Need to overhaul business correspondent model of financial inclusion: Canara Bank CMD

Canara Bank CMD RK Dubey presses need for more accountability in the business correspondent model

trithesh

Trithesh Nandan | November 14, 2013



The business correspondent (BC) model has been long considered the favourite choice of policymakers in connecting the last mile into financial inclusion, but it faces a huge trust deficit – so much so that even top bankers have been raising the accountability of government’s favourite ‘financial inclusion’ model.

“The BC model is not working the way it should have been working,” chairman and managing director (CMD) of Canara Bank RK Dubey told Governance Now on the sidelines of a seminar on financial inclusion, organised by the Confederation of Indian Industry (CII) in New Delhi on Wednesday.

According to Dubey, facilitators of such model are actually not bankers, so they are not devoted to actual implementation of financial inclusion.

Dubey pressed for more accountability in the BC model than was permitted by the Reserve Bank of India in 2006 to utilise services of intermediaries in providing banking services. In the BC model of operation, the facilitators involved in ‘cash in-cash out’ transactions at rural places, connecting the last mile to the banking system.

“There is need for more accountability of the BC model,” said the CMD of Bangalore-headquartered bank.

According to Dubey, the BC model should be done by the banks themselves. “It should be done either by banks in full capacity or by a contractual employee of the bank who has a long-term commitment towards banking system. The half-baked system of providing banking facility in rural areas by a temporary staff has not served the purpose fully,” he said.

However, Dubey suggested that more low-cost bricks-and-mortar branches in rural areas with dedicated people should actually connect people from unbanked areas into the banking fold.

Dubey said Canara Bank is passionate about implementing financial inclusion scheme. Specifying that the bank is in the expansion mode, he said, “We have opened 500 branches in 2013 and by the end of March 2014, we plan to open 300 more branches.”

“We are looking at expansion and growth in the northeastern states. Besides, we will also open branches in Maoist-affected areas of Jharkhand,” Dubey said.

Stressing on the need to beef up financial inclusion in not only rural but in urban areas as well, Dubey said there is a huge problem of urban financial inclusion in even cities like Mumbai and Delhi.

Comments

 

Other News

“900 tenders worth Rs 150 crore?” For ward-level works: BMC

BrihanMumbai municipal corporation is floating nearly 900 tenders worth of Rs 150 crore in the next 10 days, but that is only for ward-level civic works, the BMC clarified on Monday, reacting to reports in a section of media.    “Since there are 25 wards in BMC, it involves m

Elections 2024: Banks, post offices to chip in for voter education

In a first-of-its-kind initiative, Election Commission of India (ECI) on Monday signed a memorandum of understanding (MoU) with two prominent organisations, the Indian Banks’ Association (IBA) and the Department of Posts (DoP), to amplify its voter outreach and awareness efforts ahead of the forthcom

Charming tales of the Snakeman’s early years

Snakes, Drugs and Rock ’N’ Roll: My Early Years By Romulus Whitaker with Janaki Lenin HarperCollins, 400 pages, Rs 699

Gripping graphic narrative helps make sense of pandemics past

The Moral Contagion By Julia Hauser and Sarnath Banerjee HarperCollins, 140 pages, Rs 699 The world has lar

“Globally, there is unprecedented positivity for India”

Addressing the Viksit Bharat Viksit Uttar Pradesh program in Lucknow on Monday, prime minister Narendra Modi launched 14,000 projects across the state, worth more than Rs 10 lakh crore at the fourth groundbreaking ceremony of UP Global Investors Summit held in February 2023. The projects relate to sectors

World’s biggest bird-a-thon begins in India

During the four days from Feb 16, more than a thousand birdwatchers throughout India are coming together with the goal of documenting as many birds as possible across the country’s diverse locations. Over one lakh birdwatchers globally participate in the annual Great Backyard Bird Coun

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter