With ‘Financial Inclusion’ being the flavor of the season, the Reserve Bank of India has now allowed banks to appoint Common Service Centers (CSCs) as ‘Banking Correspondents’. Common Service Centers are broadband enabled service centers set up by the Indian government in a public-private-partnership model. These centers will provide villages with services such as Internet, e-Learning, electronic bill payments, insurance premium collection, e-commerce, distance education etc. As of 31st March 2010, there were 76,100 CSCs in India, up from 58,954 at the end of December 2009 (according to India’s Economic Survey). [notification]
Interestingly enough, this inclusion of CSC’s as a part of the regulation governing banking correspondents comes a little over a month of the State Bank of India tied up with SREI Sahaj for Rural eBanking. So it appears that SBI’s tie-up pre-empted the regulation change.
In December, the RBI had allowed the following entities to be appointed banking correspondents:
— Individual kirana/medical/fair price shop owners
— Individual Public Call Office(PCO) operators
— Agents of Small Savings Schemes of Government of India/Insurance Companies
— Individuals who own Petrol Pumps
— Retired teachers and
— Authorised functionaries of well run Self Help Groups(SHGs) linked to banks
Tellingly, Telecom Operators are still not being allowed to operate as banking correspondents.
Do read our earlier story on issues with e-governance projects.
— State Bank Of India & SREI Sahaj Tie-Up For Rural eBanking
— RBI Allows PCOs, Grocery Shops To Offer Banking Services, But Not Telcos
— Nokia’s Recommendations For Growing Mobile Payments Business In India