Banking correspondants are representatives of banks (commericial banks, RRB) who help in facilitating banking services to customers. Click to know more.

What are banking correspondents?

Any individual, corporation society, business entity, society, NGO etc. Providing banking services in the areas where they’re in no facility of a bank branch or ATM are termed as banking/business correspondents.

Individuals are generally retired bank employee’s, ex. Servicemen retired post officials or any other interested person.


Facilities provided by banking correspondents –

  • Opening saving accounts
  • Accepting deposits of smaller amounts
  • Releasing payments
  • Spreading awareness about mutual funds, insurance schemes and other saving schemes.
  • Also, help in opening fixed deposits etc.

Advantages of BC’s –

Banking correspondents are highly advantages in achieving the goal of financial inclusion which is not just opening of bank accounts but an array of many other aspects which are being precisely done by BC’S

  • Provide last mile connectivity
  • Work in places where bank staff is unwilling to go.
  • Cost savings of bank as there is no need to open branches in remote areas.
  • BC’s understand the local issues, typography etc. So better cooperation with customers.
  • High custom satisfaction

Issues faced by BC’S –

  • The KYC process is ambiguous so most of the times only bank officials are asked to go in the field for KYC verification.
  • Infrastructure deficit like power and poor digital connectivity causes transactions to fall.
  • RBJ’s restriction for one entity to be a BC for only one bank has reduced incentive.
  • Banks are unwilling to upkeep the small savings account as the cost is higher.

Increasing digital connectivity through Bharatnet, providing some fixed account as allowance and more clarity on KYC verification to banking correspondents can prove to be highly effective for increasing the width of financial inclusion in the country, leading to a better life for citizens.

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