The document discusses the implementation of financial inclusion through the Business Correspondent (BC) model in Punjab National Bank (PNB). It analyzes data collected from 160 respondents and 8 BCAs in Jaipur district to study the awareness levels, issues, and effectiveness of the BC model. Key findings include low awareness of financial products, operational issues with smart cards and POS devices, and lack of proper training and compensation for BCAs. Suggestions are provided to improve implementation such as increasing awareness campaigns, reducing smart card issuance timelines, auditing the model, and offering more services through BCAs.

1. IMPLEMENTATION OF
FINANCIAL INCLUSION
THROUGH BC MODEL
BY:-
PIYUSH PODDAR - 2004
SHUBHAM AGARWAL – 1995
FMS-IIRM 2011-2013

2. OBJECTIVES
To study the process of BC model in PNB.
To study the issues associated with BC model at
ground level.
To analyse the level of awareness among rural people
regarding the services provided by BCAs.
To analyse the level of implementation of BC model
and working of BC Agents.

3. LIMITATIONS OF THE STUDY
Communication barrier
Lack of authority
Low interest of rural people
Limited sharing of information due to involvement of
confidential data.
Time constraints.
Distance criterion was one of the constraints.

4. RESEARCH METHODOLOGY
RESEARCH TYPE • DESCRIPTIVE
Deliberate &
SAMPLE
Random
TYPE
sampling
160 SAMPLE
respondents & SIZE
8 BCAs

5. Questionnaire
Primary Observation
Data Informal Interviews
Data
collection
techniques
Secondary Bank’s literature
Data Internet
NABARD report

6. Statistical
Tools
(Percentage
Method)
Tools Of Data
Interpretation
(Bar graphs,
Pie- charts &
Venn diagram)
Analysis
Tool
(Ms-Excel)

7. Financial inclusion
“Financial inclusion may be defined as the
process of ensuring access to financial services
and timely and adequate credit where needed
by vulnerable groups such as low income
groups at an affordable cost.”

8. Business correspondent model
Government of India launched Third party banking in
2006 with the intent of achieving the milestone
“Financial Inclusion”.
The BC model was explained in 2008 report submitted
by Dr. C. Rangarajan.
Model was introduced to cater financial inclusion in a
cost effective manner.
RBI focused on ‘no frill account drive’ by regulating this
model.
It is based on branchless banking concept.
The BCs are permitted to carry out transactions on
behalf of the bank as agents

9. Major activities of Business Correspondence
agents
Opening of no frill and other regular deposit accounts under smart
card.
Collection and payment of small value deposits and withdrawals
Payment of sanctioned. / disbursed small value loans
Receipt and delivery of small value remittances / other payment
instruments
The BC/his agent will be authorized to accept / deliver cash either at
his place of work or at any convenient location
Furnishing of mini account statements and other account information
Recovery of principal / collection of interest in respect of borrower
accounts.
Any other service on behalf of the Bank, duly authorized by the
appropriate authority.

10. Organizational profile
Established in 1895 in Lahore
The bank has over 35 million customers through
4540 offices including 421 extension counters
PNB offers banking products, and also operates
credit card and debit card business, bullion
business, life and non-life insurance business, and
gold coins and asset management business.
It has also set up 11 specialized International
Banking Branches (IBBs)

11. Bc model in pnb
Started in the year 2009 in PNB.
Started in 2011 in Jaipur district.
BC Model:- Bank (PNB)
TSP
BC Agents
(Integra)
Corporate BC
(i25)
Individuals were appointed as BCAs to impart the model.
The remunerations was fixed by the corporate BC. It was Rs.3000/month
and Rs. 1/transaction more than 1000 transaction.
FWT(FTC) also work as BC model.

12. Technological details
The various Technology components include the
following:-
Smart Card
POS Machine with Biometric Devices, Smart
card reader, Printer etc.
Technology providers’ Intermediary Services
Bank’s Intermediary Services
Bank’s FINCBS Server
Bank Main CBS Server

13. Name of a/c holder
Photograph of
a/c holder
Code of BCA

14. Modem ports
Finger print scanner
Receipt printer
Display screen
Standard keyboard
Smart card reader Biometric card reader

15. PROCESS FLOW
Customer
Signature & A/c details Capture
POS Machine
Data Flow
Vendor's
Intermediary server
FILE FORMAT CHANGE
Bank's Intermediary
Server
Data Validation & Data Upload
FINCBS Server
Updatation
Main CBS Server

17. Data Analysis
Respondents BCAs
FINANCIAL IMPLEMENTATION
Household profile BANKING HABIT AWARENESS LEVEL
POSITION LEVEL

18. Household profile
EARNING MEMBERS
4% 3%
30%
1
2
63%
3
>3

19. EDUCATION LEVEL
4% 12%
12%
ILLITERATE
PRIMARY
23% 32% SECONDARY
HSC
SSC
17%
GRADUATE

20. EMPLOYMENT LEVEL
59
60
50
41
40
28
30
18
20
EMPLOYMENT LEVEL
10 6 5 3
0

21. FINANCIAL POSITION
SAVINGS DETAILS
5% 9%
YES
NO
NA
86%

22. MONTHLY SAVINGS
28% 31%
<1000
1000-2000
11% 2000-3000
3000-4000
18%
12% >4000

23. SAVING INSTITUTIONS T-160
O-20 PO
B-90
3(2%) C-132 3(2%)
17
(11%)
8(5%) 46(29%)
NA
4(2%)
10
55(36%)
13
(6%)
1(1%) (8%)
I-15
Note:- Percentages are mentioned in Parenthesis

24. BANKING HABIT
Saving A/c at bank branch or at other banks
38%
YES
62%
NO

25. LOAN AVAIL
46%
54% YES
NO

26. SOURCES OF LOAN
O B M F&F
17 9 22 4 11 4 10
(6%)
(11%) (6%) (14%) (3%) (7%) (3%)
NA
7 2
(2%)
(4%)
S 72
(46%)
Note:- Percentages are mentioned in Parenthesis

27. Implementation level
SMART CARD AVAILABILITY
41%
YES
59%
NO

28. SMART CARD USABILITY
14%
27% YES
59% NO
NA

29. Usage of smart cards
20% 20%
None
1 Time
2 Time
60%

30. SATISFACTION LEVEL OF BENEFICIARIES
YES
0%
YES
NO
NO
100%

31. REASONS OF DISSATISFACTION
14% SMART CARDS NOT
ISSUED
12%
NOT RECOGNISING THE
FINGER PRINTS
15% 59%
ACCESSIBILITY PROBLEM
LIMIT OF TRANSACTION

32. AWARENESS LEVEL
AWARENESS OF PNB MITRA
18%
YES
NO
82%

33. AWARENESS OF SWABHIMAAN
10%
YES
NO
90%

34. AWARENESS OF DO’s & DONT’s OF A/c
43%
57% YES
NO

35. PERCEPTION TOWARDS BANKING
3%
NECESSARY & HELPFUL
40%
FRAUD & CHEATING
57%
TIME CONSUMING
ONLY FOR ELITE &
EDUCATED CLASS
0%

36. DATA COLLECTED THROUGH
BCA
VILLAGES BASE BRANCH NAME OF BCAs TOTAL AOF SMART
POPULATION CARD
ISSUED
NIWARU JHOTWARA Mrs. Karuna 7000 450 -
DHAULARAUJI KHAWARANIJI Nirmal Sharma 5500 350 5
DHAULA GATWADI Chitra Mal Kumawat 5000 150 -
BOBADI GATWADI Kailash Chandra Choudhary 3500 200 45
REHLANA HARSOLI Ritambhara Devi 7000 161 38
DHANDHOLI HARSOLI MahendraRaigar 3000 200 47
KHEDIMILAK KARANSAR BanwariLal 3500 365 21
SINODIA BHADHWA MalehandMalkar 5000 308 94

37. RATIO OF AOF TO THE TOTAL POPULATION
7000 7000
7000
6000 5500
5000 5000
5000
4000 3500 3500
3000
3000 TOTAL POPULATION
2000 AOF
1000 450 350 365
150 200 161 200 308
0

38. RATIO OF AOF TO SMART CARD ISSUED
450
450
400 365
350
350 308
300
250
200 200
200 161
150 AOF
150 Smart Card
94
100
45 38 47
50 21
0 5 0
0

39. DETAIL OF BCAs TRAINING
25%
YES
NO
75%

40. DESIRE MORE TRAINING
NO
0%
YES
NO
YES
100%

41. VISIT OF BASE BRANCH MANAGER
YES
0%
YES
NO
NO
100%

42. SPACE PROVIDED BY
COMPENSATION
THE BANK
DETAILS
YES
0% YES
12%
YES YES
NO NO NO
88% NO
100%

43. FINDINGS
Providing door steps services to the people helps in saving time and
transportation cost.
Unawareness of No Frills Bank Account among the respondents.
Time constraint of issuing smart cards was of 4 months and more.
Operational issues of POS device & smart cards
Functional issues of BCAs training and compensation.
Slow process of implementation as no checking done till date.
Majority of respondents take loan from money lenders, friend and
family for their needs at high rate of interest i.e. from 24% to
60%, showing a scope for the model.
RBI’s guidelines were not followed properly
No other product offered through smart cards other than saving and
withdrawal

44. suggestions
PNB should start counseling camps, visit of manager should be fixed
per week to impart awareness regarding the program.
Time constraint while issuing smart card should be reduced by
improving the work at TSP level.
BCAs compensations should be made so as to remove the grievance.
Majority of people engaged in taking loan from the institutions other
than banks so loan facility like KCC should also be started through
smart cards.
The service of Govt. payments like MNREGA, Pensions (Old
age/Widow/PH) & Scholarships etc. could be introduced through
smart cards in every village at a faster pace.
Bank may review the maximum transaction limit of the BCA.
Further they may also develop systems to provide for
emergency withdrawal of higher amount at the branch level.

45. Connectivity at village level should improved for
hassle free operations at the ground level.
Bank/TSP should conduct the training programs for
BCA focusing on maintenance of registers, POS
handling, enrolling, and customer handling as also
making them aware about other banking/ insurance
products.
Technical improvements should be done by TSP to
remove the technical snags of POS device and smart
cards.
Audits should be done at regular intervals by TSP and
bank’s authorities.