Dr. N.G.P.

ARTS AND SCIENCE COLLEGE

(An Autonomous Institution, Affiliated to Bharathiar University, Coimbatore)
Approved by Government of Tamil Nadu and Accredited by NAAC with 'A' Grade (2nd Cycle)
Dr. N.G.P.- Kalapatti Road, Coimbatore-641048, Tamil Nadu, India
Web: www.drngpasc.ac.in | Email: info@drngpasc.ac.in | Phone: +91-422-2369100

RURAL BANKING

TOPIC: BANKING CORRESPONDENCE

DHARUNI S
191BI008
III B Com (B&I)
Department of Commerce Banking and Insurance

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 INTRODUCTION -BANK

•A bank is a financial institution which performs the deposit and

lending function. A bank allows a person with excess money
(Saver) to deposit his money in the bank and earns an interest
rate. ... Thus, the banks act as an intermediary between the saver
and the borrower

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COIMBATORE | INDIA 2
 BUSINESS CORRESPONDENCE

1. The RBI has allowed banks to appoint individuals as agents for

providing basic banking services in remote areas, where there are

no banks or in areas where banks can’t be practically operated.

Such agents are called as business correspondents(BCs).

2. Business Correspondents function on the basis of a commission

model. They receive a commission from the bank for the services

rendered by them like each new account opened for customers,

money transfer transaction or new loans disbursed

Dr.N.G.P. Arts and Science College

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COIMBATORE | INDIA
 BUSINESS CORRESPONDENCE

• Other important responsibilities:

• Upon the death of the bank account holder, business
correspondents ensure to inform the bank about deactivation
of the account.
• They also consider any risk associated with handling of cash at
ground level and take suitable measures to ensure security.
• Asintermediaries of the banks, business correspondents ensure
the confidentiality of vital customer information.
• For delivery banking services, BCs are authorised to use the
equipment and technology as assigned by the banks and are
responsible for efficiently using them.

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COIMBATORE | INDIA 4
 BUSINESS CORRESPONDENCE
Business Correspondent Roles and Responsibilities
• Business Correspondents ensure the delivery of last mile banking
services to millions of customers on behalf of the banks.
• With regards to all such transactions, the Business
Correspondent, his or her agent shall be authorised to accept or
deliver cash either at his place of work, or any suitable location
subject to the ceilings per day / per customer as specific.Other
important responsibilities:
• For those customers who wish to close their bank accounts, the
Business correspondents undertake the accountability to inform
the local branch or the centralized hub of Bank/ NBFC about
such closure of accounts.
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