THE BASICS OF THE BUSINESS CORRESPONDENTS BANKING CHANNEL / BUSINESS FACILITATOR BANKING CHANNEL | BANK PROMOTION FREE NOTES | 2024
In this article, we will be reading about the business correspondents and business facilitators from the common topic which Falls under the syllabus of bank promotion 2024 of almost all banks. So, if you are writing we are banks promotion exam (SBI, BOI, BOM, PNB, BOB, CANARA, CBI, UCO, UBI or PNB) this year, whether it’s for scale-1 or scale 2 or scale 3 or 4, then this article is for you.
BCs are permitted to carry out transactions on behalf of the bank as agents.
BFs can refer clients, pursue the clients’ proposal and facilitate the bank to carry out its transactions, but cannot transact on behalf of the bank.
NEW BANKING CHANNEL: Number of channels are operated by banks through which financial services are delivered. Some of the channels are bank branches, automated teller machines and internet banking are the traditional ones. The business correspondent, in short, BC, is a new banking channel through which the services of banks are extended. Proper guidelines have been written for the use of the channel under which it has been acquired that the bank has to be involved and has to be the ultimate provider of banking services.
REGULATION & RESPONSIBILITY: Reserve bank of India overseas and regulate this banking channel its normal regulator regime and the principal Bank Se means responsible for the acts done by their correspondence.
BC/BF model: The model of business correspondent or business facilitator is ineffective way through which banks can reach the the areas which haven’t been reached before. In this system, there is no need to invest high cost in infrastructure in areas where there are no banks. This channel is also able to reach the people who haven’t been able to access the banking services.
To make it happen, a large number of BC & BFs have been employed by the bank across the country. These BC/BFs act on behalf of banks as their agents who are able to reach the rural areas making the dream of an financial inclusion a reality.
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ADVANTAGES OF USING BC / BF
The benefits of employing BC/BFs are mentioned below:
Better Alternative – BC/BFs serve as an alternative than establishing Rural Bank branches. While the bank branches in rural areas can serve up to 3000 to 4000 families in the total of 12 to 15 villages, there business correspondence are able to reach the same at a much faster speed while at lower cost. And what do we even say about the public sector banks which even require more than five years to reach the and you’ve reached areas in India!
Unreached Areas Accessible- This model has enabled the banks to provide financial services to the clients which work beyond their network. Now those clients can be reached through business correspondents instead.
Banking at Doorsteps – This has also provided the option to provide the financial or banking services at the door steps of the customers or beneficiaries.
Better Assets quality – The local non-government organisations, post offices and other local social bodies no exactly who their target clients are. Does taking the services of them as business correspondence who are actually in the context of the target clients hugs and enhancing the quality of assets.
Growth of Business: This model is the perfect way to scale up the business in very short period of time.
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BUSINESS CORRESPONDENTS or BUSINESS FACILITATORS (BC/BF) OBJECTIVES
The main aim of employing business correspondents or business facilitators are discussed below:
- Identification of potential customers
- It is another way to advise or council the village people about various product and services which are helpful to them.
- To help villages complete the formalities which are needed when their transact with the banks.
- To educate the customer is about the terms and conditions at which the loans are sanctioned, the process of repayment and the recovery procedures.
- To help the rural people in transacting in small and basic transactions.