Financial Inclusion: Business Correspondents Demand Higher Commission

New Delhi, Oct 28 (PTI) Business Correspondent Resource Council (BCRC) has sought higher commissions for agents for various services provided by them to drive financial inclusion.

The Banking Correspondent industry and BCRC have been demanding at least a 30 basis points hike in the commission paid to the agents. The commission has remained unchanged for the past many years even as financial inclusion has been picking up, leading to increased expenses for the agents.

Generally, the commission is paid by banks and certain other institutions.

According to BCRC, the current commission to BCs ranges from Rs 5 to Rs 20 for opening savings bank accounts, Rs 2 for enrolling a beneficiary in Pradhan Mantri Suraksha Bima Yojana (PMSBY), Rs 15-30 for Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Rs 80-100 for Atal Pension Yojana (APY).

The Reserve Bank of India initiated the BC model in 2006 to expand financial access by creating an extensive network of village-level touchpoints. Business Correspondents are agents engaged by banks to provide banking services and non-financial services at locations other than a bank branch and ATM.

BCs as agents of banks have more than 10 lakh Customer Service Points (CSPs)/bank mitras across the country.

BCRC CEO Dharanidhar Tripathy said BCs are playing a very important role in financial inclusion, including the expansion of social security schemes, in the country.

According to him, of the nearly 53.81 crore accounts under the government's flagship Pradhan Mantri Jan Dhan Yojana (PMJDY), more than 45 crore accounts were opened by Business Correspondents.

Further, BCs have facilitated enrolment of more than 80 per cent of beneficiaries under the PMSBY, PMJJBY and APY.

Tripathy also informed that BCs have mobilised more than Rs 1,50,000 crore in small deposits in the bank.

After the launch of the BC model in 2006 by the RBI, BCs have put in a lot of hard work, developed financial architecture and changed the rural landscape, covering the uncovered and securing the unsecured, he added.

"Commission, which is paid to BCs for various financial services has not been revised for years together (5 to 10 years). If some banks have revised, it is in a downward trend," Tripathy said.

BCRC recently made a representation to Minister of State for Finance Pankaj Chaudhary.

Tripathi said the minister was kind enough to listen to the grievances and assured to look into the issues.

The industry players also said banks impose a penalty on them in case they are not able to meet the targets due to natural calamities, and other weather-related matters.

BCRC is also demanding a re-examination of the penalties imposed by banks on business correspondents, besides setting up an annual pricing review committee.

Meanwhile, BCRC will be organising a national-level seminar in December on deepening and widening financial inclusion in the national capital.