Why do you think there is an urgent need to revise the remuneration of business correspondents (BCs)?
There is a structural mismatch between the expanding responsibilities of BCs and the static nature of their compensation. BC remuneration has not been revised in line with inflation or rising operational costs, while banks have progressively introduced multiple penalty frameworks covering compliance deviations, service outages, transaction errors, and audit observations. Simultaneously, BCs are required to comply with enhanced know-your-customer and anti-money laundering norms, certification requirements, cybersecurity protocols, audit mechanisms, and obligations under the Digital Personal Data Protection (DPDP) Act, 2023. These developments have materially increased the cost and risk of last-mile service delivery. From a systemic risk perspective, prolonged economic stress at the BC level may lead to agent attrition, weakened controls, higher fraud exposure, and service discontinuity. Revising remuneration in alignment with current regulatory and operational realities is therefore necessary to ensure sustainability, compliance, and stability of the BC ecosystem.
If BC remuneration is to reflect commercial realities, it is argued this will affect financial inclusion. What are your views on this aspect?
Aligning BC remuneration with commercial realities is expected to strengthen, rather than adversely impact financial inclusion. Financial inclusion depends on reliable, continuous, and trusted service delivery at the last mile. When BC operations are economically unviable, agents tend to exit remote locations, reduce service hours, or selectively serve higher-value transactions, thereby excluding vulnerable populations. Sustainable remuneration enables BCs to invest in infrastructure, trained manpower, data security compliance, and customer awareness, all of which improve service quality and trust. The BC model also supports the government’s vision of empowering rural youth and increasing women’s participation in the formal financial ecosystem. Providing viable earnings, including structured onboarding or initial stabilisation incentives will attract educated youth and women into the BC channel and ensure long-term inclusion outcomes. Inclusion without economic sustainability is fragile; inclusion supported by viable BC operations is resilient and scalable.
The BC channel is largely used for cash-in-cash-out (CICO) transactions. Can more products and services be pushed through it?
Yes, the BC channel has significant potential beyond CICO. With appropriate safeguards, training, and incentive alignment, BCs can support delivery of social security schemes, pension and insurance facilitation, small-ticket credit sourcing, remittances, bill payments, and assisted digital banking services. Over-reliance on CICO increases cash-handling risk and revenue concentration, while service diversification improves unit economics and reduces systemic risk. A BC’s physical presence and local trust position it as an effective conduit for assisted financial services, particularly for first-time and digitally excluded customers. Expanding the product mix, supported by risk-based controls and compliance-linked remuneration, would strengthen the BC channel as a comprehensive last-mile financial access point.
What is driving the demand for an Infrastructure Grant Fund (IGF) and Business Correspondent Equity Fund (BCEF)?
The BC ecosystem requires structured capacity-building support beyond transaction-based commissions. BCs must invest in secure devices, biometric maintenance, reliable connectivity, cybersecurity tools, DPDP Act, 2023 compliance systems, training, and audit readiness. These infrastructure requirements are essential for regulatory compliance and risk mitigation but impose a significant financial burden at the last mile. An IGF will enable standardisation, regulatory readiness and secure service delivery across geographies. The BCEF would provide access to long-term capital, enabling credible BC entities to invest in professional management, technology, and institutional capacity.
 "Dharanidhar Tripathy, chief executive officer of the Business Correspondent Resource Council")