Objectives and Roles of the BC Model of Banking

Objectives and Roles of the BC Model of Banking

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BCs or, the Business Correspondents are people or gatherings (like NGOs, gram panchayats, social orders and so forth.) who go about as the agents of Banks to give Banking administrations in rustic or semi-metropolitan regions. The BCs carry mobile phones, micro-ATMs, receipt generators, and other devices for taking thumb impressions or digital signatures in order to make the facilities available to the general public. for villagers' easy access to financial services. Without setting up a full-fledged bank branch, a BC can be thought of as a bank in person that collects small deposits, gives loans, and does other basic banking tasks.

There are numerous responsibilities for a Business Correspondent (BC). Some important ones are as follows:

• Educating the population that does not have access to a bank about the significance of banking, investment options, deposit schemes, interest rates, and other topics.

• Assisting customers in opening bank accounts, making fixed or recurring deposits, and collecting money to deposit in their own or beneficiary accounts;

• Recovering loan installments, EMIs, payments, and fees;

• Selling a variety of banking products for insurance, mutual funds, pension plans, and more;

• Disbursing small loans and providing receipts for all banking transactions.

Goals of the BC Model - Banks will benefit from Business Correspondents and Business Facilitators (BC/BF) in the following areas:

• Identifying prospective clients.

•Prompting/guiding town individuals about suitable Bank items and administrations.

• Assisting villagers with the formalities required to conduct business with banks.

• Providing customers with information about the terms of sanctions, repayment, and recovery.

• Facilitating rural residents' basic and low-value transactions or putting them through them.

Origin of this Model - The BC Model started in the 1990s as a way to control inflation and improve social programs in Brazil after 20 years of high inflation. In the past, all bills were paid in bank branches, which was difficult to access in the North and Northeast. Additionally, the government provided families with incentives to keep their children enrolled in school; However, due to the Banks' lack of accessibility, the benefits were nearly impossible to distribute. The extensive lottery network's ability to conduct transactions served as the foundation for the model. After that, regulations were altered to permit any non-financial institutions to function as agents.