RBI Overhauls Business Correspondent Model for Better Financial Reach

The Reserve Bank of India has issued draft amendments to revise the Business Correspondent (BC) framework, with feedback invited until May 5, 2026, as per news reports.  

The proposals draw from a committee comprising officials from the RBI, the Department of Financial Services, the Indian Banks’ Association and the National Bank for Agriculture and Rural Development. 

Decline in Rural Outreach 

The revision comes amid a fall in BC presence in villages. As per RBI data, the number of outlets declined to 13.11 lakh in FY25 from 15.48 lakh in FY24.  

The draft seeks to address gaps in access, particularly in rural and remote areas where branch penetration remains limited. 

Proposed Delivery Structure 

The central bank has outlined a 3-tier system for banking services. This includes bank branches, Business Correspondent–Banking Outlets (BC-BOs) and Business Correspondent–Banking Touchpoints (BC-BTs).  

BCs are described as key channels for extending basic banking services at the last mile. 

Operations and Scope of Services 

BC-BOs will function as fixed-location units offering a range of services similar to bank branches. They are required to operate for a minimum of 4 hours a day and at least 5 days a week.  

BC-BTs will not have fixed hours and will handle smaller transactions. Both categories will be linked to a single bank. 

Changes in Remuneration 

The draft proposes a structured payment system. BC-BOs will receive both fixed and variable components, while BC-BTs will be paid through variable incentives.  

The Indian Banks’ Association has been tasked with framing a benchmark-linked remuneration structure, with a portion tied to customer satisfaction. 

Transition And Compliance Requirements 

The business facilitator category is proposed to be discontinued. Existing entities will be required to migrate to the BC framework by September 30, 2026.  

Banks will need to conduct due diligence before onboarding BCs, including assessment of financial position, governance standards, operational capacity, and technology. 

Read More: RBI Invites Comments on Draft Branch Authorisation Amendment Directions 2026! 

Conclusion 

The draft amendments outline changes to structure, payments, and oversight within the BC framework, with the focus on improving access to banking services in underserved regions. 

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