BUSINESS CORRESPONDENT  (BC) ARRANGEMENT

State Bank of India which has the largest branch network in the country invites eligible individuals/ NGOs/Companies (other than NBFCs)/ other entities to join hands with us to take banking to all. Some of the important features of our BC Model are given below.

1. Entities eligible to be appointed as BC

  • NGOs/ MFIs set up under Indian Societies/ Trust Acts.(Care: excluding NBFC)

  • Societies registered under mutually aided co-op. societies (MACs) Act or the Coop. Acts of States.

  • Section 25 companies.

  • Post Offices.

  • Retired Bank employees

  • Ex-Service men.

  • Retired Govt. Employees.

  • Individual kirana/ medical/fair price shop owners.

  • Individual Public Call Office (PCO) operators.

  • Agents of small savings schemes of Government of India/ Insurance Companies.

  • Individual who own petrol pumps.

  • Retired teachers.

  • Authorized functionaries of well run Self Help Groups (SHGs) linked to banks.

  • Individual member of Farmers Clubs.

  • Individual operators of Rural Multipurpose kiosks/ Village Knowledge Centres

  • Individuals/ proprietors/ owners who manage Agri Clinics/ Agri Business Centres.

  • Retired Post Masters.

  • Individuals such as auto dealers, tractor dealers and FMCG stockists.

  • Insurance agents including of private insurance companies (IRDA certified) and postal agents.

  • Individuals operating Common Services Centres (CSCs) established by Service Centre Agencies (SCAs) under the National e-Governance Plan (NeGP).

  • For profit companies

  • Any other individual considered suitable by the selection committee.

2. Nature of Services to be rendered by the BC and its outlets:

  • The BC arrangement essentially means enrolling customers and enabling the transactions of the customers at the Customer Service Points (CSPs) besides sourcing various deposit and loan products for the Bank as a Business Facilitator. The outlets of the BCs will need to undertake BC activity through any one of the different technologies adopted by the Bank. These can be Card Technology, Kiosk Banking Technology and the Cell phone messaging Technology.

  • As far as the Card Technology is concerned, we have two different vendors and if the BC entity would like to undertake BC activity, it can choose either of these technologies, where the processes, the front end hand held devices, and the commercials are slightly different from each other.

  • Here either a Smart Card, i.e., a card with a Chip, (which is a contact or a contact less card) or a Chip-less or just a plastic card may be used for transacting. These cards work with biometric identification. The transactions can be either online or offline also.

  • In this card technology, the BCs can enroll customers and open No-Frills Account in the form of SBI Tiny Savings Bank and SBI Tiny Recurring Deposit Accounts, undertake deposit and withdrawal transactions (in cash) in these two accounts through the technology provided by the Bank/Technology vendors concerned, for the customers thus enrolled. The Savings Bank account can also be opened as a Savings Bank cum Overdraft Account. After six months of operation of the account as a Savings Bank account the customer would be eligible for an overdraft also.

  • In Kiosk banking, using a Finger Print capturing device supplied by the Bank and using the internet connectivity, a BC can enroll customers and open No Frills Savings Bank Account. Other products are likely to be added soon. The transactions are always online in Kiosk Banking.

  • In both the Card Technology and Kiosk Banking Technology, remittances from one account to any other account in the Bank are permitted.

  • In the Cell phone messaging technology anyone with a mobile phone can open the No Frills Accounts. This is not biometric enabled and has different security features. However, this technology is not right-away available for BCs and may be available after some time.

  • Further, we consider every BC as BF plus, (BF = Business Facilitator); that is every BC is expected to source business outside the technology enabled No Frills Account. It is also seen from our various pilots that to make the BC activity viable, BF activity also needs to be undertaken by the outlets of the BC. For this a few simple banking products will be initially selected and training on the features of the products and Know Your Customer (KYC) guidelines of the Reserve Bank of India (RBI) will be given by the Bank.

  • For such BF activity, the outlet operators would need to identify customers, motivate and market the banks liability and asset products to such customers. Also help the customer in filling the loan application/account opening forms, obtain photographs, documents for complying with the KYC guidelines of the RBI, documents and papers for sanction of the loans and direct the customers to the link branches concerned with all papers.

  • Cash will be accepted/ paid only through technology in the No Frills Accounts and for all other accounts i.e., only the CSP of the BC can accept cash / make cash payments. The BF is not permitted to handle cash. Customers sourced by the BF will transact at the concerned Branch only.

  • The BC will also need to participate in the Financial Literacy/ Awareness efforts of the Bank.

3. Exclusivity : An outlet of a BC - called a Customer Service Point (CSP) by us should not do any business for any other bank/financial institution. We would like to have exclusivity in this regard.

4. Security Deposit: In terms of our Banks Policy, the BC would be required to keep security deposit equivalent to a fixed percentage of the expected business volumes of a year.

5. BC Agreement: A copy of our standard BC agreement will be forwarded to you separately for your information and reference.

6. Location of the Pilots: Once the BC arrangement is finalized, a pilot could commence in selected districts/States. Based on a review of the performance this can expand by mutual consultation. We would also be visiting a few of the proposed outlets before launching the arrangement.

7. Once the CSPs are identified, the BC is required to forward to us the list of CSPs on a standard format to enable us to send it our Circle concerned for verification and mapping of our link branches. As you are aware, every CSP outlet has to be linked to a Branch which is at a distance of less than 30 km in Rural/ Semi urban centres. Once the CSPs are mapped and codes allotted, the BC can commence activities.

8. The BC will have the option of choosing one of the technologies being offered by the Bank. The BC is required to invest in the hardware/necessary equipment required for undertaking BC activities. Presently, the Bank has Hand Held Point of Service, Cell Phone messaging based and Internet based SBI Kiosk technologies. A coordination document in respect of the technology vendors will also be shared with the BCs, wherein the roles and responsibilities of the BC, Technology vendor and the Bank would be delineated.

9. Cash Management: For the BC transactions the BC would be required to open a Current Account called the Settlement Account and keep it pre-funded. In terms of the technology we are using, whenever a customer comes and deposits cash into his account at the BC outlets, the customers account will be credited and the BCs Settlement account will be debited. Similarly whenever a customer withdraws money from the outlets, his account will be debited and the BCs Settlement will be credited. Therefore, in respect of BC operations undertaken by the BC the Cash Management, i.e. maintaining sufficient pre-funded balance in the Settlement account, and sufficient cash at the outlets and movement of the funds between the outlets and the Settlement Account are required to be taken care of. Plus, the cash at the outlet being the BCs cash, the risk and costs associated with this also will have to be borne by the BC.

12. Selection of agents/sub-agents, Due Diligence: Selection of agents/sub-agents will be done in terms of guidelines issued by RBI from time to time.

13. Banners and Stationery: Bank will supply with suitable banners/sign boards as well as the stationery required for BC operations.

14. Commission Payable to BC: The rates of commission payable to the BC will be advised after the completion of selection process.

15. The BC will need to draw up a Business Continuity Plan to ensure that the customers enrolled are served without any disruption.

16. The BC/ BF outlet would be subject to Inspection & Audit by Bank official/ RBI/ Other Statutory Auditor.


We would request you to revert to us in case you need any more information or clarification on the above points or on any other areas concerning BC/BF arrangement. You may please feel free to call the Dy. General Manager (Rural Business- Alliances)


SBI Corporate Centre, Mumbai at

022-2274-2860 or 022-2274-0991/0992/0999.