Hyderabad: The business correspondents (BCs) industry, which has been in the forefront offering banking services to the under banked particularly in times of the lockdown, has drawn up plans to up its presence. The banking correspondent companies feel their role is going to be vital in days to come in view of large number of workers returning to native places.
Sashidhar Thumuluri, Managing Director and Chief Executive Officer of Sub-K Impact Solutions Limited, a Hyderabad-based company, said the company had about 2,100 people working.
“This number will reach 5,000 in three years and Telangana would account for at least ten per cent,” he said.
9,000 merchants in TS
It also has 5,000 active banking agents and another 5,000 of them that provide government payments. Thumuluri said the number of agents was likely to increase five-fold to touch 25,000 in three years across the country with a significant part of them in Telangana.
Another player, Fino Payments Bank, which has a network of over 15,500 bank mitras or BCs, too is on growth path. In Telangana, it has close to 2000 BCs. “As mandates from partner banks increase, we expect the pan India network to increase by 40 per cent this fiscal,” said Amit Jain, Chief – Business Operations, Fino Payments Bank. According to him, the business correspondent network is in addition to Fino Payments Bank’s own merchant network of around 2 lakh points nationally including close to 9,000 in Telangana.
At the industry level, Thumuluri, who is also the chairperson of industry body Banking Correspondents Federation of India (BCFI), believes that the number of agents will more than double to 2 million in the next three to five years from the current eight lakh agents across India.
They currently touch around 10-15 crore citizens every month and had catered to about 20 crore during the lockdown.
“BCs are here to stay. The convenience BCs offer cannot be compared with bank branches when it comes to transacting small amounts in remote areas. We can say that at least 50 per cent of the recent cash benefits went through BCs,” said Thumuluri. Data and digital channels will drive growth. Agents and BC channels will use fintech solutions to address financial needs of the poor, he said.
“Banks should be a bit more generous with agents. Insurance of cash and health/life are important. There have been cases where agents have been robbed or injured or even killed. Transaction failures do happen but the situation has been improving, the BCFI president said.
Multiple attempts by DBT beneficiaries to check balances are putting pressure on systems and leading to delay in transactions.
“We are witnessing higher number transactions but lower cash due to small ticket size of DBT withdrawals. Domestic remittance, which is dependent on migrant workers, will be impacted for some time,” said Jain adding the sector will be key as ATM network is shrinking.
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