Foot soldiers battle low pay

Business correspondents (BCs) have played a stellar role in increasing the reach of banking services to the unbanked and underserved segments across the country. And the numbers prove it.

- 

Of the 72 crore basic savings bank deposit accounts (BSBDAs), including the Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts, that were opened as of December-end 2024, 62 per cent came through BCs and the rest through bank branches, according to the latest RBI data.

Further, of the total outstanding balance of Rs. 3,04,715 crore in BSBDA accounts, the balances in accounts opened through BCs and bank branches accounted for 52 per cent and 48 per cent, respectively.

As part of efforts to promote financial inclusion and bring vast sections of the population into the banking fold, the RBI, in November 2005, asked banks to make available a basic 'no-frills' banking account, either with 'nil' or very low minimum balance, as well as charges.

In 2012, in order to do away with the stigma associated with the nomenclature 'no-frills', banks were directed to offer BSBDAs.

This account doesn't require maintenance of minimum balance and earns the usual interest on savings.

For the debit card, there are no issuance or annual maintenance charges.

The free services in BSBDA include deposit and withdrawal of cash; and receipt/ credit of money through electronic payment channels or by means of deposit/ collection of cheques at bank branches and ATMs.

In August 2014, the government gave a big push to financial inclusion through PMJDY accounts, providing one basic bank account for every unbanked adult. These are in the nature of BSBD accounts, with an additional facility of a RuPay debit card with accident insurance coverage of Rs. 2 lakh and overdraft facility of up to Rs. 10,000.

Under the BC model, nongovernmental organisations/ microfinance institutions can act as BCs.

Shoulder to the Wheel