Business Correspondent

Business Correspondent (BC) of State Bank of India (SBI):

RBI has stated that “We are trying to use BCs to take banking to the people’s doorsteps. The BC model is aimed at reducing the transaction costs of banking services as the cost of regular bank employees is very high, making it difficult to provide low cost banking services to the unbanked poor. However, banks do not seem willing to pay reasonably to these people from the unorganized sector. The poor BCs are paid so low that people accept this job only if they do not have any other option and at the very first opportunity, leave the BC’s work. The BC needs to be paid reasonably and also supported through appropriate ICT enabled infrastructure.”
SBI has appointed SMCS as their Business Correspondent (BC) for the state of Odisha for extension of Bank’s following services:
Deposit Accounts, Mutual Fund Sourcing, Home Loans, Auto Loans, Loan against TDR/NSC/KVP, Gold Loan, SME Loans, Kishan Credit Card (KCC), General Credit Card (GCC)

The following advantages are expected to accrue to us out of BC activity of SBI:
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1. Opening of accounts and other banking transactions through us will not be confined to normal banking hour
2. SMCS will help achieving government and SBI target of achieving Financial Inclusion plan
3. Mobilisation of SHGs for our finance will be easier.
4. SMCS will get some remuneration as a BC

Your MFI deposited Rs.10 Lakhs as security deposit with SBI for the purpose and is authorized to open 1000 KIOSKs. We have opened 13 kiosks in our branch locations. Such kiosks have opened 4766 Savings Bank accounts in 2012-13. Besides SB accounts of individuals our kiosks are also opening Recurring Deposit and Fixed Deposit accounts who have opened SB accounts with them. SBI has recently permitted opening SB accounts of SHGs by Kiosks/CSPs where the operating office bearers of SHGs, viz, President and Secretary/treasurer have already opened their individual accounts. During the year all our kiosks made cash payments of Rs 49 lakhs and cash receipts of Rs21 lakhs. SMCS earned a commission of Rs 2.28 lakhs net of taxes on account of its kiosk operations during the period. We have applied for two more kiosks for our branches.

SBI in the month of March 2013 allotted us 81 Financial Inclusion (FI) villages for opening of Customer Service Points (CSPs) by 31.03.2013. Of these FI villages 56 are with population of 1600-2000 (Phase-II) and 25 villages with population of 2000 and above (Phase-I) and having no bank branch. We finalized all CSPs in Phase-II and 6 of Phase-I (SBI verbally asked us to go slow for Phse-I villages) during the period and have been allotted CSP Codes by SBI. All the said villages are in Khurda, Cuttack, Puri and Bhadrak districts. Four of the CSPs will be operated through our existing branches and the rest on commission basis.