Some banks, such as State Bank of India and Union Bank of India, have offered welfare incentives to BCs, but such moves need to be more widespread across the system, the BCFI said at a virtual roundtable on Thursday.
As the number of transactions through the business correspondent (BC) channel has fallen amid the lockdown and the spread of Covid, individual agents must have a component of their pay fixed for the next six months, the Business Correspondents’ Federation of India (BCFI) has urged the government and banks.
The industry body has asked for a fixed remuneration of `5,000 per banking agent for the next six months across all banks. At present, incentives are provided by a few banks and these, too, are linked to performance-based criteria which, the BCFI believes, should be relaxed at this stage. The current pay structure for agents involves a fixed component and a variable one, with the latter based on the number of transactions. To earn even the fixed component, the agent must meet certain performance criteria, which usually stands at around 100 transactions a month.
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Seema Prem, CEO, FIA Global, said it is essential to support BCs at a time when fewer transactions have meant lesser pay for people employed in this segment. “While there has been a surge in the number of active agents, there has been a decline in the range of viable transactions at banking outlets, with the transactions being more skewed towards low-ticket withdrawals,” she said, adding that this has resulted in an increase in the cost of servicing the customer. As a result, the average income per agent has come down.
Some banks, such as State Bank of India and Union Bank of India, have offered welfare incentives to BCs, but such moves need to be more widespread across the system, the BCFI said at a virtual roundtable on Thursday. Further, the association has asked banks to begin sourcing and originating loans, especially to micro, small and medium enterprises (MSMEs) through the BC network across the country. “We are ideally placed with our extensive reach and connect with last-mile customers, including MSMEs, farmers and street vendors and they (banks) should use our channel to source loans digitally,” Prem said.
The BCFI is also working on a jobs registry for its customers from the remittance business, many of whom are migrant workers. Anand Kumar Bajaj, MD & CEO, PayNearby, said, “We have been working with various industry bodies to create a module for a jobs registry. From our BC agent network, we have started registering people in their villages, create a profile and try to port them on to the next opportunity at the nearest location.”