FinMin considers asking banks to implement geotagging for all BCs

The Union Ministry of Finance (FinMin) is planning to direct banks to implement geotagging for all Business Correspondents (BCs) in order to enhance accountability and facilitate better monitoring of their activities. This is also expected to ensure that services are delivered effectively and efficiently to the intended beneficiaries, according to a senior government official, who requested anonymity. 

A BC is a bank representative who provides banking services to customers in areas without bank branches. 

“The government is planning geotagging of BCs. It will help banks to provide valuable data on customer behaviour for informed decision-making, aid in fraud prevention by monitoring transaction patterns, and ensure compliance with regulatory requirements,” said the official. 

The official further added that geotagging enables performance-tracking of BCs, supports community development through targeted initiatives, and facilitates effective marketing campaigns based on regional demographics. Ultimately, it empowers banks to reach more customers, improve satisfaction, and contribute positively to local economies. 

 

“By implementing geotagging, banks can enhance transparency, monitor agent activities in real-time, and ensure effective service delivery in remote areas. This initiative will bridge the urban-rural divide, enabling targeted financial inclusion and optimizing resource allocation. Moreover, it will fortify fraud detection and compliance measures, safeguarding customer trust. In banking, precision builds trust, and innovation fuels inclusion. Geotagging will empower banks to achieve both, driving sustainable growth, and deeper financial penetration across India,” said Utpal Chakraborty, gartner ambassador (AI), founder & CTO, IndiqAI. 

The finance ministry may also direct banks to upgrade the remaining devices to meet Unique Identification Authority of India (UIDAI)-prescribed standards that are vital to enhancing operational efficiency and ensuring compliance with regulatory requirements. 

The source also said that to address the irregularities among BCs, the finance ministry may direct banks to prioritise sanitisation of data on the Jan Dhan Darshak (JDD) App, which is crucial for maintaining integrity and security of user information. 

Availability of banking outlets is monitored by a Geographic Information System (GIS)-based JDD App. 

The official noted that the targets allocated to BCs by certain banks often appear unrealistic, which can negatively impact their performance and morale. Therefore, it is essential to re-evaluate these targets, ensuring they are based on potential, and consider local contexts and market conditions. 

The source emphasised the need to rationalise the caution money required from BCs, linking it more directly to the number of agents deployed. This approach would alleviate financial burdens and encourage greater participation in the programme. 

The senior official also said that the Department of Financial Services has given tasks to banks to ensure that all villages with a population of 3,000 have bank branches, while the remaining villages would be served by the Department of Post through the India Post Payments Bank. A total of 521 branches were allocated to banks, with State Level Bankers’ Committees committing to open all by July 2023. So far, 442 branches have been opened, leaving 79 still to be established. Of these, 61 branches are expected to be opened by Public Sector Banks (PSBs). The deployment of BCs to cover all inhabited villages within a 5 km radius is pending for 552 locations, with 348 of these belonging to PSBs.