Financial Inclusion White Paper - NCR

5.3 Multi Channel Delivery Models
5.3.1 Business Correspondents - Agent Model
The Business Correspondent (BC) model has been recommended by the RBI to
provide an alternative structure to branch-based banking to achieve financial
inclusion. The Business Correspondent is an agent authorized to undertake
transactions for pre-defined levels of cash on behalf of a specific financial
institution.
Several microfinance institutions, self-help groups, public and private sector
rural banks follow this model to reach out to the geographically diverse
population. Agents have the advantage over bank branches as they can
deliver ‘doorstep’ banking across the geographical landscape, overcoming
regional barriers of language and culture, and inadequate infrastructure in
rural and slums.
The BC is increasingly aided by technology enablers such as a point of service
handheld devices, mobile phones and a biometric scanner.
Although, being a key delivery channel, the agent model has restrictions of
scale as well as security. While, technology can improve speed of delivery,
security and accuracy, agents will always be restricted by the sheer size of
their territory.
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