Banking correspondent outlets
About Banking correspondent outlets
Banking correspondent outlets are local service points run by Business Correspondents (BCs) that provide basic banking services on behalf of a bank, usually in areas without regular branches or ATMs.​
Basic idea
- A banking correspondent is an agent of a bank (individual or entity) engaged to offer banking services in unbanked or underbanked areas.​
- The retail outlet where this agent actually meets customers and conducts transactions is termed a banking outlet/BC outlet.​
Regulatory definition (RBI)
- RBI defines a “banking outlet” as a fixed-point service unit manned either by bank staff or by a Business Correspondent, providing banking services for at least 4 hours a day and 5 days a week.​
- Such outlets are treated as part of the bank’s network and are subject to norms on distance from base branch, cash holding limits, KYC, grievance redress etc.​
Services offered at Banking correspondent outlets
- Opening of basic savings accounts, e-KYC based accounts, and small-value deposit accounts.​
- Cash deposits and withdrawals, small-value remittances, disbursal and collection of small loans, and sale of micro-insurance, pension or other third-party products as permitted.​
Role in financial inclusion
- Banking correspondent outlets substitute for brick-and-mortar branches in remote villages, reducing banks’ operating costs while extending last-mile access to formal finance.​
- In rural India, a very high share of banking access points are now through BC/banking correspondent outlets, making them central to the financial inclusion strategy.​
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