Articles by Falaknaaz Syed

Business

Budget Expectations: BCRC Suggests Inflation Linked Remuneration

Mumbai: The Business Correspondent Resource Council (BCRC) has suggested a slew of critical measures that could be announced in the upcoming budget to support Bank Mitras and Corporate Business Correspondents (CBCs) in India.In a letter to the secretary Department of Financial Services (DFS) M Nagaraju, the BCRC CEO D Tripathy has suggested revising remuneration, bringing in guidelines to delineate role of banks, corporate Bank mitras and Bank Mitras in case of fraud like mule accounts so that genuine workers are not penalized. “Nearly 33 per cent of Bank Mitras earn less than ₹5,000 a month, while investment of about ₹1 lakh is needed (for laptop, biometric scanner, micro-ATM, rent and electricity) to set up a Customer Service Point. Such low returns make it difficult for the youth to see it as a career option.” The Council has asked the government to setup a committee to align the Bank Mitra’s remuneration with inflation, and the operational risk of providing banking in cash-intensive areas. The committee may comprise the Department of Financial Services, banks and financial institutions, NPCI and industry bodies.The BCRC has also suggested offsetting infrastructure costs incurred by Bank Mitras through the RBI’s Payments Infrastructure Development Fund, PIDF or setting up an Infrastructure Grant Fund to help ensure access to laptops, passbook printers and biometric devises for seamless service delivery. Other suggestions are to create a India Business Correspondent Equity Fund’ as a partnership between the central government and Development Finance Institutions, for providing equity to the Bank Mitra ecosystem.Under the PM Jan Dhan Yojana, over 56 crore bank accounts have been opened since its launch, facilitated by over 13 lakh Bank Mitras who deliver branchless banking in semi-urban and rural areas. The Jan Dhan accounts have over Rs 2.7 lakh crore in account balance now (Bank Mitras are credited with mobilizing over Rs 1.5 lakh crore, at Net Interest Margin of 3 per cent, it translates to over Rs 4,000 crore in bank profits).The BCRC was set up in 2014 to offer support to Bank Mitras through training, research and collaborations. Its members are primarily ‘corporate Business Correspondents’, who are working with nearly five lakh Bank Mitras attached with nearly 50 banks (private/public-sector/regional rural), mutual funds and insurance firms.