What is The Full Form of BC in Banking?
Thе Full Form of BC in Banking is Business Correspondent. In order to ensure greater financial inclusion and broaden the banking sector’s reach, banks are permitted to use SHGs/NGOs, Civil Society Organisations (CSOs), and Micro Finance Institutions (MFIs) as intermediaries for the purpose of financial and banking services through the business correspondent model. A business correspondent, an outpost of the bank branch, provides banking and financial services to clients in underbanked and unbanked areas.
What Do Business Correspondents Do?
Bank representatives serve as business correspondents. They assist people living in remote areas with the opening of bank accounts. Business correspondents receive commissions from banks for each new account they create, transactions they handle, loan applications they complete, and so on. The rate of the commission is reviewed periodically. BC has the right to impose any fees on its customers. However, banks have a duty to charge customers with affordable service fees in a transparent manner.
Benefits of the Business Correspondence Model
A BC model assists banks in reaching the weaker or vulnerable section of society, which is inaccessible to traditional banks as such. In comparison to traditional banks, BC can offer a wider spectrum of financial services to those people who cannot access conventional banks owing to a lack of awareness, poor digital knowledge, and trust issues. A BC helps to disburse loans, collect small deposits and provide other banking services to people living in remote areas. This helps banks to facilitate banking services in these areas at a very low cost.
