Promoting Financial Inclusion - United Nations Development ...

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ANNEX 2: SALIENT FEATURES OF BC MODEL Applicable to Eligible individual/ entities as BC Scope of activities may include KYC norms Customer confidentiality Information technology standards Guidelines for engaging BCs The scheduled commercial banks including RRBs and Local Area Banks (LABs). The banks may formulate a policy for engaging BCs with their Board’s approval and due diligence. • Individuals like retired bank employees, retired teachers, retired government employees and ex-servicemen, individual owners of kirana/medical /fair price shops, individual PCO operators, agents of small savings schemes of GoI/Insurance Companies, individuals who own petrol pumps, authorized functionaries of well run SHGs which are linked to banks, any other individual including those operating Common Service Centres (CSCs) • NGOs/ MFIs set up under Societies/ Trust Acts and Section 25 Companies • Cooperative Societies registered under Mutually Aided Cooperative Societies Acts/ Cooperative Societies Acts of States/Multi State Cooperative Societies Act; • Post Offices; and • Companies registered under the Indian Companies Act, 1956 with large and widespread retail outlets, excluding NBFCs. While a BC can be a BC for more than one bank, at the point of customer interface, a retail outlet or a sub-agent of a BC shall represent and provide banking services of only one bank. The banks will be fully responsible for the actions of the BCs and their retail outlets / sub agents. • Identification of borrowers; • Collection and preliminary processing of loan applications including verification of primary information/data; • Creating awareness about savings and other products and education and advice on managing money and debt counselling; • Processing and submission of applications to banks; • <strong>Promoting</strong>, nurturing and monitoring of Self Help Groups/ Joint Liability Groups/Credit Groups/others; • Post-sanction monitoring; • Follow-up for recovery, • Disbursal of small value credit, • Recovery of principal/collection of interest • Collection of small value deposits • Sale of micro insurance/ mutual fund products/ pension products/ other third party products and • Receipt and delivery of small value remittances/ other payment instruments. The above activities can be conducted by BCs at places other than bank’s premises/ ATM. Banks may use the services of BC for preliminary work relating to account opening formalities. However, ensuring compliance with KYC and AML norms under the BC model continues to be the responsibility of banks. The banks should ensure the preservation and protection of the security and confidentiality of customer information in the custody or possession of BC. The banks should ensure that equipment and technology used by the BC are of high standards. 66 PROMOTING FINANCIAL INCLUSION
Distance criterion Payment of commission/ fee Guidelines for engaging BCs For ensuring adequate supervision, the distance between the place of business of a retail outlet/sub-agent of BC and the base branch should ordinarily not exceed 30 km in rural, semi-urban and urban areas and 5 km in metropolitan centres. In case there is a need to relax the distance criterion, the District Consultative Committee (DCC)/State level Bankers Committee (SLBC) could consider and approve relaxation on merits in respect of under-banked areas. The banks may pay reasonable commission/ fee to the BC but the BCs cannot charge any fee to the customers directly for services rendered by them on behalf of the bank. The commission structure should be devised in a manner that mere increase in the number of clients served or the transaction volume does not drive the commission. It should include some element of customer satisfaction. The banks (and not BCs) are permitted to collect reasonable service charges from the customers in a transparent manner. RBI Circular, 28 September 2010. RBI/2010–11/217 DBOD.No.BL.BC.43 /22.01.009/2010–11. PROMOTING FINANCIAL INCLUSION 67
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Disclaimer: FICCI The information a
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Please contact FICCI at: E-mail: fi
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4.13 Conclusions - inclusion constr
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to this study is greatly acknowledg
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FITF FLCC FMCG FSM GCC GoI HDI ICAI
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x EXECUTIVE SUMMARY
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metropolitan centres so this does n
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• Historical problems such as the
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FIGURE Yields in the Banking System
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1 Background Inclusive economic gro
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financial services as it has implic
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• Providing financial services ac
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The analysis of region-wise credit
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…WHILE PROGRESS UNDER OTHER GOVER
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The contribution of SBLP to financi
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provide remittance services due to
Page 35 and 36: terms of number of borrowers, the S
Page 37 and 38: 4 The Policy Conundrum - Is It Prud
Page 39 and 40: BCs. These BCs have been able to op
Page 41 and 42: 4.3 MICRO-INSURANCE REGULATIONS 14
Page 43 and 44: crore as grant support for promotio
Page 45 and 46: IMPROVING THE QUALITY OF MANAGEMENT
Page 47 and 48: norms. However, the banks still nee
Page 49 and 50: at the prime lending rates of banks
Page 51 and 52: exchange, loan products and card pr
Page 53 and 54: prefer to transact with banks only
Page 55 and 56: use of smart cards, mobile technolo
Page 57 and 58: • Limited number of FLCCs: One of
Page 59 and 60: savings, and this has ultimately af
Page 61 and 62: 6 The Way Forward The Government of
Page 63 and 64: price for those provided services o
Page 65 and 66: Case Studies of Financial Inclusion
Page 67 and 68: each located at least 1-2 km apart
Page 69 and 70: Officer (CEO) with support from the
Page 71 and 72: course fee to successful candidates
Page 73 and 74: • Commission structure: The BC ag
Page 75 and 76: on a single card. In the field, the
Page 77 and 78: Box C.7 Field Visit Observations fr
Page 79 and 80: operations management and portfolio
Page 81 and 82: convince new account openers to obt
Page 83 and 84: Annexes ANNEX 1: PRINCIPLES OF CLIE
Page 85: • Customers are informed of their
Page 89 and 90: Financial Inclusion Fund Promotion
Page 91 and 92: Package Key features Reforms in the
Page 93 and 94: Activities Amendments of rules and
Page 95 and 96: Activities Computerisation Status G
Page 97: RBI, 2009, “Financial deepening b
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