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Demonetisation: Business correspondents under pressure

With the demonetisation of Rs. 500 and Rs.1000 notes, the Business Correspondents (BCs) of the banks “are under pressure”. They are facing challenges such as non-availability of cash and UV lamps to detect counterfeit notes.

The Central government allowed the BCs to exchange notes up to Rs. 4000 per person against valid identity proofs and requisition slips. But a majority of the banks could not provide enough cash to them.

Many banks, industry sources say, focus more on urban areas. Their attention is more on exchange of old notes and replenishment of cash in the ATMs in cities and towns leading to problems for the BCs. The banks have begun distributing cash to them on Saturday, sources say. “They are doing a good job. But they are under pressure,” said an SBI official, who did not want to be named.

Another major reason is the norm that a BC is not supposed to hold more than Rs. 50,000. Even if a BC does a business over and above the cash holding limit, he or she has to deposit it with the bank branch concerned. So, the BC has to run to the bank as soon as he touches Rs. 50,000 business and return to his village to continue the transactions.

“There is not much inconvenience. The BCs are remitting the amount in branches attached to them after 10 to 15 transactions have been done. There is pressure on branches also,” said a senior official of Andhra Bank.

Some banks like the Indian Bank conducted a training session to the BCs on the modalities and precautions. The BCs had been told to maintain separate registers containing names and other details of account holders exchanging the notes. “This will help them in zeroing in on the person who might deposit counterfeit notes,” said an Indian Bank official.

There are around 6,500 BCs working for various banks in AP. About half of 1,800 BCs of the Andhra Bank are located in AP alone. There are about 8,000 sub-service areas, meaning they do not sustain a brick-and-mortar branch. Therefore, banks chose BCs as the next possible alternative to serve the people there.

A majority of the banks haven’t provided UV lamps and machines to detect the counterfeit notes.

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