Govt, payment banks in talks to enable common services centers to act as business correspondents
Move, an integral part of ‘Digital India’ initiative of the government to foster financial inclusion, comes when traditional banks have not shown much interest in scheme
New Delhi: With an aim to create an access point of financial services across the country, the information technology ministry is in talks with payment banks to enable common services centers (CSCs) to act as business correspondents (BCs).
This move comes at a time when traditional banks have not shown much interest in using CSCs as business correspondents.
CSCs are largely access points which have basic computing infrastructure run and operated by the local entrepreneur who lives within same community. It is an integral part of ‘Digital India’ initiative of the government to foster financial inclusion in the country.
“We are signing agreements with Airtel Payments Bank, Reliance Jio Payments Bank and Paytm Payments Bank to make our CSCs their BCs. Payments banks are providing an alternative to traditional banks as it involves lower risk and accepts deposits up to a certain amount,” said Dinesh Tyagi, chief executive officer, CSC e-Governance services in the ministry of electronics and information technology, in an interview with Mint.
Business Correspondent (BC) is an approved bank agent providing basic banking service using a micro ATM.
Till date, The IT Ministry has signed agreements with 42 traditional banks (both public and private) and around 12,000 CSCs are already acting as BCs.
“Our objective is to ensure that every CSC becomes a BC and all 240,000 centres should be doing some banking services by March 2018. However, most of the traditional banks are not actively supporting us, citing their own set of reasons.”
“The operations of customer and merchant acquisition have already started for Airtel Payments Bank all over the country. The services of Reliance Jio Payments Bank and Paytm Payments Bank will commence very soon,” added Tyagi.
Airtel Payments Bank became the first payment bank to start operations in November by launching pilot programme in Rajasthan.
Paytm Payments Bank and Reliance Jio Payments Bank are expected to commence their operations soon.
Payments banks accept deposits up to Rs.1lakh and offer payment services but do not offer loans, unlike commercial banks.
“The CSCs will not charge anything extra for rendering of services, they will comply with the rules of the payments bank and are entitled to get commission from them,” said Tyagi.
Dewang Neralla, chief executive officer, Atom Technologies Ltd, a payment service provider, said the idea to make CSCs as BCs for payments banks will ensure level playing field for both payments banks and traditional banks.
Emails sent on 17 February to Reliance Jio Payments Bank remained unanswered.
Airtel Payments Bank and Paytm Payments Bank declined to comment.