SUMMER INTERNSHIP PROJECT PRESENTATION

Evaluation Of Business Correspondent/Business

Facilitator Model In Jammu And Kashmir
SUBMITTED BY : PIYUKSHA PARGAL
Roll No. : 37MBA18
 “The test of our progress is not whether we add
more to the abundance of those who have much; it
is whether we provide enough for those who have
too little.”
- Franklin D. Roosevelt
 FINANCIAL INCLUSION

Financial Inclusion is the process which ensures the

necessary financial products and services
needed by the weaker and poor sections of
society are made available at affordable costs, in
convenient manner and by mainstream
institutional players.

Khan Committee in 2004

 Who is a Business
Correspondent/ Facilitator?

Non-financial commercial establishments that offer basic financial services under the
name of a financial services provider, becoming access points to the formal financial
system.
 How does a BC work ?

Services Offered

Who can act as a BC?

Type of BC

Payment of fee

Area of operation Kiosk Portal – Deposits, A/C opening,

Point-Of-Sale Devices
money transfers and withdrawls
 CURRENT STATUS OF BCs in J&K
( As per the JKSLBC 109 Agenda report as on 31 Dec’ 2018 )

Particulars 1 2 3 4 5 6
Name of the Bank JKB SBI PNB JKGB EDB OBC TOTAL

Bank Mitras (BM) Engaged 976 213 52 223 28 4 1,496

Active 744 213 38 223 10 4 1,232
Inactive 232 0 14 0 18 0 264
Total 895 213 40 0 3 4 1,155
Working 654 213 4 0 3 4 878
Micro ATMs
Non-Working 241 0 36 0 0 0 277

No. of AEPS Devices provided 895 213 40 0 28 4 1,180

No. of SSAs Allotted 1173 216 95 270 73 0 1,827
SSAs Bank Mitras 615 158 52 172 28 0 1,025
Covered through Branches 558 58 43 98 45 0 802
6
 BANKING NETWORK OF BUSINESS CORRESPONDENT IN J&K

TOTAL NO. OF
NAME OF THE BANK NAME OF THE DISTRICTS
BC/BF

Jammu, Anantnag, Budgam, Bandipora, Baramulla, Doda, Kathua, Kupwara,

J&K Bank 986* Shopian, Samba, Reasi, Ramban, Rajouri, Pulwama, Kulgam, Kishtwar,
Udhampur, Ganderbal, Srinagar, Kargil and Leh

Jammu, Anantnag, Budgam, Bandipora, Baramulla, Doda, Kathua,

State Bank of India (SBI) 239* Udhampur, Kupwara, Shopian, Samba, Reasi, Ramban, Rajouri, Pulwama,
Poonch, Kulgam And Kishtwar

J&K Grameen Bank 223* Jammu, Bandipora, Baramulla, Kathua, Kupwara, Samba, Rajouri and Poonch

Oriental Bank of
4 Udhampur, Katra and Vijaypur
Commerce (OBC)
Punjab National Bank Jammu, Bandipora, Udhampur, Jammu, Poonch, Kulgam, Reasi, Samba,
52
(PNB) Kathua, Kishtwar and Doda
Ellaquai Dehati Bank
32 Kulgam, Pulwama, Budgam, Ramban, Srinagar and Ganderbal
(EDB)
*indicates the updated number of BCs as conveyed by the zonal offices or FIDD department of the respective banks.
 Objectives of the Study

 To assess the need and viability of BC model as a tool for financial inclusion.
 To facilitate a comparison between the BC models of the three banks i.e., J&K Bank, JKGB and
SBI.
 To examine the impact of BC model on the entities providing and receiving the services.
 To study the relationship between bank branches and their respective BCs and the challenges and
problems faced by stakeholders involved.
 To highlight the issues faced by the model and recommend changes for improvement of BC
model.
SAMPLE SIZE AND METHODOLOGY

Sample Unit Samba Rajouri Jammu Udhampur Reasi Total Sample Size

Individual BCs 6 14 12 6 7 45
Agents of Corporate 5 4 6 6 5 26
BCs
Customers of BCs 20 32 25 15 16 109
Non Customers of BCs 5 3 4 6 5 23

Branch managers 5 8 9 6 5 33
Corporate BCs - - - - - 5
Discussion with RBI - - - - - 4
and other head offices

TOTAL 245
RESEARCH METHODOLOGY

Primary And Secondary Data both were Used

01

02
Questionnaires and Informal interviews were the tools
used to collect data

03
Sampling methodology used :
Stratified sampling method – For BCs
Purposive sampling – For customers and non- customers
 1 COMPARISON BETWEEN
BC MODELS OF THE
THREE BANKS
– SBI, J&K BANK, JKGB

11
BUSINESS
BUSINESS
CORRESPONDENTS
BUSINESS CORRESPONDENTS
OFOF
CORRESPONDENTS J&K
OF SBI
BANK
JKGB
 BASIS JKB SBI JKGB

Khidmat Centre Customer Service Point Branch and mobile BC. They provide “Door to
Area of
Door service”
operation
Individual BC Corporate BC with further Individual BC
Model
agents(CSP)
No Fees charged Nominal amount of fees charged No fees charged
Fees
on fund transfer and crossing limit
Charged of withdrawals.

It is fixed on the basis It ranges from 1200-2000 It is fixed as 2000 only + commission which
Basic
on transactions no. of depending on the corporate BCs.+ does not become much
Incentive accounts and ranges commission.
from 3000 to 5000 +
commission.

Commission is paid by Commission is either paid by the Commission is paid to the BC’s by the zonal
Commission
the zonal office as bank to the Corporate BC which office after the statement is sent by the bank
Paid generated through the further distributes the share of the branch to the zonal office stating all the work
kiosk portal. agent in their settlement account. that is done by the bank. If the branch does
Sometimes bank may itself not provide with complete information, their
distribute the money to the BC and commission may get manipulated
their agents.
13
 BASIS JKB
Khidmat centres are provided with
Technical
AEPS devices for biometric
Support transactions and Micro ATM for card
enabled transactions. Also kiosk
allows real time services.
SBI
CSPs are also provided with AEPS
devices for biometric transactions and
Micro ATM for card enabled
transactions. Also kiosk allows real
time services.
JKGB
BCs of JKGB are still not linked with
Technology as they cannot provide
any real time service because no
BC is provided with any ICT channel
of delivery.

 Payments  Payments  Payments ( small amounts of

Services
 Receipts  Receipts MNREGA, Saving Bank
being  PMJDY account  Tiny Account opening Withdrawls)
 SB General Account  Tiny FD  Receipts
offered  Current Account  Services for account opened  Loan Recovery
 Non-Cash Remittance (only for  IMPS fund transfer to any banks  Current account
customers with J&K bank  Aadhar seeding  Fixed/recurring account
Account)  Social security schemes  KCC
 Aadhar Seeding  JLG/SHG
 Loan documentation( KCC  Non cash remmitance( through
included) NEFT/RTGS)
 Social security schemes

Minimum requirement is class 12th Minimum requirement is class 12th 12TH pass is preferred but the
Eligibility
pass and maximum not defined. pass and maximum not defined of the criteria is 10th pass.
14
CSP’s.
 5 CORPORATE BCs
of SBI

STARFIN SAVE ZERO MASS

FIA TRANSCORP
TECHNOLOGY SOLUTIONS TECHNOLOGY

15
 2 FINDINGS FROM THE
ANALYSIS OF BC

16
 1. Rank the following statements for the bank branch as (SA)
Strongly agree, Agree (A) , Neutral (N ), Disagree (DA) and
Particulars
Questionnaire includes : Strongly Disagree (SDA) P NP
•What service contributes to your major part of income?
 Demographics
1. Customer Acquiring
•Saving
 SB bank accounts
general account
 Services offered  No frills account/BSBD
•No Frills Account
 Current account
 Technical and branch •Cross Selling
Fixed account
•Loans Recurring
and advances
account
support Particulars
Particulars

•Any other mention ______________
GCC/KCC No.
SAof customers
A N enrolled
DA SD
 Customer Oriented 2. Payments (NREGA, Saving bank a/c )
3.Receipts
Pradhan
Adequate Mantri
supportJan DhanYojna
from (PMJDY)
the bank branch
A

 Financial  SB general Account/BSBD

 Loan is
Commission paid promptly by the bank
Repayment
Sustainability Pradhan Mantri Suraksha BimaYojna (PMSBY)
4. Non cash remittance
Banks are making you do extra work in addition to that
 Feedback BC no.
Pradhan
ofTotal
NEFT/RTGS/IMPS
Mantri Jeevan
Debitofcredit Jyoti
No.
card servicesofBimaYojnaNumbers
(PMJJBY)
of loans No. of
 Aadhar seeding
Customers Visited accounts given/ applications transactions
5. Other
Atal
per monthservices
Pension Yojna (APY)
Whether performing banking operations infacilitated?
opened
 Promotion, nurturing of SHG's, JLG's etc
branch
 Documentation or facilitation of retail loans to customers to customers
 Creating awareness about savings and other products
 Creating awareness about social security schemes.

17
 • Only 10% of the BCs surveyed were women.
Composition of
male and female
BCs

• The JKGB BCs provide services full time during the bank hours and whatever they do
for their survival is done on free days, so all of them are considered as full time BCs.
Full time v/s Whereas only 19% of CSP act as full time BCs and 58% of Khidmat Centres act as full
Part time time BCs.
services

Name of the bank Average no. of business days Average no. of business hours

SBI 6 days more than 10 hours

J&K BANK 7 days more than 10 hours

JKGB 5 days 6-10 hours

18
 Picture showing a CSP, Reasi owned and operated by a woman named Rajni Devi. She is among the very few
female agents who work on their own without help..
19
 EDUCATIONAL QUALIFICATION OF SAMPLE
BCs

13% Class 10
28% Class 12
Graduate
1%
39% Others (Diploma, etc)
19%
Post Graduate

20
Age and Educational Qualifications
 In the study it can be found that BCs offered variety of services
Scope of activities which had different relevance to different types of BC

Range of services provided

NON CASH BSBD ACCOUNTS LOAN RECOVERY DEPOSITS PAYMENTS SOCIAL SECURITY LOAN FD/RD
REMITTANCE SCHEMES DOCUMENTATION

JKB SBI JKGB

21
 Location Of
BCs

On the contrary, Picture showing CSP at Ritti village on Rmanagar Road, Udhampr district, 17 km away
Picture showing a CSP point shifted to inside the bank (as a counter) making the village
from the branch still functioning properly with father as kiosk and son as sub kiosk.It is the only point in the
allotted devoid
village and of services.
no ATM is available. They still earn less due to lack o knowledge on various schemes.
 BENEFITS OF BC MODEL TO THE SERVICE PROVIDERS

Opportunity to
Become
Entrepreneurs

Employment,
Status and Respect
In The Area
Increased
Customer Base To
Existing Business
.
 Ashok Kumar, 32, VLE of J&K Bank and CSP of SBI on wife’s name. He started as a VLE, got resources and a
direction. He is among the first in Samba to start the business. Though being a CSP do not bring him much
income but it has paved way for many other sources like CSC, SBI life insurance etc. He now has an assistant as
shown in the picture, has status in his village, is recognized as an important person. He has further plans in the
head about business, able to feed whole of his family and all because he became a VLE first and he is thankful.
24
 Branch Solki, JKGB bank, District Rajouri
Raman Kumar, 43, became a BC of JKGB in 2013. He is very honest and sincere towards his job. He has
learnt almost all the work of the bank. All the villagers know about him and contact him for any work.

25
 Financial Viability of BC
model

26
FINANCIAL VIABILITY OF THE MODEL

REVENUE/ EXPENDITURE J&K BANK BCs SBI CSPs

Minimum commission 3700 1200
Account opening commission 300 120
Transactions commission (payments and receipts)
(3375 +1500 )4875 (1080+900)1980
Average amount- 3000
Non-Cash remittance (including Aadhar seeding)
(250+75) 325 (600+50) 650
Average amount 5000
Total revenue (1) 9200 3950
Room rent 1500 1500
Electricity 1000 1000
Internet (broadband) 800 800
Stationery 500 500
Sub kiosk or employee 3000 3000
Other charges (petrol etc.) 1000 1000
Maintenance charges of infrastructure 1000 1000
Total Expenditure (2) 8800 8800
Profit (1-2) 400 -4950
 Problems being faced by Business
Correspondents

PROBLEMS
CASH
COMMISSION TECHNICAL WITH BASE
HANDLING
PROBLEMS PROBLEMS BRANCH
PROBLEMS
 3
FINDINGS FROM THE
ANALYSIS OF
CUSTOMERS AND NON
CUSTOMERS

29
 IMPACT OF BUSINESS
CORRESPONDENT MODEL
ON CUSTOMERS
UTILIZATION OF FINANCIAL
INCLUSION SCHEMES
 Access to BSBD Accounts
 Part of formal banking system APY
 Banking to the underbanked
PMJJBY
population
 Utilization of financial PMSBY
inclusion schemes
PMJDY

Picture 0%
showing 20%
daily wagers as customers of BC who
40% of centre but now have
had no savings before the opening 60%
80%
access to NREGA payments and have inculcated habit of
savings as they come to the BC nearby whenever they
have money to deposit.
 PRIMARY PUPRPOSE OF VISITS
33%
35%
30%
25% 22%

20% 17%

15% 12%
8% 8%
10%
5%
0%
Deposits of Withdrawals Transfer of Opening Loan related Non-banking
money money Accounts services Services

 Area or village the BC is serving in

 Local or Outsiders
 STATUS OF FINANCIAL
LITERACY AMONG CLIENTS

100%
90% 27
80% 51
58
70%
79
60%
50%
40% 73
30% 49
42
20%
21
10%
0%
Knowledge about Information about Complete Awareness about
social security utilities and Knowledge about where money is
schemes disadvantages of services offfered being saved
NFA by BC

aware unaware
32
 SATISFACTION AMONG
CUSTOMERS

ATTRIBUTES AFFECTING CUSTOMER

SATISFACTION
Trust factor 13

Proof of transaction 2

Behaviour of BC 10

Advice and counselling 25

Easy Assessibility 13

Scope of services 35

Technical support 2
33
 District Rajouri, Member of SHG
She is a housewife. She opened an account with the BC of JKGB. The BC introduced her to the SHG
scheme. She and her friends took a loan under this scheme and they used that loan for their individual
benefits and are paying off the money now.
34
 Awareness among Non Customers
Aware clients
42%
unaware clients
58%

Aware clients unaware clients

REASONS FOR NOT AVAILING BC SERVICES

Lack of knowledge about services being provided

Bank branch available nearby

Lack of trust

Bad customer Experience

0 10 20 30 40 50 60
35
 4 FINDINGS FROM THE
FEEDBACK FROM
BRANCH MANAGERS

36
 SBI branch managers rated their only 45% of their BCs not useful, JKGB rated
more than 80% as very useful and JKB rated nearly 38% above useful.
 According to the JKB branch managers, shifting of ownership of non active
khidmat centres was a very important suggestion for better implementation
 JKGB branch managers insisted on enhancement of commission and making the
model supported by ICT enabled services.
 SBI branch managers agreed that account opening is a major problem as they
couldn’t be processed.
 The bank mitras of JKB and JKGB contributed to the Financial Literacy Camps
but the CSPs were not much cooperative.
BENEFITS TO BANK FROM BC MODEL
 In discussion with Branch Manager, JKGB branch, Ghagwal, Samba District.

39
 5 FEEDBACK FROM
CORPORATE BCs

40
 Challenges were huge in case of dealing with
principal banks and bank branches as according
to them they were non sensitive to the priority of
the model.

Client motivation and monitoring was the main

challenge according to the Corporate BCs

Diversity of customer needs and their problems

were a major issue

41
Issues of the BC Model

More Target
Bc As A Grievance
Driven And
Business Model Redressal
Less Demand
Paradox Mechanism
Oriented

Inactive
Financially Non
Business
Viable Model
Correspondents
This picture shows a Khidmat centre in Jyotipuram, Reasi district whose original position is
near Salal Dam but due to lack of business it was shifted here.
RECOMMENDATIONS FOR
THE IMPROVEMENT OF BC
MODEL

Improvement In Promotion Of
Publicity And
Governance Fianancial
Promotions
Over BCs Literacy

Revision Of
Solution To Bc
Existing
As A Business
Commission
Model Paradox
Structure

CAPACITY Encouragement
BUILDING OF of Bank Sakhi
BCs Model
My Experience
 THANKYOU

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