Role of Business Correspondents (BCs) in Financial Services – Reaching in Unreached Rural Areas – A Case Study in Tamil Nadu

Abstract

BCs are honest workers working in rural India, elevating the country from the viewpoint of financial services to world-level recognition in terms of financial inclusion by opening bank accounts and collecting deposits, as well as other financial services having networks with commercial banks. As per the Reserve Bank of India’s (RBI) FY22 annual report, the total number of business correspondents in villages has increased from more than 11.9 lakh in 2020 to 18.44 lakh in 2021, reflecting the penetration and scale that banks generate partnering with BCs. Ultimately, the rural people who opened a bank account under PMJDY got the benefit. With this background, the study has attempted to study the role played by the BCs in rural areas and to find the problems faced by the BCs, especially women, while rendering services. This present research is carried out based on a case study method and is descriptive in nature. The study was undertaken purposefully in two districts of Tamil Nadu, Dharmapuri and Dindigul. In Dharmapuri, the Indian Bank Morappur Branch and in Dindigul District, the Canara Bank Gandhigram Branch have been selected for the study. It was concluded that the average salary for the BCs here ranges between Rs. 3000 and Rs. 6000. It should be increased considerably; otherwise, the BCs will try to charge additional money from the account holder for their doorstep services. Adopting the BC model in the cooperative sector leads to faster financial inclusion.