Lok Sabha Question No. 2544 (UNSTARRED), answered on 2025-03-17
Subject: Effectiveness of Banking Correspondents and Digital Banking Units
Ministry: FINANCE
Asked by: Shri Dulu Mahato, Smt. Himadri Singh

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES LOK SABHA UN-STARRED QUESTION No. 2544

ANSWERED ON MONDAY, MARCH 17, 2025 / PHALGUNA 26, 1946 (SAKA)

## Effectiveness of Banking Correspondents and Digital Banking Units

2544. SHRI DULU MAHATAO

SMT. HIMADRI SINGH:

Will the Minister of FINANCE be pleased to state:

(a) the specific measures being taken to include marginalised groups, particularly in rural and deprived areas under special drives for enrollment of individuals in financial schemes as banking correspondents;

(b)  the  steps  taken/being  taken  to  enhance  the  effectiveness  of  banking  correspondents  and  digital banking units to ensure wider reach and access to financial services;

- (c) the details of regions and States where enrollment rate is low; and

(d) the manner in which the Government plans to address the low enrollment rates in such specific areas or States particularly in Jharkhand?

## Answer

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (c) As per Reserve Bank of India (RBI) guidelines dated 01.07.2014, Scheduled Commercial Banks,  including  Regional  Rural  Banks  and  Local  Area  Banks,  have  been  permitted  to  provide financial and banking services through the use of Business Correspondents (BCs). Banks formulate the policy for engaging BCs with the approval of their Board of Directors. Accordingly, a strong network of about 13.99 lakh BCs, representing the last mile connect in the Banking Services delivery system is facilitating transactions in the rural and remote areas of the country.

Over the years, number of services which can be provided by BCs have increased up to 56. These include transaction services, PMJDY account opening, deposit mobilisation, loan leads, NPA recovery, Micro insurance, recurring deposit etc. and BCs get commission for each transaction performed by them. Also, the Indian Banks' Association (IBA) has, in consultation with Banks and Indian Institute of  Banking  &  Finance  (IIBF),  developed  suitable  training  modules  in  the  local  language(s)  for providing  proper  attitudinal  orientation  and  skills  to  the  BC  agents.  The  total  number  of  Business Correspondents (BCs) working as on 31.01.2025 pan-India is at Annexure-1 .

The Digital Banking Unit (DBU) facilitate digital modes/channels in a paperless, efficient, safe and secured environment thereby enhancing financial inclusion and making available financial products to the public in a seamless and efficient manner. As per Reserve Bank of India (RBI) guidelines, dated 07.04.2022  DBUs  perform  function  of  providing  digital  financial  services  as  well  as  customers' education  on  safe  digital  banking  practices,  customer  grievance  redressal  mechanism  etc.  As  on 31.01.2025, 107 DBUs have been set-up in 102 districts covering all the States and Union Territories across the country by 27 banks, including public, private sector, foreign and small finance banks.

(d)  Banks  formulate  the  policy  for  engaging  BCs  with  the  approval  of  their  Board  of  Directors. However, the functioning and various other aspects of BCs including renumeration, training, penalties, certification, deployment capacity building etc. are periodically monitored by the Government. Banks have  accordingly  been  advised  to  take  necessary  steps  to  address  all  the  issues  that  may  impact functioning of Business Correspondents (BCs). As on 31.01.2025, a total of 44,023 BCs are working in the State of Jharkhand.

*****

| State wise Business Correspondents (BCs) as on 31.01.2025   | State wise Business Correspondents (BCs) as on 31.01.2025   |
|-------------------------------------------------------------|-------------------------------------------------------------|
| State / Union Territory                                     | Number of BCs                                               |
| ANDAMAN &NICOBAR                                            | 27                                                          |
| ANDHRA PRADESH                                              | 39,562                                                      |
| ARUNACHAL PRADESH                                           | 1,311                                                       |
| ASSAM                                                       | 28,381                                                      |
| BIHAR                                                       | 218,165                                                     |
| CHANDIGARH                                                  | 242                                                         |
| CHHATTISGARH                                                | 50,811                                                      |
| DADRA, NAGAR HAVELI, DAMAN &DIU                             | 501                                                         |
| DELHI                                                       | 12,488                                                      |
| GOA                                                         | 1,158                                                       |
| GUJARAT                                                     | 41,292                                                      |
| HARYANA                                                     | 21,657                                                      |
| HIMACHAL PRADESH                                            | 4,929                                                       |
| JAMMU &KASHMIR                                              | 3,264                                                       |
| JHARKHAND                                                   | 44,023                                                      |
| KARNATAKA                                                   | 56,607                                                      |
| KERALA                                                      | 9,380                                                       |
| LADAKH                                                      | 164                                                         |
| LAKSHADWEEP                                                 | 3                                                           |
| MADHYA PRADESH                                              | 168,274                                                     |
| MAHARASHTRA                                                 | 99,006                                                      |
| MANIPUR                                                     | 1,388                                                       |
| MEGHALAYA                                                   | 1,560                                                       |
| MIZORAM                                                     | 588                                                         |
| NAGALAND                                                    | 509                                                         |
| ODISHA                                                      | 32,833                                                      |
| PUDUCHERRY                                                  | 274                                                         |
| PUNJAB                                                      | 18,743                                                      |
| RAJASTHAN                                                   | 66,793                                                      |
| SIKKIM                                                      | 170                                                         |
| TAMILNADU                                                   | 32,526                                                      |
| TELANGANA                                                   | 38,180                                                      |
| TRIPURA                                                     | 2,248                                                       |
| UTTAR PRADESH                                               | 333,641                                                     |
| UTTARAKHAND                                                 | 7,177                                                       |
| WEST BENGAL                                                 | 61,076                                                      |
| TOTAL                                                       | 1,398,951                                                   |

Source: Reported by Banks on Jan Dhan Drashak App