Business correspondent Model:

The role of Business Correspondents (BCs) is considered as important for increasing the extent of financial inclusion in rural areas. They offer cost –effective alternative to traditional brick-mortar branch approach. However their effectiveness is limited by the following concerns:

♤ Low aspirational value of BC as a profession: The lack of permanency and growth opportunities are important reasons for the low value attached to the profession.

♤ Preference for a brick and mortar branch: Large segment of the population was not comfortable with salesman like BC and preferred a brick and mortar branch for banking

♤ BCs are not making enough income due to catering of services to low-income customers with low volume transactions.

More and more innovative products will have to be introduced which would benefit both banks as well as the rural people and at the same time make the BC model more viable.