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Now, open a bank account in a grocery shop
Published on 2 Dec. 2009 12:00 AM IST
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Very soon, the kirana shop and the PCO in your neighbourhood, your insurance agent, a retired teacher and the nearby petrol pump, could provide you with a slew of banking services like deposits and withdrawals, opening of accounts etc from their premises. On Monday, RBI permitted banks to appoint these entities to act as their agents and carry out several of the bank’s operations. All these though, will come for a fee, pre-decided by your bank. According to Times report, RBI has allowed entities like individual kirana/medical/fair price shop owners, PCO operators, agents of government-sponsored small savings schemes, insurance agents, petrol pumps owners and retired teachers to act as ‘business correspondents’ (BCs) of banks. A notification by the RBI said that allowing banks to appoint BCs (agents in common parlance) was part of its financial inclusion initiative. In August, an RBI working group was of the view that since the traditional ‘brick and mortar’ banking model had limitations penetrating remote areas of India, the BC model could give banks a workable solution to provide banking services in inaccessible areas in a cost-effective manner. While appointing BCs, the RBI has looked at two aspects. One, BCs should have experience in handling cash inflow and outflow as part of their normal activities, so that the issues relating to cash handling are addressed. ‘‘For streamlining cash management, banks may consider adopting ‘cash routes’ linking various BCs which are in close proximity to each other to a base branch, wherever warranted with suitable cash transit insurance,’’ it said. Secondly, to give the BC model a local touch, it said ‘‘banks may ensure that while appointing the above entities as BCs, the principle that the individuals are residents of the area in which they propose to operate as BCs, stands fulfilled.’’ On issues of charges, RBI said it is the bank which will charge the customer in a transparent manner. BCs will not be allowed to charge customers directly.

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