Biz correspondents' body to raise Atal Yojana renewal commission with banks

BCRC may take up the issue with the Indian Banks' Association; in January, it had raised the matter with the insurance regulator

The Business Correspondent Resource Council (BCRC) is likely to raise the issue of non-payment of Atal Pension Yojana (APY) renewal commission by banks to business correspondents (BC), and is to seek a meeting with the Indian Banks' Association (IBA) to resolve the matter.

 

BCRC had voiced its concern with the Pension Fund Regulatory and Development Authority (PFRDA), which advised it to reach out to banks directly for resolution. PFRDA said it releases APY incentives solely to APY Service Providers (APY-SPs). “These APY-SPs, in turn, are responsible for distributing the incentives to their BCs, if applicable, based on their internal arrangements, agreements, and terms and conditions,” the regulator said in its communication to BCRC.

 

In January this year, BCRC had taken up the matter of renewal commissions not being credited on social security schemes - Pradhan Mantri Suraksha Bima Yojana; and Pradhan Mantri Jeevan Jyoti Bima Yojana – to BCs with the Insurance Regulatory and Development Authority of India (Irdai). 

 

It was pointed out that BCs are the frontline workers driving penetration of the government's flagship schemes, and the absence of renewal commission is demoralising. This may result in reduced participation and outreach effectiveness in the long run given that BCs invest significant time and resources in out-calling, personalised follow-ups, and re-educating customers on financial literacy.

 

As of April 2025, APY has accumulated over 7.65 crore subscribers, mobilised a total corpus of Rs 45,974.67 crore, and recorded increasing participation from women, who now comprise about 48 per cent of all subscribers. APY is aimed at workers in the unorganised sector, who often lack formal pension coverage. It was initially available to all citizens between 18 and 40 years of age, but effective October 2022, individuals paying income tax are not eligible to join the scheme. It provides subscribers with a fixed monthly pension at the age of 60 years, based on their contributions. The different slabs are Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000, and Rs 5,000 per month.

 

Banks receive a minimum of Rs 100 for each APY application, with incentives provided for promotional efforts and for new accounts opened during the year. The amount varies based on the number of APY subscribers with each bank. 

 

Of late, BCRC has voiced its worries on the viability of the BC channel with the Ministry of Finance. In November last year, this issue was flagged in a meeting with the Minister of State for Finance Pankaj Chaudhary. During the talks, the BCRC revisited the problems highlighted by the working group set up under the chairmanship of C S Setty in December 2022. Setty, who is currently chairman of State Bank of India, was the bank’s managing director at the time.

 

It may be recalled that the first steps for rolling out the digital audit of the over 2.5 million BCs along with their training and certification was decided at a meeting held at the Department of Financial Services (DFS) with the monitoring committee on the functioning of BCs. A working committee is to be formed headed by one of the managing directors of the SBI with members drawn from Yes Bank as well as the Business Correspondents' Federation of India. 

 

Other issues which figured at this DFS meeting were the penalties imposed on BCs by banks, as well as the amounts charged by banks as security deposits, which range between Rs 50 lakh and Rs 1.8 crore for 1,000 kiosk points. It was indicated that the establishment of an infrastructure and equity fund for corporate BCs, with the option to tap the National Bank for Agriculture and Rural Development (Nabard), and the RBI Payments Infrastructure Development Fund, may be taken up at a later date.

• BC remuneration has become a cause for heartburn
• PFRDA advised BCRC to take up APY renewal commission concerns directly with banks for resolution
• In January this year, BCRC had taken up the matter of renewal commissions not being credited on the Pradhan Mantri Suraksha Bima Yojana, and Pradhan Mantri Jeevan Jyoti Bima Yojana to BCs with the Insurance Regulatory and Development Authority of India