The Business Correspondent Resource Council (BCRC) has formally requested the Indian Banks' Association (IBA) to establish a standing committee to address critical issues within the business correspondent channel. According to reports from Business Standard, the committee would focus on BC remuneration, penalties, grievance redressal, customer service standards, scaling up the channel to cross-sell more services and products, technology upgradation, and the setting up of a depositor education fund under the RBI's draft framework. The BCRC's initiative comes after the Reserve Bank of India proposed draft norms on branch authorisation and BC usage, which classifies BCs into two categories: Business Correspondent-Banking Outlets (BC-BOs) and Business Correspondent-Banking Touchpoints (BC-BTs).
The business correspondent channel represents the world's largest boots-on-the-ground banking channel, with 2.5 million agents currently in operation. As reported by Business Standard, an all-India survey conducted by the central bank during January-March 2024 revealed significant issues within this ecosystem. The survey observed that a significant proportion of BCs were inactive, with their distribution skewed towards market centres or bank branches, compromising equitable access for remote areas. Insufficient and untimely remuneration was identified as the major reason for inactivity, service apathy, and unscrupulous practices among BCs. A senior BC industry official pointed out that despite repeated requests, an IBA Standing Committee has not been constituted with no prescribed timeline or composition.
The National Strategy for Financial Inclusion: 2025-30 (NFIS: 2025-2030) has set December 2026 as the target deadline for IBA action on strengthening BC remuneration structure. According to Business Standard, the NFIS emphasizes that fair and reasonable remuneration structure for BC agents is essential to ensure quality and consistency in last-mile financial service delivery. The BCRC has requested that the RBI use its influence to ensure the establishment of an IBA Standing Committee with adequate BC representation and a dedicated grievance redressal mechanism with a 30-day response timeline and recourse to the RBI ombudsman.
The industry has outlined comprehensive demands for the proposed IBA committee, as reported by Business Standard. These include conducting a cost-of-operations study before setting benchmarks, establishing a standardized customer satisfaction measurement framework with full transparency and dispute rights, and implementing designated Grievance Redressal Officers at each bank with 30-day response timelines and escalation to senior management with ultimate recourse to the RBI ombudsman or equivalent forum. On penalty issues, BCs are demanding that penalties should only be imposed if deficiencies are clearly defined through fair processes, with BCs given written notice and opportunity to respond. The committee should also address specific, proportionate, capped liabilities in bank-BC agreements based on proven crystallized loss rather than unlimited liability without proven loss.
