RBI calls for strengthening of business correspondent model

MUMBAI: Reserve Bank of India has called for the strengthening of the business correspondent model to improve quality delivery of financial services in remote areas and arrest fraud. It is planning a certification programme to equip them to handle financial products beyond remittances and deposits and contribute to financial inclusion.

“The Reserve Bank will issue the necessary framework for establishing a certification programme for BCs by end of June 2016 in association with the Indian Bank’s Association (IBA) and external training institutes,” said RBI governor Raghuram Rajan.

He said a central repository of data about BCs would also be created. “The move is expected to control fraudulent transactions on the BC network and bring discipline and finally it should develop into a white label model for BCs,” said Paresh Rajde, managing director of corporate BC network Suvidhaa Infoserve.

Speaking about peer-to-peer lending showing accelerated growth, Rajan sounded a note of caution about the risks such institutions posed to the system. “A concept note on P2P lending will be put up on the RBI website for public comments by April 30 for regulating this sector,” he said.

Naveen Surya, chairman of the Payments Council of India, said PPI licence holders were looking for RBI’s directions on increasing the number of POS terminals, further push for merchant acquisition, interoperability, cash out at BC outlets and even perhaps direct benefit transfer through PPI licence holders.