State Bank to hire 15,000 Business Correspondents

Mumbai: In order to expand their presence in the rural areas, State Bank of India (SBI) plans to hire 15,000 Business Correspondents (BC), who will help the people in rural area to open a bank account. SBI's move is in tune with the Budget decision to provide banking facilities in all domiciles with more than 2,000 people.

"It is not possible for banks to open branches in every village, so Business Correspondents and Business Facilitator (BF) model would help in taking banking facilities to every part of the country," said O P Bhatt, Chairman of SBI. The BCs can act as a mini-bank branch with facilities of cash withdrawals and deposits up to Rs 10,000. The BC is connected to a local branch that supervises the functioning of all BCs in the area, the Chairman added.

SBI has covered more than 50,000 un-banked villages, including North Eastern, Eastern and Central parts of the country. Currently, the bank spends Rs. 115 on each account managed by the BC and the return may be around Rs. 3, as the average bank balance of a BC account is estimated to be around Rs. 30.
The bank has 35 lakh BC accounts and plans to open one crore such accounts by next fiscal. The total deposits from BC accounts have risen from Rs. 13 lakh to Rs. 6.29 crore in January 2010, in a matter of two years. In the next three years, the bank plans to mobilise Rs. 60 crore and make the whole BC/BF model profitable. The bank is also seeking assistance from Nabard.

The prime role of the BCs would be to accept deposits and remit money. They will also provide basic financial services like insurance to the low-income rural people who are outside the banking network. Apart from opening more branches, the bank will serve the customers better by leveraging other channels like ATMs, Internet banking and mobile