A Reserve Bank of India constituted working group has suggested measures to enlarge the category of persons/entities that could act as business correspondents (BCs) of banks, after examining the various regulatory and other incidental issues relating to the model.

The group has recommended shop owners, individual public call office operators and retired teachers as BCs of banks in rural and semi-urban areas.

Other recommended groups include: agents of small savings schemes of the Central Government or insurance companies; individuals who own petrol pumps; authorised functionaries of well run self help groups (SHGs) linked to banks; non-deposit taking non-banking finance companies in the nature of loan companies whose micro finance portfolio is not less than 80 per cent of their loan outstanding in the financially excluded districts as identified by the Committee on Financial Inclusion chaired by C. Rangarajan. While making this recommendation, the RBI working group has expressed the view that banks would need to accept the BC model as extremely vital for achieving the goals of financial inclusion.

It may be recalled that the RBI, in January 2006, permitted banks to use intermediaries as business facilitators (BFs) or business correspondents (BCs) for providing financial and banking services. As per the current guidelines, NGOs/MFIs set up under Societies/ Trust Acts, societies registered under Mutually Aided Cooperative Societies Acts or the Cooperative Societies Acts of States, Section 25 companies that are stand alone entities or in which NBFCs, banks, telecom companies and other corporate entities or their holding companies did not have equity holdings in excess of 10 per cent, post offices and retired bank employees, ex-servicemen and retired government employees can act as BCs of banks.

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