The Microfinance Review

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Business Correspondents: A Boon for Rural Branches and A Tool for Financial Inclusion


Affiliations
1 BIRD, Lucknow, India
2 GM, NABARD, Head Office, Mumbai, India
     

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More than 37 crore bank accounts have been opened as part of the PM Jan Dhan Yojana out of which over 22 crore accounts were opened in rural and semi urban branches. Banking Correspondents (BCs) are doing yeomen service at village level, providing last mile financial access. Women Self-Help Group (SHG) members are positioned as Business Correspondent Agents (BCAs), also known as Bank Sakhis. The male BCs of the banks are referred to as Bank Mitras. This paper examines the operations of three BCAs and two BCs attached to the Mohan branch of Aryavart Bank. The major observations are, one, BCAs serve as a single point for banking services for all banks, and two, majority of transactions are of lower value. Bank Sakhis, which started off as an experiment, has grown into full scale implementation at Aryavart Bank and is now being replicated across the country. The replication has to be preceded by capacity building of such Bank Sakhis.

Keywords

Business Correspondent, Bank Sakhi, Bank Mitra.
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  • GIZ – NABARD Rural Financial Institutions Programme (2015): SHG Members as Bank Agents – TheBank Sakhi Model - Approach and Lessons from Two Pilot Projects. Accessed from https://www.giz.de/en/downloads_els/sakhimodel.pdf

  • NABARD (2015): SHG Members as Bank Agents: Experiences from Two Pilot Projects in Uttar Pradesh and Madhya Pradesh-October 2015, Zusammenarbeit (GIZ) GmbH, New Delhi. Accessed from https://www.giz.de/en/downloads_els/experi1449818805004_66.pdf

  • Reserve Bank of India (2014): “Financial Inclusion by Extension of Banking Services – Use of Business Correspondents”, Circular No. RBI/2013-14/653DBOD.No.BAPD. BC.122/22.01.009/2013-14 dated 24th June 2014.


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  • Business Correspondents: A Boon for Rural Branches and A Tool for Financial Inclusion

Abstract Views: 347  |  PDF Views: 0

Authors

M. K. De
BIRD, Lucknow, India
Bhallamudi Sridhar
GM, NABARD, Head Office, Mumbai, India

Abstract


More than 37 crore bank accounts have been opened as part of the PM Jan Dhan Yojana out of which over 22 crore accounts were opened in rural and semi urban branches. Banking Correspondents (BCs) are doing yeomen service at village level, providing last mile financial access. Women Self-Help Group (SHG) members are positioned as Business Correspondent Agents (BCAs), also known as Bank Sakhis. The male BCs of the banks are referred to as Bank Mitras. This paper examines the operations of three BCAs and two BCs attached to the Mohan branch of Aryavart Bank. The major observations are, one, BCAs serve as a single point for banking services for all banks, and two, majority of transactions are of lower value. Bank Sakhis, which started off as an experiment, has grown into full scale implementation at Aryavart Bank and is now being replicated across the country. The replication has to be preceded by capacity building of such Bank Sakhis.

Keywords


Business Correspondent, Bank Sakhi, Bank Mitra.

References