The National Strategy for Financial Inclusion set up by the Government of India has asked regulators like RBI, SEBI and IRDAI to leverage the network of business correspondents in rural India to increase financial inclusion.
If the proposal goes through, business correspondents can distribute insurance policies and mutual funds.
As on February 2019, India has a network close to 5 lakh business correspondents in rural areas.
The committee said, “The objective of providing a basic bouquet of financial services can be achieved through designing and developing customized financial products by banks and ensuring efficient delivery of the same through leveraging of Fin-tech and banking correspondents (BC) networks. It is recommended that banks should strive for capacity building of their BCs so that they can be utilised for delivery of a wider range of financial products such as life/ non-life insurance products, pension products, mutual funds and so on.”
The committee feels that the rural population should have easy access to thevformal financial sector. The report said, “Every village to have access to a formal financial service provider within a reasonable distance of 5 km radius. The customers may be on boarded through an easy and hassle-free digital process and processes should be geared towards a less-paper ecosystem.”
