NEWS
- 25 March | The Honest UPSC Talk Nobody Tells You Click Here to see Abhijit Asokan AIR 234 talk →
- 10 March | SFG Folks! This dude got Rank 7 in CSE 2025 with SFG! →
- 10 March | SFG Folks! She failed prelims 3 times. Then cleared the exam in one go! Watch Now! →
News: The Reserve Bank of India proposed restructuring of Business Correspondent framework with new classification, governance norms, and remuneration standards, inviting comments.
About RBI Revises Banking Correspondent Classification
- It introduces a structured framework with defined delivery points, governance norms, and remuneration standards to improve efficiency and oversight.
- Business Correspondents (BCs): Business Correspondents are individuals or entities engaged by banks to provide basic banking services in areas where bank branches are not present.
- Effective Date: The framework will come into force from July 1, 2026, with transition timelines up to September 30, 2026 for classification and migration.
- Key Features:
- Types of Delivery Points: The draft defines three delivery points—Branch, Business Correspondent- Banking Outlet (BC-BO) and Business Correspondent- Banking Touchpoint (BC-BT) for service delivery.
- Transition of Business Facilitators: The draft removes the separate category of Business Facilitators, and existing entities must transition into BC-BO or BC-BT by September 30, 2026.
- Functioning of BCs: BC-BOs will operate as fixed service units for at least four hours daily and five days a week, while BC-BTs will provide limited services such as small-value transactions and remittances with flexible hours.
- Recognition: BC-BOs will be treated as banking outlets for regulatory purposes within the framework.
- Coverage: The presence of BC-BOs will be considered for classification of centres as banked, including unbanked rural centres.
- Governance: Banks must adopt Board-approved policies and review BC operations at least once every six months.
- Accountability: Banks will remain fully responsible for the acts of BCs and their sub-agents.
- Remuneration: BC-BOs will receive a combination of fixed and variable pay, while BC-BTs will receive only variable pay.
- Operations: All transactions must be conducted online and integrated with core banking systems, along with customer protection safeguards.
- Training and Certification: Individuals operating BC-BOs must obtain advanced certification, while those operating BC-BTs must complete basic training or certification within prescribed timelines.
