Boots on the ground need mending

The business correspondent channel for financial inclusion is calling for a pay raise, investments and an end to penalties, reports RAGHU MOHAN

Almost two decades after business correspondents (BCs) arrived on the scene, the lack of grease is evident. Poor payout for the heavy lifting they do is making the channel -- a key cog in the financial inclusion wheel -- creaky. For there has been no upward revision in the pricing of BC services for years: Be it on cash withdrawals, cash deposits, money transfers, or Aadhaar-Enabled Payment System (AePS) transactions. And what nobody will go on record is that BCs and banks are ranged against each other. An interesting matter of detail is that these issues are coming to head just as the Pradhan Mantri Jan-Dhan Yojana (PMJDY) turns 10: It has been an eventful period, having helped on-board and serve more than 500 million PMJDY customers at a fraction of costs that banks would have otherwise have incurred.

Financial inclusion, please

The BC channel was imagined as a low-cost route to bolster financial inclusion: Boots on the ground for last-mile connectivity. But as Anil Kumar Gupta, partner - payments and distribution at MicroSave Consulting, puts it, "financial inclusion ought to make commercial sense for service providers to ensure long-term sustainability. Since the BC channel is a cost-effective extension to supplement brick-and-mortar bank outlets, it was never imagined to be non-commercial." It's an indirect way of saying that this is not what's on view: BCs are being milked.