Money & Banking

Business correspondents face shortage of cash, travel restrictions in rural areas

Mumbai | Updated on March 27, 2020

Business correspondents have highlighted a shortage of cash in rural areas and difficulties in travel due to the nationwide lockdown to prevent the further spread of coronavirus.

“We are in talks with banks and bank branches to provide more cash to business correspondents. We are also in discussions with local petrol pumps on re-using the cash they have,” said Sunil Kumar, Director General, Business Correspondent Federation of India (BCFI), adding that the situation can aggravate in the next five to seven days.

The BCFI, in a statement, also highlighted that there will be severe cash crunch in rural India with just 25,000 ATMs across 6.5 lakh villages

According to Seema Prem, Co-founder, FIA Technology Services, many rural bank branches are shut down and others are rationing the cash with them. “Bank mitras rely on link branches. Banks are not able to move cash from chest to various link branches. We are seeing this problem across most States,” she said.

Announcing the ₹1.7-lakh-crore economic package, Finance Minister Nirmala Sitharaman had said that banks and bank branches, ATMs, and banking correspondents are all essential services and will continue to work during the lockdown.

Talks are on with banks to ensure steady supply of cash at rural bank branches, said Amit Jain, Chief Business Officer, Fino Payments Bank.

According to industry data, just 30 per cent of the bank mitras or BCs in rural areas, continue to work at present. BCFI has also urged the government for a relief package of ₹5,000 for the next three months for each business correspondent. “This is less than 0.5 per cent of the ₹1.7-lakh-crore economic package. It will motivate the BC ecosystem to offer uninterrupted services and ensure the benefits of the relief package reach the intended and they can access the cash,” said Anand Kumar Bajaj, Managing Director and CEO, PayNearby.

Meanwhile, to incentivise BCs to continue, Bank of Baroda, on Friday, announced a financial support of ₹2,000 each to active and functional agents towards maintenance of hygiene at their outlets for purchase of sanitisers, disinfectants, masks, gloves, and the amount has been already credited directly to their accounts.

“Further, the bank has encouraged the BC agents to extend their continued services during this difficult period, and has also decided to incentivise them by paying ₹100 per working day to every active BC agents towards transportation for extending services from 10 am to 5 pm by performing at least five transactions,” it said, adding that the facility will be available till April 14.

Published on March 27, 2020

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like