapurkar says there is no Standard Operating Procedure (SoP) for engaging BCs nor a defined one for their day-to-day operations. Their job profiles are not clearly outlined, and their service conditions are not codified. Individual BC agents lack job security, career progression and their area of operation is undefined.
Initial investments
Experts say BCs are required to make initial investments, including arranging property for operations, laptop, data card and other essential infrastructure at their own expense — they also incur fuel and transportation costs. Despite these requirements, the commission rates BCs receive are so insignificant that many are unable to sustain their operations.