Discussion Papers on India's Business Correspondent Model and the Operational Challenges Faced by BCs in the Field

This compendium of discussion papers documents the experiences of business correspondent (BC) practitioners working in the field in order to share their experiences and brainstorm solutions to the challenges that are within the purview of the existing regulatory norms. It also highlights the macro issues that require policy amendments from the regulators and banks.The first discussion paper focuses on operational challenges and potential solutions for the BC business model in India. It examines what banks, BCs, and technology service providers can act on within the existing regulations to make significant improvements to the model. These challenges include:

• Building the branchless banking "rails", the infrastructure and network by which to provide a channel and extend reach to the last mile, is a difficult, time and investment heavy endeavor;
• Developing the right pricing strategy determines the level of customer uptake, how they use financial services, and whether a business model will work or not;
• Despite the drive for financial inclusion and the mandate by RBI for banks to move into rural areas, customers are not taking up the service with the expected speed.

The second paper identifies potential solutions to challenges involving other stakeholders. It aims to promote cross learning and initiate a wider discussion on some of the pressing problems of BCs.