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Major Differences Between The Business Correspondents and Business Facilitators

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Indian government with an objective to ensure that the financial inclusion and increase outreach of the banking sector has launched the program. This program is based on the recommendations of Khan Commission, the Reserve Bank of India to set specific guidelines that allow banks to employ two types of intermediaries – Business Correspondents and Business Facilitators. This is an effort to help such banks to expand their businesses. As per this guideline, the commercial banks include Local Area banks and Regional Rural Banks. This is an effort to promote the banking and financial services across the country and even to the remote areas.

When considering the role of BCs, they carry transactions on behalf of banks as agents. With this, the BFs can easily refer the clients, pursue the client’s proposal and facilitate the banks to carry the needed transactions. However, they are not authorised to carry the transactions on behalf of the bank. As per the recent update, RBI has permitted all the BCs to perform business for other banks too who are dedicated to working only for a specific bank. As per the report, over 2,48,00 BC agents are deployed by banks who are providing their service over the 3,33,00 BC outlets. The report also specifies that nearly 117 million saving bank accounts are opened through the BCs.

Roles and responsibilities of Business Correspondent (BCs)

  • Facilitate transaction facilities and enrol customers for biometric and other details like Debit Card, Credit Card, ID card, etc
  • Helps in depositing money in the bank account with any bank and withdrawal of money from an account from any bank
  • Helps in remittances from one bank to an account with the same or other banks
  • Provide balance enquiry, get receipts and statements of accounts

Roles and responsibilities of the Business facilitator (BFs)

  • BFs facilitate identification of borrowers and their fitment of different activities
  • Helps in creating awareness about various savings and related products along with educating people on managing money and debt counselling
  • Helps in the collection and preliminary processing of different loan applications along with verifying the primary information
  • Helps in processing and submitting the applications to the banks
  • Handles post-sanction monitoring
  • Promote and nurture self-help groups along with joint liabilities groups
  • Make necessary follow-up for recovery

In general, both business correspondent and facilitator are representatives of a bank and are responsible for building awareness and sourcing prospective customers. With this, they both operate in the industry to promote and ease the financial transactions. Their effort is to outreach the bank services even to the rural and remote areas of India and help people to avail bank facilities. They organise educational programs and help people to opt the bank facilities and handle transactions easily. This program is helping over 40% of the Indian population and is specifically targeted the population who did not have access to banks and their facilities.

Both business correspondent and business facilitator hold their responsibilities and roles to play that are closely interconnected with each other. They help to deliver the financial services at an affordable cost to the low income and disadvantaged group. We know that banks have a number of channels through which it is capable to deliver the needed financial services all over the country. Banks branches, internet banking and ATM’s are among the traditional cannels.

However, when it comes for the extended service to people who are less prone to banks and posses no or little knowledge of banking and products. They need support from professionals. Here the role of Business Correspondents and Business Facilitators comes into play.

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