Bca Fi2021008

HO: Priority Sector & Financial Inclusion Division (Financial Inclusion Department)
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4 Floor, West Wing, Plot No. 4, Sector 10, Dwarka, New Delhi-75
HOPSFI/FID/POLICY/2021-22
05.06.2021
TO ALL OFFICES
In supersession of Financial
Inclusion Division Circular No.
03/2020 dt. 25.03.2020
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PSFID / FINANCIAL INCLUSION / CIRCULAR NO. 8 / 2021
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Reg : Policy on Business Correspondents.
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Policy guidelines on Business Correspondents was last circulated vide our Circular No.
03/2020 dated 25.03.2020.
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Board in its meeting held on 28.05.2021 vide resolution no. A-8 has approved a revised
“Policy on Business Correspondents” a copy of the said policy is enclosed.
All concerned are advised to ensure meticulous compliance of policy guidelines.

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(Arun Sharma)
General Manager
Encl : Policy for Business Correspondents

Policy for
Business Correspondents
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Division : Priority Sector & Financial

Inclusion
Version : 2021_PSFID_1.0
“strictly for internal 1 Policy on Business

circulation only” Correspondents
Version: 2021_PSFID_1.0
Policy Custodian
Division Priority Sector & Financial Inclusion
Officer in-charge Divisional Head
Policy Contact hofid@pnb.co.in
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Policy Version Control

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S. No. Version Number Version Date

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1 2021_PSFID_1.0 23 March 2021

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4
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Policy Governance
Frequency Of Review Annual
Last reviewed on 25.03.2020
Approval Path ORMC > RMC > BOARD
Supersedes Circular No. HO/FID/ 03/2020 dated 25.03.2020

Contents
Sl. No. Topic Page No.
1 Policy Overview 4
2 Guidelines on Financial Inclusion using BC Model 5
3 Objective 6
4 Selection Procedure for Business Correspondent 6
5 Eligibility Criteria for Business Correspondents 7
6 Area of Operation for BC Agents 13
7 Scope of Activities 13
8 Standard Operating Procedure and Logistics for BCA/CSP 15
9 Remuneration and Payment to the CBC/BC 17
10 Duties and Responsibilities at various levels 17
11 Control, Supervision and Monitoring 27
12 Surprise Verification System 28
13 Review / Renewal & Period of engagement 28
14 Agreements 29
15 Termination of Agreement 29
16 Technology to be used 29
17 Hardware & Software 30
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18 Help Desk 30
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19 Cash Management 30
20 Settlement/ Accounting 31
21 Mode of Payment of Remuneration/ Commission to BC
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22 Cost of BC device and other infrastructure 31
23 Financial education and Consumer protection 32
24 Grievance Redressal Mechanism 33
25 Insurance 33
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26 Fraud and Embezzlements 34

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27 Confidentiality and Secrecy 34

28 Identity cards 34
29 Infrastructure 35
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30 Risk and Risk Mitigation 36

31 Business Continuity and Disaster Recovery Plan 38
32 Audit 38
33 Training and Capacity Building 40
34 Service charges to be levied from the customers by Bank 42
35 Other conditions 42
36 Arrangement with Existing Service Providers 42
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37 Adoption of Micro-Credit scheme through JLGs (by sourcing through BC 42

agents)
38 Technology aided Micro Credit through BC agents in MFI model 44
39 Annexure - I 46
40 Annexure – II 47
41 Annexure – III 48
42 Annexure - IV 49
43 Annexure – V 50
44 Annexure – VI 51
45 Annexure – VII 52
46 Annexure – VIII 53

Policy Overview
Detailed guidelines on Financial Inclusion for extending Banking Services using
Information & Communication Technology (ICT) based Business Correspondents
were approved by Board in its meeting dated 09.06.2009 and further amended in its
meeting dated 22.07.2010 and circulated vide Financial Inclusion Cir. No. 06/2010
dated 27.08.2010.
Board in its meeting dated 25.03.2013 approved a scheme for engaging individuals
as our BC Agents. Further Board in its meeting dated 19.08.2013 also approved for
migrating our existing TSP/BC for covering Sub Service Areas (SSAs) through our
on-line Kiosk Banking Solution (KBS) technology. Various circulars have been
issued from time to time based on further guidelines received from Govt. of India &
Reserve Bank of India in respect of Financial Inclusion and application of on-line
Kiosk Banking Solution Technology, acquired by Bank.
Executive Committee in its meeting dated 05.12.2013 had approved deployment of
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only existing TSPs (Total Service Provider) as Corporate BCs for covering SSAs
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through KBS technology. Corporate BCs may engage Business Correspondent
Agents (BCA) for deployment at SSA level.
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This consolidated “Policy on engagement of BC” have been developed keeping in
view the guidelines on Financial Inclusion using BC Model issued by Reserve Bank
of India (RBI) and guidelines issued by Department of Financial Services (DFS),
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Ministry of Finance (MOF), Govt. of India (GOI).

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Applicability :
This policy outlines the functioning of the Business Correspondence model along
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with the branding, services and monitoring aspects and will be followed by Corporate
BCs, BC Agents and all employees of PNB.
All employees of the bank are expected to work as per the laid down policies and
guidelines. Restrictions in this policy are in line with RBI guidelines regarding
appointment and functioning of BC agents.
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This policy will be reviewed annually. This policy may be revised/changed as per
change in vision/policy of the bank or as per the change in guidelines of RBI / DFS,
MoF, GoI or any other situations as decided by the board.
Framework :
As per the earlier approved policy, PNB is following a Corporate BC structure for
appointment of Business correspondents. RBI guidelines on eligible
individuals/entities for selection as BC, area of operation, distance criteria, scope of
activities of BC is incorporated in this policy.
Technology to be used, accounting of transactions, Audit and grievance redressal

guidelines have been incorporated in this policy. Monitoring of operations of BC at
various levels has been incorporated. Training and capacity building as per RBI
directions have been included.

Guidelines on Financial Inclusion using BC Model
Banking Industry has seen enormous changes since last decade specially in terms
of adoption of new cost effective delivery channels like ATMs, e-Banking, Mobile
Banking and Business Correspondents Model. Out of these BCA Model is the
preferred model of Financial Inclusion for the Banks as it is the only model outside
Bank Branches which suits the target segment of Financial Inclusion.
The outsourced model of Business Correspondents compliments the existing

network of the Bank improving the reach, efficiency and ability to serve large number
of unserved population in a cost effective manner. As a customer centric public
organization, Bank needs to ensure that the service providers meet the benchmark
performance standards at each stage of delivery of service and uphold the values,
principles, control mechanisms, goodwill and reputation of the Bank.
Financial inclusion is not only a process but a mission for Punjab National Bank to
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empower unserved and underserved sections of the population. The endeavour of
the bank has been to connect these people with the banking system and make them
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a productive asset of the society. We are sure that Financial Inclusion would go a
long way in narrowing the social divide and thus removing sectoral/ regional
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disparities.
As per Sub-Service Area (SSA) approach, each SSA comprising of a Gram
Panchayat / part of a Gram Panchayat / group of Gram Panchayats, would consist of
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1000-1500 households. The gist of the guidelines is as under:

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“Each SSA is required to be covered by Branch/ Business Correspondent Agents.

Wherever the existing Branch is functioning satisfactorily, the same should be
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continued and remaining households in the allocated sub-service areas should be

covered through the BCA. Considering the larger benefits of the KIOSK banking
model, it should be endeavoured to migrate the BCAs to Kiosk Banking System”.
In order to make our FI transactions more efficient and safe, and also as desired by
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DFS, bank has moved its FI operations to an on-line mode and from a process of
local to central biometric authentication through UIDAI. Bank has since moved all
basic banking facilities to on-line real time mode to customers at the BC locations.
Kiosk Banking Solution (KBS) is a web based solution that can be easily deployed
through Personal Computers/ laptops (mapped to the bank’s system for this
purpose) at the BC locations. BC Agents using KBS are identified through biometric
authentication and OTP facility (as second factor authentication) provided by UIDAI.
Bank has also procured the FI Gateway which acts as a middleware between the BC
outlet and Bank’s CBS system. KBS uses the FI Gateway for on-line transactions
done in banks’ Centralised Banking Solution (CBS).

1. Objectives:
Imparting Financial Inclusion to the excluded and underserved population in

Rural as well as Urban areas using Business Correspondent (BC) model where
conventional Banking through Brick & Mortar branch is not viable/profitable and
improving operational efficiency and customer service by providing Doorstep/
near Doorstep Banking through BC agents.
1. To provide comprehensive financial services to the underprivileged

encompassing Savings, Credit, Cash in & Cash out services, Remittance,
Insurance, Pension, Mutual Fund etc. in a cost effective manner particularly
in untapped/unbanked areas.
2. To inculcate banking habit among the populace to increase their income
and assets and thereby enabling them to contribute to the economic
development of the nation.
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3. To frame operational guidelines for safeguards and controls in the activities
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of intermediaries (BCA, Corporate BC).
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4. To reduce operational and transactional cost as well as increasing
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efficiencies by providing Doorstep/ near-doorstep Banking service through

BC agents.
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5. To develop skill and efficiency in the BC agents and incentivize them for
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business expansion to make it a profitable venture for them.

6. To identify risks involved and suggest mitigation techniques to minimize
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probable loss.
7. To convert each BCA outlet into a profit center.
8. To implement Governments’/ RBIs directives on Financial Inclusion and to
achieve the targets assigned to the Bank.
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2. Selection Procedure for Business Correspondent
2.1 Corporate BC - Entity:
Executive Committee in its meeting dated 05.12.2013 had approved deployment

of only existing TSPs (Total Service Provider) as Corporate BCs for covering
SSAs through KBS technology. Accordingly, agreements were executed with the
existing TSPs for a period of three years. A PNB FD of Rs.10,00,000/- (Rupees
Ten Lakhs only) may be kept under Bank’s lien as security or alternatively a
suitable Guarantee/ Indemnity acceptable to the Bank.
RFP process should be followed for selection of New Corporate BCs as per CVC /
Bank guidelines in transparent manner.

Performance of Corporate BC shall be reviewed on quarterly basis through a

meeting with heads of Corporate BCs. In case the performance is not found
satisfactory, their services may be terminated by serving suitable notice by the
Bank. In such case the Security Deposit would not be refunded. The period of
contract can be further extended subject to their satisfactory performance and
review by the Bank and at the exclusive discretion of the Bank.
Corporate BCs will in turn appoint BC agents on behalf of bank at various

locations identified by bank. BCs will be appointed as per business decision or at
the instructions of DFS/SLBC for covering unbanked villages.
While engaging Corporate BC / BC Agents, it must be ensured that the Code of

Conduct in outsourcing of financial services by banks issued by Reserve Bank
of India vide RBI/2006/167 DBOD.NO.BP. 40/ 21.04.158/ 2006-07
dated November 3, 2006 and as amended from time to time is duly followed.
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2.2 BC Agent:
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BC agents will be deployed by CBC after sanction by a committee headed by
Circle Head comprising of Circle Head, AGM/CM posted in Circle Office and
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Incumbent of the Base Branch on checking the eligibility criteria and with proper
justification for deployment. Deployment will be done after conducting an
interview by the committee.
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Moreover, to keep a check on deployment of BC agents by the Circle offices, it

has been decided to route all BC appointments through Head Office. Mapping of
village/ward with the base branch needs to be configured in Kiosk Banking
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Solution before any Circle Office can create a BC for that branch in KBS. This
mapping will be done by Head Office on receipt of request from Circle Offices
along with recommendation of Zonal Office and with proper justification regarding
appointment of BC. These BCs will be marked as non-mandatory and will not be
paid the fixed monthly remuneration.
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3. Eligibility Criteria for Business Correspondents
With the objective of ensuring greater financial inclusion and increasing the
outreach of the banking sector, RBI has permitted to use the services of
intermediaries in providing financial and banking services through the use of BC
model. These intermediaries can be individuals as well as entities.
As per the directives of Department of Financial Services(DFS), Ministry of

Finance(MoF), Govt. of India(GoI), banks were directed to move towards a
Corporate BC model and individual BC model should be shelved. All individual
BCs must be brought under the Corporate BC model at the earliest.
3.1 Banks may use services of following individuals and entities for selection
as BC as per RBI guidelines.

I. Individuals like honourably retired bank employees, retired teachers,

retired government employees and ex-servicemen, individual owners of
kirana/ medical / Fair Price shops, individual Public Call Office (PCO)
operators, agents of Small Savings schemes of Government of
India/Insurance Companies, individuals who own Petrol Pumps,
authorized functionaries of well run Self Help Groups (SHGs) which are
linked to banks, any other individual including those operating Common
Service Centres (CSCs);
II. NGOs/ MFIs set up under Societies/ Trust Acts and Section 25
Companies;
III. Co-operative Societies registered under Mutually Aided Co-operative
Societies Acts/ Co-operative Societies Acts of States/Multi State Co-
operative Societies Act; Post Offices; and
IV. Companies registered under the Indian Companies Act, 1956 with large
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and widespread retail outlets, excluding Non Banking Financial
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Companies (NBFCs)
In North Eastern Region, any local organization/association not falling under
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any of the categories listed above may be appointed by Bank as Business
Correspondent after due diligence and is recommended by the DCC for being
approved as Business Correspondent and the same is considered by the
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Regional office of the RBI for granting suitable exemption from the RBI’s
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guidelines for appointing such entities as BCs. The Regional Director of RBI,
Guwahati should therefore be approached by the bank for the purpose. (in
terms of RBI circular no. DBOD.No.BL.BC.63/22.01.009/2009-10 dated 30th
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November 2009).
3.2 Selection criteria for eligible individuals and/or entities by Corporate

Business Correspondents.
 Should know the local language/dialect

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 Should satisfy the norms of due diligence.
 Should have knowledge about the area.
 Should not affiliate to any political party/ religious organization.
 The organization/ office bearers/ members should not have any criminal
record which should be verified from police record. The selection should
however not be withheld for delay in receiving the police verification report in
case of urgency. In all such cases the Police verification report should be
obtained within a reasonable time.
 The agent should be referred by two customers of our bank having

satisfactory dealings or two reputed persons of the locality known to the Bank.

 Should not be a defaulter borrower to any Bank.
 Past dealings, if any, with Bank should have been satisfactory.
 There is no minimum educational qualification for Business correspondents,

but preferably he/she should be 10th standard pass.
 The Business Correspondent should be a resident of the area in which the

proposed BCA is to be appointed.
 Age in respect of individual BCA should not be less than 18 years and not
exceeding 60 years at the time of selection and would continue till the age of
65 years subject to annual review.
 In case of individual, he should not be a director or officer/ employee of the

Bank or a relative having the same meaning under section 6 of the
Companies Act, and in the case of an entity, it should not be owned or
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controlled by such persons.
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 Should enjoy good reputation and stature and have the confidence of the local
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 Should have the capability to infer information, perform documentation,

maintain records of accounts and transactions etc.
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 Should have capability to provide social support and guidance to poor and
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marginalized sections.
 Entities should have commitment for social action and capacity building,
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should be non-discriminative secular, non-exploitative, transparent and have

good governance structure.
 Entities should have significant rural/ semi-urban presence.
 The entities should have satisfactory track record and should be able to
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generate funds required for rendering services.
 Entities and individuals should have ability to invest in devices and other
equipment for providing the services.
 Should have ability to retain cash balance at BCA outlet and the balances in
the settlement account on continuous basis.
 All BC Agents will be appointed under a Corporate BC framework and bank

will not enter into any agreement separately with any individual. It is to be
ensured that such BC agents, whether individuals or entities are selected after
proper due diligence by the base branch before recommendation. The
process to be followed for appointing as BC agents is detailed ahead in point
no. 8.

 In respect of appointment of BC agent, preference would be given to

individuals or well-regulated entities.
 All BC agents must be certified by IIBF within nine months of commencement

of operation or 31.03.2020, whichever is earlier.
 Taking into account the recommendations of the Mor Committee, existing

guidelines on appointment of Business Correspondents (BCs) have been
reviewed by RBI vide DBOD.No.BAPD.BC.122 /22.01.009/2013-14 dated
June 24, 2014, as under :
i) Eligible individuals/entities: As per extant instructions, Non-banking
Finance Companies (NBFCs) are not allowed to be appointed as Business
Correspondents (BCs) by banks. It has been decided that banks will be
permitted to engage non-deposit taking NBFCs (NBFCs/ND) as BCs, subject
to the following conditions:
a) It should be ensured that there is no comingling of bank funds and those of
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the NBFC-ND appointed as BC.
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b) There should be a specific contractual arrangement between the bank and
the NBFC-ND to ensure that all possible conflicts of interest are adequately
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taken care of.
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c) Banks should ensure that the NBFC-ND does not adopt any restrictive
practice such as offering savings or remittance functions only to its own
customers and forced bundling of services offered by the NBFC-ND and the
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bank does not take place.

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ii) Distance criteria: As per RBI guideline vides their circular no.
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BOD.No.BAPD.BC.122 /22.01.009/2013-14 June 24, 2014 it is mentioned that

“with a view to providing operational flexibility to banks and in view of the
technological developments in the banking sector, it has been decided to
remove the stipulation regarding distance criteria”.
The distance between the place of business of a BC and the base branch
should ordinarily not exceed 30 Kms in rural, semi-urban and urban areas. In
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metropolitan centres, the distance could be up to 5 Kms.

In case of place of business of BCA is more than 30 Kms in rural, semi-urban
and urban areas, 5 Kms in metropolitan centres, Circle Head may consider
relaxation on merits in respect of under-banked areas.
 The BCA will not undertake identical works of any other banks or organization
within the command area assigned to him by the Bank, while acting on behalf
of Punjab National Bank, i.e. there should not be any conflict of interest
between his being BC of PNB and any other work he in engaged into.
 The individual/entity shall be selected as BC for a period of one year or as per

terms of agreement with Corporate BC. Performance of BC will be reviewed
on quarterly basis in case of BCAs. In case performance of BC agent is not
found satisfactory, their services may be terminated prior to the period of

contract by serving suitable notice by the Bank to CBC. The period of contract
can be further extended, on request from CBC, subject to their satisfactory
performance and review by the Bank and at the exclusive discretion of the
Bank. Circle Head is authorized to appoint and terminate a BC Agent.
 While engaging BC Agents, it must be ensured that the “Guidelines on

Managing Risks and Code of Conduct in Outsourcing of Financial Services by
Banks” issued vide DBR.No.BP.BC.76/21.04.158/2014-15 dated March
11,2015 by Reserve Bank of India and as amended from time to time is duly
followed.
 The Police Verification of the shortlisted BC Agent should be carried out
before engaging and held on record by respective Circle office / base branch.
3.3 Appointment of BC Agents by CBCs :
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a. Corporate BCs of the Bank has to appoint BC Agents at the grass root level
to render the services of Business Correspondents, Bank have to ensure that
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:
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i. The agents appointed by CBCs fulfil all relevant criteria stipulated for BC
in terms of the extant guidelines.
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ii. The CBC carries out proper due diligence in respect of agents to take
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care of the reputational and other risks involved.

iii. The distance criteria, if any, stipulated for BCs from the place of
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business and base branch in rural, semi urban and urban centres should
invariably be fulfilled in case of all sub agents.
iv. BC agents have to mandatorily obtain IIBF certification for BCA in order
to be engaged or continuance of their services as per RBI guidelines.
3.4 Due diligence (regarding appointment of Corporate BC) should involve an
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evaluation of all available information about the service provider, including but
not limited to:
i. Past experience and competence to implement and support the proposed

activity over the contracted period,
ii. Financial soundness and ability to service commitments even under
adverse conditions,
iii. Business reputation and culture, compliance, complaints and outstanding
or potential litigation,
iv. Security and internal control, audit coverage, reporting and monitoring
environment, business continuity management,

v. External factors like political, economic, social and legal environment of the
jurisdiction which the service provider operates and other events that may
impact service performance.
vi. Ensuring due diligence by service provider or its employees.
vii. Due diligence for sub-service providers
viii. Risk Management, framework, alignment to applicable standards on quality
/ security /environment, etc.,
ix. Secure infrastructure facilities
x. Employee training, Knowledge transfer
xi. Reliance on and ability to deal with sub-contractors
xii. The caution list of Indian Bank Association wherever available should be
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verified before entertaining the application of any service providers. Where
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possible independent reviews and market feedback may be obtained. It
should be ensured that information used for due diligence is current and
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not more than 12 months old.
xiii. Due diligence undertaken during the selection process should be
documented and re-performed periodically as part of the monitoring and
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control processes of outsourcing.

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xiv. Over and above this, regular on-site inspection to ensure continuity of
services and managing risk.
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3.5 Adoption of appropriate technology:
Care should be taken to ensure that the solutions developed are:

 Highly secure
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 Amenable to audit
 Follow widely accepted open standards to allow interoperability among the

different systems adopted by different banks.
The Bank may utilize the following available ICT based solution for financial
inclusion:
 MicroATM (Biometric and Card Based)
 Biometric based online transactions through kiosks.
 UPI, IMPS, AePS etc.

Bank will also explore to avail the future technological developments in this area.
However security, confidentiality, integrity, interoperability among the systems
adopted by different banks etc. will be a guiding factor for adoption of ICT based
solution.
4. Area of Operation for BC Agents :
Area of operation of BC agents would be based on the Sub Service Area (SSA)
as decided by the SLBC/LDM. However, non-SSA BC agents appointed by the
Bank out of business considerations would be guided by the business potential of
the area as decided by the Bank.
BC agents may cover adjoining villages and cater to 1000-1500 households

based on the SSA approach. The BC would be linked to Base branch, which
would be nearest branch to his area of operation and would be under direct
control and supervision of the Branch Manager of the Base Branch. The bank
accounts serviced by the agent will have the Base Branch as its Home Branch
and Base Branch should provide pass books to FI customers.
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5. Scope of Activities:
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Deposits:
1. Creating awareness about savings and other products, educating and
advising the rural people for the management of money.
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2. Enrolment of customers - Collection of information about identity, address

and other profile of prospective customers desirous of opening deposit
accounts with Bank, as required under bank’s “Know Your Customers’
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policy”.
3. Opening of all Saving Bank accounts, particularly, BSBD accounts and

other deposit accounts.
Credit:
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1. Collection of information about identity, address and other profile of

prospective customers desirous of availing loan facilities from the Bank, as
required under bank’s “Know Your Customers’ policy” and “Loan
Sanctioning Guidelines”.
2. Identification of prospective borrowers and suitability of the activities.
3. Collection and preliminary processing of loan applications, Field Inspection

including verification of primary information/data.
4. Processing and submission of applications to the bank.
5. Promotion and nurturing Self-Help Groups / Joint Liability

Groups/Credit Groups.

6. Follow-up for recovery.
7. Undertaking debt counselling services in co-ordination with Govt.

Departments/Agencies.
8. CBC/BC may also conduct Entrepreneurship Development Programme

(EDP) followed by assistance in credit linkage in consultation with the
Bank.
Other activities:
In addition to above, the Business Correspondent shall undertake the following

activities:
1. Conduct survey assigned by the Bank from time to time for different
purposes e.g. household survey for financial inclusion.
2. Enrolment, Capturing of Basic data of customers.
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3. Assisting the Bank in KYC compliance/compliance of RBI guidelines on
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KYC by customers.
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4. Liaisoning between Bank & other stake holders.
5. Managing KIOSKs.
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6. On-line receipt and payment of cash against system generated

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receipt through the Kiosk deployed for this purpose.

7. Disbursement of credit through KIOSK.
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8. Recovery of principal/collection of interest.

9. Collection of cheques through base branches.
10. Sale of micro insurance mutual fund products, pension products/any
other financial services approved by the bank.
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11. Receipt and delivery of small value remittances/ and any other services
or products introduced by the Bank for the benefit of the customers.
12. Bharat Bill Payment System(BBPS), Internet KIOSK - IBS services, Rail
Ticket booking, Counselling to Farmers and Villagers.
13. CBC/BC will also be engaged in activities as per direction of bank.
14. BC should explain the usefulness of opening Savings accounts and
features of financial inclusion project and various deposit/loan products
offered by the bank to its customers. The products may be selected
based on the availability of natural resources / local preferences.
15. Each CBC/BC should conduct at least one such counselling meet at the
village level once in a month.

GENERAL
1. CBC/BC may be utilised in identifying farmers/borrowers and be made

responsible for facilitating sanctioning of loans, documentation, disbursement,
end use verification, follow-up, monitoring and recovery.
2. BC will maintain the records such as cash payment/cash receipt register,
account wise receipts/payment register, etc. which will be scrutinized by the
Base Branch Incumbent/officer once in a week. Pre-determined date and time
of visit of Base Branch officer should be displayed in SSAs.
3. Reconciliation of the services/ financial transactions undertaken by BC and
the incentives paid to them shall be done on monthly basis through system
generated MIS. The same shall be directly credited to the account of CBC for
onward payment to BC after deduction of CBC share.
4. Check List for BC- Do’s & Don’ts is placed at Annexure VIII
6. Standard Operating Procedure and Logistics for BCA/CSP
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Corporate BCs will follow following SOP for successful implementation of BCA
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Channel.
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A. Logistics at the BCA outlets:
i. Display of signage as approved by the Bank.

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ii. ID card for BCA to be issued by the CBC, countersigned by Branch Head.
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iii. Ensure availability of required Stationery – Account opening forms, loan

application forms, check lists, publicity materials / pamphlets / job cards for
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banking products.
iv. Display of Phone numbers of Help line, Bank officials (link Branch / CBC
Supervisor /Circle Office)
v. Maintenance of Registers:
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
Records of customers enrolled;
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Account opening forms sent to link branch;
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Account opening forms pending to be sent;
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Customer contact register;
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Applications received and disposals register;
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CBC/Bank officials visit register.
vi. Name of grievance redressal official and contact no. to be displayed.
vii. Ensure provision like box, almirah for safe upkeep of finger print scanner
and other devices and other stationery/ registers.

viii. List of Do’s and Don’ts for customers to be displayed.
B. Image building and trust:
i. BCAs to create awareness about the BC channel among the public.

ii. BCAs to market the banking products and services to the customers.
iii. Arrange mass enrollments to reduce cost.
C. Technical Requirement:
i. Safe upkeep of front end device, viz. Laptop, Desktop, Micro-ATM, etc.
ii. Keeping the device battery charged / in ready mode for providing services.
iii. Maintaining help line number of technology / service provider.
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iv. Downloading the updated versions of the frontend applications.
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v. Reconciling the transactions on daily basis with system generated report.
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vi. Laptop and related equipment like printer, finger print scanner, Handheld
device, etc. should be owned by BCA / Corporate BCs.
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D. Operational Requirement :
i. Approval from the Bank for establishing a BC outlet at any center.

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ii. Standard working hour of all BCs would be from 8 AM to 8 PM for

providing enhanced customer convenience. Access to Kiosk Banking
Solution (KBS) has been restricted according to the above timings.
iii. Account opening would be done through e-KYC only and printout of the
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AOF is to be submitted to base branch at the earliest.

iv. Distribution / delivery of card / passbook / CBS account number to the
customers after account creation in bank’s CBS.
v. Maintaining secrecy about customer account information.

vi. Maintenance of sufficient balance in the BCA settlement account to
support customer transactions and fund settlement with the bank.
vii. Arrange for availability of sufficient cash at BC outlets.
viii. Corporate BC will ensure regular payment of remuneration to the BCA

immediately on receipt of the same from bank.

ix. BCA will ensure issuance of system generated receipt to the customers in
respect of all transactions.
x. CBC/BC to follow the Bank defined dispute resolution mechanism.
xi. CBC/BC will forward any feedback / complaint received from the
customers to the bank.
xii. Adopting proper Risk mitigation process in operations.
xiii. Arranging insurance of Laptops/desktop/Micro-ATM devices at the BCA

outlets.
xiv. In case of temporary / permanent termination of BC at any outlet,
corporate BC to make alternate arrangement to ensure continuity of
banking services to the customers.
E. Legal Requirement:
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i. Persons engaged by Corporate BCs shall not be the employees of the
bank and the bank shall not be responsible in any manner for payment of
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wage remuneration nor for payment of PF, EPF due to such persons.
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ii. Corporate BCs should not in any way convey to the BCs that they can
hope to get jobs with the Bank.
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iii. CBCs will have to enter into an agreement with the bank.
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7. Remuneration and Payment to the CBC/BC:

3
The bank may pay reasonable commission/ fee to the Corporate BC, the rate
and quantum of which may be reviewed periodically. The Corporate BCs will
in turn make payment to BC agents after deducting their share of commission.
The agreement with the CBC would specifically prohibit BC agents from
charging any fee to the customers directly for services rendered by them on
behalf of the bank.
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Commission/ remuneration to be paid to the Corporate BCs will be as per the

agreement.
The commission and incentive structure should be framed in such a way that
the last mile BC earns at least ₹ 5000 if providing a set of services with
minimum volume as defined by the Bank. Sharing of commission between
Corporate BCs and BC agents would be in 20 : 80 ratio.
8. Duties and Responsibilities at various levels :
8.1 Duties and Responsibilities of BC :

i. CBC will ensure that the outlets are manned by reliable and knowledgeable
persons so that the business continuity is maintained.
ii. BC will provide permitted banking services on behalf of the Bank.
iii. BC will visit the household in their area of operation, if required.
iv. BC will maintain a register to keep records of the person contacted with full
details of name, address, date of contact and outcome of the visit. This data
may be used for cross selling of products and should be digitized. Data may
be captured through Kiosk Banking Solution for permanent record.
v. BC will carry with him the stationary items / brochures, etc. relevant to Bank’s
Deposit / loan products and other financial products relating to cross selling.
vi. BC will carry identity card issued by the Bank/CBC and produce the same
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before the customer on demand.
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vii. BC will explain the salient features of the Bank products to the prospective
customers.
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viii. BC will assist the prospective customer for completing the account opening
form / loan application.
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ix. BC will brand his name and code number on every application sourced by
his/her.
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x. BC will verify the primary information / details given by the applicant, will
identify the customer and make recording of his verification/ identification on
the account opening form /loan application form, preferably through e-KYC.
xi. BC will deliver the account opening forms (after accounts are opened by him)
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and loan applications to the identified base/linked branch against

acknowledgement.
xii. BC will accept / disburse cash by undertaking transaction through ICT based
solution.
xiii. BC will issue system generated printout of cash transaction immediately and
mini statement to the card holder on demand.
xiv. BC will ensure that the daily cash withdrawal limit does not exceed the
threshold limit fixed for such accounts by the bank and advise to him from
time to time.

xv. List of Do’s and Don’ts will be displayed by the BC at their outlet and copy to
be provided to the customers along with the account opening form /loan
applications.
xvi. BC will display the bank’s products/banners at their outlets.
xvii. BC is prohibited from charging any fee from the customer directly for services
rendered by them on behalf of the Bank.
xviii. BC will educate customer about terms of sanction of loan, repayment and
recovery.
xix. BCs will handle their responsibilities with care, diligence and sensitivity.
xx. CBC should ensure that their agent (BCA) conduct all financial transaction
online.
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xxi. During recovery procedures, BCs will adhere to Bank’s fair practice code for
lenders. The BCs will refrain from any action that could damage reputation of
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the bank and observe strict customer confidentiality. The BC must provide
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services on behalf of the Bank in a manner befitting the status of Punjab
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National Bank as the most trust worthy and customer oriented Bank of the
country.
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xxii. BC will not resort to intimidation and harassment of any kind, either verbal or
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physical against person in their recovery process.

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xxiii. BC should adhere to the Code of Conduct in letter and spirit failing which
penal provisions including termination of appointment may be imposed.
xxiv. A complaint book will be maintained by the BC at their outlet to enable the
customers to records their complaints, if any
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8.2 Duties and Responsibilities of Base Branch:
i. To publicize the main features of BC facility through leaflets, posters & glow
Sign board in prominent places.
ii. The BC agent should be personally introduced to the members of public by

the bank officials in the presence of village elders and government
functionaries in a public meeting so that there is no
misrepresentation/impersonation.
iii. To develop contacts with NGOs, MFIs, Working Co-operating societies,

community based organizations, well-functioning Panchayats etc. and seek
their help in identifying suitable BC to be appointed through Corporate BC.

iv. To identify potential villages for BC initiatives.
v. To help the Corporate BC in selection of BC by undertaking field visit and

local inquiry to verify the particulars of the BC agent. To help assess the
infrastructure, Equipment, manpower as well as reputation of the applicants.
vi. To maintain a list of BC agents and CBC and their authorized agents attached
to it and to display their names and address prominently in a notice board to
ensure wide publicity of BCs.
vii. To designate a suitable officer (preferably the officer dealing with rural credit)
to deal with the implementation and operation of BC model. The officer will
closely monitor the activities and performance of BCs and bring to the notice
of the branch head the lapses/violation of terms and condition of the BC, if
any. However branch head will also remain equally responsible for proper
monitoring, follow up and supervision of the functions of the BCs of the
Branch.
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viii. To appraise the empanelled BCs about our brand equity, product features,
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KYC norms. our expectations & goals.
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ix. To explain the roles and responsibilities of the BC and to clear their doubts.
x. To supply adequate number of account opening form / loan applications to the

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BCs for their use to receive back completed account opening form along with
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document for compliance for KYC norms/ loan application against proper
receipt.
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xi. To maintain BC wise loan applications received-cum-disposal register.

xii. To ensure compliance of KYC formalities.
xiii. To keep custody of account opening form received from BC.
xiv. To open accounts in respect of account opening forms received from BCs.
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xv. To upload the account opening information to prepaid host/CBS server

through web interface wherever warranted by the process.
xvi. To issue debit cards to the accounts opened through BCs.
xvii. In respect of loan proposal sourced by the BCs, the branches will carry out
pre-sanction Inspection/inspection of the prospective customer's site/assets
etc., will process the proposal and seek clarification from the customer. If
required, branch will sanction the loan as per extant guideline of the bank
within the Discretionary power and convey the sanction to the customer and
BC. Proposals beyond the Discretionary Power will be forwarded by the
branch with necessary recommendation to the concerned Circle office as per
extant guidelines of the Bank.

xviii. To provide support to the BCs for inflow and outflow of cash for operational
purpose.
xix. To watch the performance of accounts brought in by BC and to rate the
agencies on the basis of performance of the account. The assessment shall
include the remoteness of the accounts brought in, the types of the client, the
regularity of the savings /credit usage and repayment, upkeep of records, etc.
xx. Ensuring list of Do's and Don’ts is made available to the customer in
vernacular language.
xxi. To undertake customer awareness and education programme regarding the
BC Models
xxii. To undertake regular visits to outlets of BC to verify books and records of BC
by the Branch Manager or authorized officer and to take necessary steps for
improvement. Keeping record of the same and reporting to controlling offices.
2
These visits should made once every week and visit report as per banks
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format must be filled up and sent to Circle Office. Any adverse feature/act of
BC not in the interest of the bank, must be incorporated in the said report and
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informed to the controlling offices.
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xxiii. To control supervise and exercise monitoring of BC.

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xxiv. All BCs working under a branch should be issued a photo identity card by their
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CBC which is to be counter signed by Branch Manager. The specimen for

photo id card is given in Annexure I-6.1(a). On resignation of BC, branch must
ensure that he/she has surrendered the id card along with all documents, if
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any.
8.3 Displaying Of Sign Boards
The SSAs must have the following signage to depict the working on behalf
of Punjab National Bank.
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a) A sign board for displaying outside the BC Location (Annexure - VII )

b) A sign board for displaying inside the BC location (Annexure - VI)
c) DO’s and DON’Ts at BC locations (Annexure - VIII)
d) Grievance Redressal Officers’ name and contact details.
The Circle Offices and the branches will ensure that proper signboards as per
approved designs are displayed inside and outside of the SSA premises.
8.4 Role of Lead District Managers / District Coordinators

a) The Lead District Managers and District Coordinators in the non lead districts
should be assigned the task of implementation of the FI projects in their
respective districts. They will closely monitor the implementation of the FI

Plan at the district level and provide necessary guidance to the branches.
LDMs and DCOs shall report to the concerned Circle Heads.
b) The LDM will also be responsible for implementation of FIP by all Banks in the
District.
c) To support the LDMs for the financial inclusion activities an Officer shall be
posted at the LDM office.
d) The roles and responsibilities of the FI Coordinators (Annexure - III), LDMs
and DCOs (Annexure – IV) are enclosed.
8.5 Duties and Responsibilities of Circle Office :
i. To prepare Circle level action plan for implementation of financial inclusion by

use of BC.
ii. To prepare and communicate Branch wise business plan for mobilizing
business through BC.
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iii. The pamphlets, posters, banners etc. will be displayed in Base Branches and
the villages under their command area for giving wide publicity to the Financial
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Inclusion campaign of the Bank. The publicity material may be got printed
by Circle Offices in local language as per the norms.
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iv. To review conduct of BCs during Circle Steering Committee Meetings on FI.
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v. To supervise and monitor the performance of BCs.

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vi. To review the performance of the branches under the region for
implementation of BC model and progress of financial inclusion.
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vii. To review and monitor the volume of business generated by BCs.
viii. To look into the functioning of BCs during visit of the official from Circle office
to the branches.
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ix. To oversee the Branch level monitoring mechanism for BCs.
x. To arrange training of BC agents through RSETIs, retired bankers, experts,

specified training institutes, etc.
xi. To execute the agreement with CBCs engaged at the Circle office level if
delegated by Head office.
xii. To review, control, supervise and exercise monitoring of

activities/performance of BCs with the assistance of link branches.
xiii. Other duties as assigned from time to time by head office.

xiv. One officer in the Circle office not below the rank of Scale-IV will be
designated as Nodal Officer for FI to co-ordinate with the branches in the
Circle, NABARD, Government offices, other Banks, etc. regarding
implementation of financial inclusion. The Nodal officer will always be in a
position to furnish branch wise and district wise up-to-date position of financial
inclusion under the Circle.
xv. To undertake audit of BC engaged by them as per banks norms.
xvi. Must ensure at least one banking outlet by way of brick and mortar branch/BC
outlet in the villages allotted by SLBC to the bank. A village can be considered
as covered by a bank only when the village has either a branch or a fixed
location BC outlet or when the village is subject to a visit on pre-defined day
and time by a BC agent or by any other mode such as Mobile Van, etc. for
providing basic banking services.
xvii. In urban locations, also wards, are being allocated and the Circle Offices/
2
Branches are advised to ensure the availability of BC after taking proper
approval from HO:PSFID.
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xviii. Circle Head will constitute a Financial Inclusion Cell (FI Cell) in respective
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Circle offices. The FI cell shall be headed by an officer not below the rank of
scale IV and shall be called Circle Office FI Co-ordinator. The monitoring of
the financial inclusion shall be done by setting up Steering Committees at the
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Circle Office and Zonal Office. Meetings of Steering Committee on FI will be

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conducted at Circle level through participation of Incumbents of the Base

Branches, Corporate BC representatives, Business Correspondents, FI Co-
ordinators, LDMs, etc. on monthly basis to review performance under
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Financial Inclusion. The FI Cells in the circle office shall be responsible for
implementation of FI in their respective circles.
xix. Circle Heads are to specifically visit BC locations and look into the functioning
of BCAs during the course of their periodical visits to the branches.
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xx. FI coordinator will monitor the progress of the FI projects in the Circle who
may also handle the complaints/grievances of the FI customers.
xxi. The progress of all FI projects running in the Circle be closely monitored by
the Circle Head. The progress of basic banking products, i.e. BSBDA,
Overdraft in PMJDY accounts, PMJJBY, PMSBY, APY, etc. by the branches
and BC locations be closely monitored.
xxii. The necessary guidance and support is provided to the Base Branches and
Business Correspondents for managing the FI activities through on-line Kiosk

Banking Solution effectively. Circle Head shall be responsible for the field
level implementation of the FI programme, and for monitoring the performance
of BCs to achieve the goals under Financial Inclusion in his circle.
xxiii. Circle offices are also to ensure that FI Steering Committee Meetings are
conducted every month at Circle office level for effective control and
monitoring purpose. Issues /deficiencies observed in the Visit reports, Circle
Offices to remove deficiency immediately. However, in case any deficiency
which could not be removed should be reported to Zonal Offices by 7th of next
month for necessary action.
8.6 Duties and Responsibilities of Zonal Office:
i. To prepare Zonal level action plan for implementation of financial inclusion by

use of BC.
ii. To prepare and communicate Circle wise business plan for mobilizing
business through BC.
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iii. To sanction/approve appointment of BC agent to be employed by the CBC for
the branches of the Circle under their jurisdiction after checking the eligibility
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criteria and with proper justification and judging its cost and benefit.
iv. To review conduct of Circle/CBC/BC during Zonal Steering Committee

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Meetings on FI at quarterly intervals.

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v. To review the performance of the Circles under their jurisdiction for

implementation of BC model and progress of financial inclusion.
3
vi. To look into the functioning of BCs during visit of the official from Zonal office
to the Circles.
vii. To execute the agreement with CBCs engaged by the bank if delegated by
Head office.
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viii. Other duties as assigned from time to time by head office.
ix. One officer in the Zonal office not below the rank of Scale-IV/V will be
designated as Nodal Officer for FI to co-ordinate with the Circles, NABARD,
Government offices, other Banks, etc. regarding implementation of financial
inclusion. The Nodal officer will always be in a position to furnish Circle wise
and district wise up-to-date position of financial inclusion under the Zone.
x. To undertake audit of BC engaged by them as per banks norms.

xi. In urban locations also, wards are being allocated by SLBC and the Zonal
Offices are advised to ensure the availability of BC after taking proper
approval from HO: PSFID.
xii. Zonal Managers may visit BC locations and look into the functioning of BCAs
during the course of their periodical visits to the Circle offices. Zonal Manager
will constitute a Financial Inclusion Department in respective Zonal offices.
The FI Department shall be headed by an officer not below the rank of scale-
IV/V and shall be called Zonal Office FI Co-ordinator. He will be provided with
adequate manpower. Meetings of Steering Committee on FI will be conducted
at Zonal level through participation of Circle office FI Co-ordinators, Corporate
BC representatives, Business Correspondents, LDMs, HO Representative (in
person or through VC), etc. on quarterly basis to review performance under
Financial Inclusion. The FI Department in the Zonal office shall be responsible
for implementation of FI in their respective Zones.
xiii. Zonal offices to ensure that FI Steering Committee Meetings are conducted
2
every quarter at Zonal Office Level for effective control and monitoring
purpose. Zonal offices to submit the minutes of the Steering Committee
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meetings to HO FID within 10th of next month.
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xiv.Inspecting officials are also advised to check the necessary reports/register to
confirm that visit to BC locations are being done by
Branches/LDMs/DCOs/Circles as per the above directions.
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8.7 Duties and Responsibilities of FI Division:
i. To prepare corporate level action plan for BCs.

3
ii. Act as process and product owner for FI and BC channel products.
iii. To review the Policy and procedures of BC model and suggest to the top
management for any modification, addition/deletion in the same.
06
iv. To issue circular and communication to the Zone, Circle and Branches for
implementation of BC facility.
v. To facilitate selection of Corporate BCs in a transparent manner through

“Request for Proposal” as and when required by bank.
vi. To keep custody of agreement with Corporate BCs and diarising for renewals,
etc.
vii. To monitor and review Zone wise performance of Corporate BCs.

viii. Generation of MIS, collating and forwarding to
Board/RBI/NABARD/Government as the case may be.
ix. Review code of conduct of Corporate BCs.
x. To review the performance of BCs engaged by CBCs and renewal of

agreement.
xi. To co-ordinate with Zonal/Circle offices, related departments of Head Office

for effective implementation of BC model.
xii. Review and re-fixing of threshold business limit at periodic interval.
xiii. To control, supervision and do monitoring of BCs with the assistance of

Zonal/Circle offices.
xiv. To ensure compliance to RBI, NABARD, Government Guidelines and
2
communicate with them.
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xv. To maintain a central record of all engaged BCs.
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xvi. To arrange for audit of Corporate BCs engaged by Head Office.
8.8 Duties and Responsibilities of IT Department:

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I. Selection of appropriate technology as per requirement of HO:PSFID to scale

up financial inclusion efforts with necessary care to ensure that solutions are
highly secure, amenable to audit and follow widely accepted open standards
3
to allow inter-operability among different systems adopted by different banks.
II. Selection of Technology vendor for hardware, software and connectivity under
ICT based financial inclusion involving BC.
III. To select Technology Service Provider through open RFP in a transparent

06
manner.
IV. Signing of Service Level Agreement with technology service provider.
V. Supervision and Monitoring of ICT solution under financial inclusion with BC

Model.
VI. To ensure the preservation and protection of the security and confidentiality of
customer information in custody of possession of BCs under ICT solution.
VII. To ensure appropriate checks and control for technology related operational
risks like failure, fraud, error, etc.

VIII. To maintain uptime of servers and network systems as well as KBS
application for providing uninterrupted customer service by BC.
8.9 KYC Norms :
i. Ensuring compliance of KYC norms is the responsibility of Bank and it cannot

be delegated. The Base Branches have to ensure KYC compliance of the
customers based on the documents submitted along with the applications. In
order to ensure KYC, account opening through BC agents are only through e-
KYC.
ii. Biometric e-KYC based accounts will automatically be deemed KYC verified
without any role form the base branch except collection of account opening
form including consent for the biometric e-KYC verification from the customer.
9. Control, Supervision and Monitoring:
2
A multi-level monitoring and control mechanism, both onsite and offsite is
required to strengthen the system and minimize the inherent risks associated with
:1
the outsourced model of BCA channel.
Offsite supervision measures
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i. Monitoring of daily reports generated by CBS/MIS and checking it with the

relative transactions in the settlement account of BCA is to be done at the
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Base Branches.
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ii. Monitoring the various reports generated from MIS system at Head office
level to review the performance in term of Business and minimum level of
3
service provided to the customers, identify gaps for improvements and

taking action.
iii. Audit and Inspection reports.
Onsite monitoring methods

06
i. Periodic & Surprise field visits and verification of records by Branch

officials, FI coordinator, LDM, CH and other Bank officials at regular
intervals as decided by bank.
ii. Periodic Feedback received from customers and village level officials like
Gram Pradhan, Mukhiya, etc., about the conduct and delivery of services
at the BC outlet. This needs to be recorded in BC visit proforma.
iii. Inspection of registers and records held with the BCA at regular intervals
as decided by bank.
iv. Audit of functioning of BCA as explained in Audit section ahead.
The authorities responsible for monitoring and supervision are :

S. No Level Officer
1 BC Agent Branch Manager / Circle Head
2 Corporate BC Circle Head / Zonal Manager
3 Head of Corporate BCs GM at Head Office
10. Surprise Verification System :
Surprise verification system as a monitoring and supervising tool provides

unbiased, onsite, first-hand information about the functioning of the business unit.
At Branch Level:
I. An official from the branch has to visit the BCA location every week.
II. The Base Branch Manager has to conduct surprise visit at least one BCA
location in every week. This is in addition to the weekly visit conducted by the
2
other designated officers of the Branch.
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III. The Bank shall make surprise verification of the records of BCA in respect of
disbursal of small value credit, recovery of Principal/collection of interest, etc.
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regularly.
IV. Feedback has to be collected from the villagers about the quality of service
rendered by the BCA. In case of any deficiency, proper guidance or corrective
21
measures have to be initiated.

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LDM/Circle Office FI Co-ordinator /Circle Head need to conduct surprise visits

to the BC locations in villages on a random basis.
3
11. Review / Renewal & Period of engagement :
Performance of BCs agents will be reviewed on quarterly basis by the Branch

Head of the base branch and will be put up to Circle Head. While the weekly visits
and surprise verification to the BC outlets would point out the deficiencies and
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guide the BCs for improvement, the quarterly review would recommend for
termination/replacement if no improvement in business as well as service
parameters is observed.
The corporate BCs will be reviewed on yearly basis. Suitable clauses for this must
be incorporated in the Service Level Agreements.
Suitable format for review will be prepared and circulated by FI Division, Head
Office.
The performance indicators for review are given below:
i. Availability of BC for minimum duration of time at the BC outlet.

ii. Business achievement parameters with respect to targets
iii. Recovery of loan in live accounts, NPA accounts and written off accounts
iv. Percentage of NPA in loan sourced by the BC
v. Customer complaints and frauds
vi. Financial awareness and customer education
vii. Upkeep and maintenance of the BC outlet
viii. KYC compliance, document and register maintenance
ix. Attitude and behaviour towards customers and Bank officials
x. Any other reason which in the opinion of the Bank is not conducive to the
continuation of the services of service provider.
The Agreements for Corporate BCs would be valid initially for three years with an
2
extension clause. For technical service providers the agreements may be done as
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per terms of RFP.
12. Agreements :
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An agreement format has been devised by IBA keeping in view the legal aspects
that need to be covered to avoid legal complicacies in the CBC/BC appointment.
21
Agreements will be signed with CBCs at HO level or at Zonal Office level as per
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instructions of Head Office on approval by banks’ board.

3
13. Termination of Agreement :
Specific clause relating to termination will be made part of the said agreement
with Corporate BCs.
14. TECHNOLOGY TO BE USED:

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Bank will decide from time to time the technology to be used by its CBC/BCs.
Our Bank has acquired KIOSK Banking Solution (KBS) technology which is a
web-based solution and facilitates real time on-line transactions at BC locations.
The KIOSK Banking Solution is required to be deployed at all BC outlets to be
managed by CBC/BCA. The KIOSK Banking Solution is integrated with our CBS
system through FI Gateway. The business Correspondents may also use Micro-
ATMs, also known as Hand Held Device for providing better customer service.
15. HARDWARE & SOFTWARE:
15.1 HARDWARE: BCA will be required to own a PC / laptop at the BC location

with latest configuration and internet connection.

Finger Print Scanner: The Finger Print scanner must be STQC certified.
Printer: Standard printers available in market.
Passbook Printer: Recommended PB printer is Epson PLQ20.
The BCA would be required to procure and maintain the required hardware at
his/her own cost. The Bank shall not provide any hardware, cash etc. All
equipments for use at BC locations shall be purchased and maintained by
BCA from their own sources.
15.2 SOFTWARE: The software to be deployed at the BC location shall be

Bank’s software to be accessed by BCA through internet. The device to be used by
the BCA would be configured to work as per the Bank’s on-line system. This would
ensure uniformity of application throughout the Bank.
2
16. Help Desk:
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Bank will set up a help desk to facilitate the field functionaries and details will
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be circulated to the field.
17. CASH MANAGEMENT

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BC Agents to be engaged would use their own cash for funding the FI
transactions, for which they are to be paid a commission on cash turnover
basis and specific service related charges.
3
The entire cash management will be done by BCA/Corporate BC. No cash

management will be done by the Bank. Bank may allow an overdraft limit as
per the prevailing guidelines issued by the Bank.
The responsibility of receiving cash, making payments to customers, and
06
managing the cash would lie with the BCA.

The cash held with BCA and cash in transit will be insured by bank. Bank has
obtained “Insurance of Cash handled by Business Correspondent
Agents” covering cash in premises and transit along with standard perils up
to Rs. 1 Lac. All other risks are to be covered by BCAs.
Surprise checking of transactions done by BCA has to be made by the

officials from Base Branch, officials from CO, LDM and auditors to ensure that
system generated receipts are invariably being provided to customers in
respect of all transactions.

18. SETTLEMENT/ ACCOUNTING
To undertake cash transactions, the BCA is required to open Current Account

under scheme code CABCA (Zero balance and no charges), which will be a
Settlement Account, with the base branch which is to be funded by the BCA
with his available cash (credit balance). All transactions at BC locations will
be routed through this account.
FI transactions to be undertaken by the BCA would be reflected in the Bank’s

systems as under:
Where the customer deposits cash:

Dr. BCA’s Settlement account
Cr. Customer’s account
Where customer withdraws cash:

Dr. Customer’s account
2
Cr. BCA’s Settlement account.
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This process of real-time settlement ensures automatic reconciliation of each
cash transaction. 15
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19. Mode of Payment of Remuneration/ Commission to BC

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Payments (remuneration/ commission, etc.) will be calculated by the System for

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transactions/account opening in system for the particular month. Commission

report will be generated by system and shared with CBC/Circle offices. Corporate
BC will raise invoice based on the system generated report. Circle Offices are
3
required to make payment to CBCs within 15th of next month on the basis
of invoices by crediting entire amount to Corporate BC’s central accounts after
deduction of taxes, if any. The Circle Head and AGM at Circle Office have full
powers for making payments. Circle Heads to ensure that payments to Corporate
BCs are made within 15th of next month (in any case, not later than 21st of next
06
month) in respect of transactions made in the earlier month. Corporate BCs will
pass on payment to BCAs as per distribution ratio within three working days of
receipt of payment from Circle Office. Any delay in receipt of payment to BC
Agent, if noticed, will be taken up with the CBC.
20. Cost of BC device and other infrastructure :
In terms of RBI circular no. DBOD.No.BL.BC.63/22.01.009/2009-10 dated

November 30, 2009, Banks may bear the initial set up cost of the BCs and extend
a handholding support to the BCs, at least during the initial stages.
Bank may consider providing Hand Held Terminals or any other device to BC for
better service and door step banking facilities. The same may be got approved by
competent authority.

21. Financial education and Consumer protection:
It is the responsibility of the Bank to take proactive steps as below to ensure that
disputes are kept at minimum:
i. Bank will educate its clientele in their respective vernacular language

regarding the benefits of banking habits. For this purpose, extending
necessary financial support from the Financial Inclusion Fund administered by
NABARD may be considered.
ii. Sufficient publicity will be given regarding the appointment of BC and the
outlet/agent by holding meeting in the villages and/or through notification
published in the local newspapers in the regional languages. In addition,
notices may also be displayed in the village panchayat office and the base
branch. Similarly, in case of removal/replacement of a particular BC, bank will
give required publicity for the same in order to rule out malpractice/fraud by
the removed/replaced person.
:1 2
iii. Information regarding BCs engaged by Banks will be placed on the Banks
website. 15
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iv. The annual report of the Bank will also include the progress in respect of
extending banking services through the BC model and the initiatives taken by
Banks in this regard.
21
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v. Bank will take necessary measures to ensure the preservation and protection
of the security and confidentiality of the customer information in the custody or
possession of the BCs.
3
vi. Bank will educate the customers through various point and electronic media
about the care to be exercised by them when transacting at the BC outlet, the
role of the BC and obligation towards the customers in vernacular language.
vii. A complete list of Do’s and Don’ts relating to their actions with BCs in the local
06
language will be explained to the customers at the village level meetings to be

held by the branches.
viii. Prominent signage will be displayed at the location of the BC indicating clearly
the name, designation and telephone number of the contact person in the
Bank in case of complaints/disputes. Such details will also be made available
at the village panchayat office.
ix. Bank will put in place appropriate grievance redressal mechanism.
22. Grievance Redressal Mechanism:
The grievances of the customers with regard to services provided by the Business
Correspondents shall be redressed properly without delays as per the existing
grievance redressal mechanism of the Bank which has been well publicized

through notices displayed in branches/offices and placed on Bank’s website
prescribing time schedule for redressal of grievances given below.
 7 days at Branch level, 15 days at Circle office level, 20 days at Zonal

office level, 24 days at Head office level.
 In addition, the customer can also lodge their complaints at care@pnb.co.in

and at call centre numbers as per customer grievances redressal policy of
the Bank.
If the complainant does not get satisfactory response from the Bank within 30
days from the date of his lodging the complaint, he will have the option to
approach the office of the Banking Ombudsman concerned for redressal of his
grievance/s.
23. Insurance:
i. Fidelity Insurance: Fidelity insurance covers losses caused by dishonest
2
deeds of the BCAs. Though for any dishonest deeds of the agent the
corporate BCs will be held responsible and any losses to Bank and customer
:1
will be recovered from their payouts but it is recommended that Corporate
BCs will obtain the fidelity insurance cover on their agents and a copy of the
15
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policy has to be submitted to the Bank.
ii. Insurance on cash: BCA are required to receive/carry/store and travel with
21
cash in their normal business activity. Bank has obtained an insurance policy
/06 26
for cash amounting to Rs. 1.00 Lac covering all the risks for cash transit and
holding. Annual renewal of the said policy will be undertaken by bank.
3
24. Fraud and Embezzlements:
Immediately on detection of any fraud or embezzlement, the concerned Circle

Office will be informed by the Branches. A detailed report after investigation by
the Circle office will be submitted to concerned Corporate BC and amount
recovered from CBCs at the earliest.
06
25. Confidentiality and Secrecy:
Maintenance of confidentiality and secrecy of the customer information in the

custody of BC is of paramount importance. Confidentiality and Non-disclosure
agreement will invariably be part of Service Level Agreements. The monitoring
authorities have to keep a close watch to prevent any action which may hamper or
dilute maintenance of secrecy of customer information. Following measures may
be taken to protect confidentiality and secrecy of customer information.
i Access to the customer information by the BCA will be limited to

specified fields required to perform the outsourced function.

ii The BCA will not be able to isolate and clearly identify the Bank’s
customer information, documents, record and assets to protect the
confidentiality of the information.
iii The Bank shall have the right to review and monitor the practices and
control processes of the BCA on a regular basis.
iv The minor breaches if any shall be brought to the notice of the BCA for
immediate correction. Any major breach will make the BCA liable for
termination of the agreement and payment of penalty.
v Any loss/damage caused to the customer due to breach of
confidentiality/secrecy by the BCA may render the Bank liable for
damages and the Bank will be authorized to recover the loss/take
appropriate action against the CBC/BCA.
26. Identity cards:
Photo Identity Cards shall be provided to the BC agents. This would be issued
2
by the CBC and countersigned by base Branch Head.
:1
Each BCA is issued with Kiosk Operator Code (Unique identity number known
as KO Code) and the same will be used in the identity cards as well. On
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demitting the job, the BCA has to surrender identity card to the Base Branch
or CBC. Branch Incumbent must ensure that the card be obtained from the
BC agent and either destroyed/kept in custody of branch as document.
21
Specimen of identity card for BCA is attached as Annexure-V.

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27. Infrastructure:
3
Location and Office

The BCA outlet may be established at the residence of the BCA or at any
other convenient location owned or leased for that purpose by the BCA.
Signboards
06
All BC outlets will be distinguished with a sign board with Bank’s Name and
Logo. Displays showing name of BCA, Name of Base Branch, working hours
(Annexure VI & VII), fees for all services available at the outlet, escalation
matrix for grievance redressal mechanism with telephone numbers, and the
address and phone number of Banking Ombudsman will be available. Bank’s
name will be in trilingual and all other displays will be in the regional language.
Specimen of Grievance Escalation Matrix are given in Annexure I.
Access
Public will have access to the BC outlet for availing services and there will not
be any discrimination based on gender, caste, creed or social stratum.

Infrastructure Facilities
It is desirable that minimum facilities, such as a table, chairs, drinking water
facility, etc. would be made available at the BC outlet by the BC agent.
Information on Bank’s products & services
Bank’s leaflets, pamphlets, brochures, flyers and banners about products and
services are to be provided to BCA by the Branch for displaying at the outlet.
Working Hours
Working hour of BC agents may be controlled through system by allowing
login of BC within a specified time span only. Usually system will allow a BC
agents to work from 8AM to 8PM. The timings can be modified by system
administrator at HO level.
BCA would be encouraged to provide services from 8 AM to 8 PM as some
time is lost during the day for arranging the physical cash from the base
branch or other sources.
2
In any case, minimum hours and days of services has to be ensured at a BC
:1
outlet to be called as full time BC outlet as per the guidelines issued by RBI
vide its circular no. DBR No.BAPD.BC.69/22.01.001/2016-17 dated 18th May
15
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2017.
Leave of absence of BCA – Concept of Sub-BCA
21
Any BC location would mandatorily be functional on all days of operation of

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the Base Branch. The BCA shall be entitled to a leave gap arrangement for a
period of maximum 15 days in a month. In order to get the same approved a
process for approval of sub-BCA has to be got done through Circle Office. As
3
per the said process a person would be nominated by the BCA as his
substitute. A related agreement would be executed by BCA and Sub-BCA and
deposited to Circle Office regarding the same and Circle office will create Sub-
BCA user who will use the same settlement account as the original BCA. After
the process of creation of Sub-BCA is complete, BCA may delegate his work
06
to his sub-BCA for a period not more than 15 days in a month. If the BCA logs
in within the period of 15 days, the sub-BCA is automatically disabled.
28. Risk and Risk Mitigation:
The engagement of BC by the Bank to carry out financial transactions and

other Financial Inclusion activities on behalf of the Bank exposes the Bank to
various risks. The Bank is exposed to liabilities on acts of commission and
omission by the BC. Therefore, risk identification, assessment, monitoring and
mitigation techniques are necessary. Different types of risks as per Bank’s
outsourcing policy and their mitigations techniques are given below.
S.No Risk Risk Mitigation

1 Strategy Risk: The Provide sufficient publicity among the public

service provider may about the delegated duties of BC, so that
conduct business on its public will refrain from dealing with BC in
own behalf, which is inconsistent way.
inconsistent with the This may be done by ensuring putting list of
overall strategic goal of available services and products at each BC
the Bank. outlet and at Branch also. Do’s and Don’ts for
customer while dealing with BC would also be
displayed at BC outlets and base branches.
The agreement would include the stipulation
that they shall not conduct any
banking/financial activities on their own behalf
or any other inconsistent activity or
misrepresent the Bank.
Reputation Risk: Poor A strong feedback structure in required. The
service from the service base branch officials would independently
provider, its customer interact with the public to get the unbiased
interaction not being feedback about the activities and services
2
consistent with the overall rendered by BC as mentioned in surprise
2 standards of the Bank. verification mechanism.
:1
Proper training shall be given to the BC by
15Corporate BC before appointment. A code of
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conduct for responsibilities of BCs including
adherence to banks fair practice code to be
signed BCs.
21
Compliance Risk: In case of breach of prudential laws, the

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Privacy, consumer and individual and corporate BC may be

prudential laws not penalized or blacklisted. This would be part of
adequately complied with. the Service Level Agreement signed with the
3
Corporate BC.
The compliance to system/control
3
requirement shall be ensured by the authority
approving engagement of the individual and
corporate BC.
The activities of BC, Corporate BC, would be
06
audited periodically through our internal

auditors or specialized external auditors.
Operational Risk: Arising HO:ITD will ensure setting up of Disaster
due to technology failure, Recovery systems/plans and must ensure
fraud, error, inadequate business continuity.
financial capacity to fulfill CBC or its agents selected would not be
obligations and/or provide defaulter of any other Bank/Branch. The
4 remedies. financial soundness of the BC shall be
ensured at the time of engagement.
Fidelity clause would be incorporated in the
Service Level Agreements and CBC would be
mandated to obtain fidelity insurance
coverage.

Legal Risk : Includes but Sufficient monitoring and supervision
is not limited to exposure mechanism would be in place to avert any
to fines, penalties, or such acts of the service provider.
punitive damages Any loss arising from any such penalties,
5 resulting from supervisory fines etc. due to acts of service provider,
actions, as well as private service provider would be liable to make good
settlements due to the loss.
Omissions & commissions
of the service provider.
Exit Strategy Risk: This The role of BCs are not highly technical and
could arise from over- does not require high level of expertise or
reliance on one firm, the skills. Their replacement can be made in a
loss of relevant skills in time bound manner. Standby arrangement to
the bank itself preventing serve the customers would be available at
6 it from bringing the activity Branches.
back in-house and
contracts entered into However, unplanned exit of Corporate BC
2
wherein speedy exits may pose operational risk therefore Suitable
would be prohibitively exit clauses would be built in the SLA to
:1
expensive. protect Bank’s interest.
Counter party Risk: Due BCs may only be used for sourcing,
15
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to inappropriate verification of documents and related work as
7
underwriting or credit defined relating to loans.
assessments.
21
Country Risk: Due to Not Applicable

/06 26
political, social or legal

8
climate creating added
risk.
3
Contractual Risk: Arising The contractual capacity of the CBC shall be

from whether or not the ensured through due diligence check. A
9
bank has the ability to strong monitoring mechanism would be built
enforce the contract. in to enforce the contract.
Concentration & BCs work would be monitored and audited
systemic Risk: Due to regularly as mentioned in specific sections of
06
lack of control of individual this policy.

banks over a service Bank shall distribute the business into many
provider, more so when service providers to avert concentration and
overall banking industry systemic risk.
has considerable The exposure limit for business developed
10 exposure to one service by a Corporate BC would not be more
provider. than 50% of the total business developed
by the CBCs collectively. The exposure
limit may be reviewed periodically on the
basis of business developed through
correspondents collectively.
The portfolio developed through the BCs may
be segregated as easily identifiable in the

Bank’s CBS/MIS system for supervision,
monitoring and statistical compilations.
29. Business Continuity and Disaster Recovery Plan:

Sub-BCA concept has been developed keeping in view the Business Continuity
Plan and leave gap arrangement for BCA. Sub-BCA will be responsible for
providing service in the absence of BCA.
Transactions done by BCA is strictly online and real time in nature through CBS
or ATM Switch, hence backup of data is maintained at CBS or FI Gateway level
maintained by HO: ITD. Disaster Recovery Plan is also being maintained through
DRS site at Belapur, Navi Mumbai by HO: ITD.
30. Audit
Audit is necessary to ensure compliance to systems and procedures, and to
sense warning signals about weak links. This is an effective supervisory and
monitoring tool for risk mitigation.
2
The BC activities in the field have to be audited periodically. Branch audit would
:1
include the audit of FI activities and the internal auditor would visit the BC
locations. The system audit of FI Gateway and application would preferably be
15
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done by a specialist system auditor covering all operation as well as technical
aspects of the functioning.
Considering the perpetuity of operations through FI channel, audit would be an
21
ongoing process piggybacked to routine internal audits of the branches.

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Indicative scope of audit is given below:

Branch Level Activities:
3
i. Whether copies of Police verification report of BCA are held on record.

These will be kept at Circle office level as Circle offices create BCs, but
copy of the documents would also be kept at branch level.
ii. Comment on Nature of Transactions in settlement account of BCA. No

06
transaction, other than those pertaining to customer transactions, is

permitted to be routed through that account except cash deposited and
withdrawn by BCA for his own cash in hand. Instances of any
transactions other than those permitted and action taken by the Branch
to be commented upon.
iii. Comment on prescribed records /registers maintenance by BCA -

Maintenance of registers and records on enrolments made, daily
transactions and other services provided.
iv. Accounts opened in CBS and monitoring of these accounts

v. Visit by the Branch Officials / LDMs / Circle Office representatives
/auditors to villages and feedback, grievance redressing mechanism,
etc. and the registers thereof.
vi. Periodic Meeting with Corporate BC/ BCA with the Branch/LDM/CO
and the register of minutes.
BCA level:
i. Whether BCA is a resident of the village/SSA in which he is functioning.
ii. Age of the BCA. (would not be more than 60 years on the date of initial
appointment and would not continue beyond 65 years of age)
iii. If his age is more than 60 years, whether his competency is being
reviewed by the CBC every Year.
iv. Whether BCA is following the prescribed systems & procedures for
2
enrolment and opening of accounts as per norms?
:1
v. Whether the BCA is working as per the laid down norms narrated in the
BCA policy?
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vi. Whether hard copy of the account opening form and KYC details
collected are safely handed over to the branch?
21
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vii. Whether BCA has filled in all the columns in the account opening form?
viii. Comments on functioning of BCA in identification & facilitating in

3
opening of accounts?
ix. Whether the BCA has done transactions on all working days. In case of
no transaction on any working day, its reason.
x. Whether sign Boards displayed indicating the name of the Bank, name
06
of BCA, Phone numbers, timing of BC outlet operation, charges

applicable for services, grievance redressing mechanism, address of
ombudsman and rates of interest.
xi. Comments on maintenance and functioning of Micro-ATM and security

features like auto lock/ auto logout.
xii. Brief of publicity and awareness campaigns carried out by Branch/CO

in the villages along with the BCA.
xiii. Comment on efforts at imparting financial literacy.
xiv. Discreet Market report on the functioning of BCA.

xv. Any other observation of relevance on the functioning of BCA.
Circle Office Level:

i. Activities of FI Cell/FI Nodal officer at Circle Office and its effectiveness
in monitoring.
ii. No. of meetings with BCA and Corporate BCs.
iii. Position of Monthly Review of CBCs/BC agents and action taken

thereof.
iv. Performance of FI Business parameters like growth in FI deposits,

Customer base, PMJDY products, FI credit portfolio, etc.
v. Timely payment of bills and its conformity with the invoice raised and
SLA executed with the Corporate BC.
2
31. Training and Capacity Building:
:1
After selection, the field BC has to be trained to equip him to perform his duties
15
effectively. Technical and functional/product training will be provided by
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Corporate BC. Base Branch Manager has to mentor and hand-hold the BCA in
banking principles and practices, and about banks products.
21
BC agents have to mandatorily obtain IIBF certification for BCA in order to be

/06 26
engaged or continuance of their services as per RBI guidelines. CBC would

ensure classroom training to enable the BCA to clear the IIBF certification
examination.
3
Corporate BCs must ensure that apart from IIBF certification BCA is trained about
the Bank, its product and policies. Indicative list of training topics is given below:
First phase of the training programme would include:
i. Introduction to Banking Services
06
ii. General Banking including deposits
iii. Principles of Lending with special focus of Rural and Retail lending
iv. Introduction to Financial Inclusion
v. Role of BCs
vi. Profile of the Bank.
vii. Products and services of the Bank which would be made available through
BC Channel.
viii. Process flow and customer grievance related to products and services.

ix. Filling up application forms and taking requests from the customer
x. Cash Handling and Security measures.
xi. Reconciliation and maintenance of cash register.
xii. Record keeping and maintaining confidentiality and secrecy of the

customer data.
Second Phase of training programme shall focus more on following topics :

i. Attitudinal Enhancement for becoming customer centric and service
friendly
ii. Customer Query handling
iii. Customer Relationship Management
Apart from the above, BC agent would be trained by the CBC on the operation
and maintenance of Hand Held device/Micro ATM devices and other equipment.
:1 2
Periodic meeting of the BC agents would be called at the base branch every
month. Such meetings may be called at the District/Regional level on quarterly
15
interval also to discuss about products, bottlenecks, targets, achievements,
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customer feedback, etc.

32. Service charges to be levied from the customers by Bank:
21
/06 26
RBI vide circular no. DBOD.No.BL.BC.63/22.01.009/2009-10 dated 30th

November 2009 permitted Banks to collect reasonable service charges from
customers in a transparent manner under a Board-approved policy. Considering
3
the profile of the clientele to whom banking services are being delivered through
the BC model, banks were advised to ensure that the service charges/fees
collected from the customer for delivery of banking services through the BC model
is not only fair and reasonable but also seen to be so.
FI department and other owner departments for the product and services offered
06
through BCAs will be circulating service charges from time to time after obtaining
approval from the competent authority. Any charges imposed on the customer will
be guided by RBI/NPCI/UIDAI guidelines.
33. Other conditions
i. FI/BC Customer will always have freedom to use branch banking facilities
even though the Business Correspondent are available in their locality.
Similarly the Branch customer would also be eligible to use the services of
any BCA of the Bank. The BCA channel will function like an Additional
Delivery Channel.

ii. All agreements/contracts with customer would clearly mention that the bank
is responsible to the customer for acts of omission and commission by the
BCs.
34. Arrangement with Existing Service Providers:
The terms and conditions entered with the existing service providers (CBCs) will
continue till the expiry of their arrangement and suitable amendments as per the
policy will be made during the review/revision of their agreements.
35. Adoption of Micro-Credit scheme through JLGs (by sourcing through BC

agents)
Bank will adopt Micro-credit scheme for lending through Joint Liability Groups
(JLGs). Basic flow for such lending will be as under:
Selection of Members: Select 5-7 individuals known to BC with respect to
2
residence, activity and non-default.
:1
Counselling: BC will explain the purpose of formation of group & responsibility
of each member towards repayment of loan individually and by other member
15
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also. BC will also educate members to make monthly contribution to group
account for creation of Group Corpus for future use. He will also educate them to
maintain proper Minute Book and Cash Book.
21
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Selection of Group Leader: Most active member of the group will be selected
as group leader.
3
Opening of Group Account: BC will bring the group members to the Branch for
opening of SB account in the name of the Group. (Optional)
Opening of Savings Account of Members: Normally only existing customers

would be eligible for becoming members of the group but if any other person
allowed then BC will open his/her account following Bank’s Guidelines.
06
Application for Loan: BC will provide and help the members of the group to
correctly fill the Loan application form.
Due Diligence and Appraisal: BC will do proper due diligence along with his
supervisor/Area Manager to properly assess the identity, economic activity and
credit worthiness of the group member. He will also do appraisal and scoring as
per the format given by the Bank which will be verified by his/her Area Manager.
Application Flow through BC: BC will input the loan Application Data in the
Loan Module present in his/her KBS application and forward it to his Area
Manager. Area Manager will do due diligence at his end and also take a view of
the colour codes generated by the system based on Credit Information
Companies(CIC) Report before sending it to Branch Manager. The CIC report

generation happens automatically when BC agent sends the data to his/her
area manager.
Appraisal and Sanction by the Branch Manager: Branch Manager will be

provided with specific login IDs to access the system through Finacle PC.
Branch Manager can see the proposals pending under him after login into the
system. Hard Copy of the application cum appraisal form and other related
documents is also submitted in the Branch by the BC agent. Branch Head or
officer handling the advance section would visit the group and complete the
appraisal. If satisfied loan is sanctioned by the Branch Manager.
Delivery of Sanction Letter and explaining Terms & Conditions: Once the
Branch Manager sanctions the loan proposal using KBS Portal, BC will ensure
delivery of sanction letter to each group member and acceptance of terms and
conditions of the loan by the members. Loan accounts are opened
automatically through back-end process without any interference of
Branch.
2
Help in Documentation: BC will help the branch and members in Loan
:1
Documentation.
15
Loan Disbursement: BC will maintain close contact with Branch Manager for
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disbursement of loan according to the need by crediting the savings account of

the group member.
21
Loan Utilization: BC will keep close monitoring of JLG borrowers to ensure

/06 26
proper utilization of the loan amount.
Repayment Collection: BC will follow up with each member and remind them
3
about repayment schedule and collect the weekly instalment without fail. The
Equated Weekly Instalment (EWI) is collected and credited in the loan
account by the BC agent though his Hand Held Device or Kiosk Portal.
36. Technology aided Micro Credit through BC agents in MFI model:

06
1. Proposal under the Scheme will be sourced by the BC agents from the area
allotted to them. After sourcing the proposal BC agent will make data entry in the
front end portal & also perform E-kyc of the customer.
2. Once the application is sourced BC will do initial appraisal and credit

information companies check based on the KYC and other documents submitted
by the customer, through a system based application. He will also undertake
Customer Verification by visiting the customer’s residence and work place and
submit report in system.
3. Field Supervisor of CBC will do further scrutiny and verification of the

documents.

4. Once the application is cleared from Field supervisor level, Cluster Head of
CBC will do final appraisal and if satisfied of the credit worthiness of the
customer forwards the proposal to Branch Manager through system. He also
undertakes random customer residence and business place verification visit.
5. Base Branch will verify the inputs provided by the CBC/BC utilizing the online
application portal through Finacle PC. Branch Manager will also verify the
external Credit Bureau Ratings provided by CICs and undertake verification of
identity, residence and activities of the prospective borrowers.
6. Once the branch manager is satisfied after the pre sanction inspection and
due diligence conducted by him/her, he/she will approve the loan using the
portal with prior information to CBC team and the borrower for completing the
documentation.
7. Once approved loan account will be automatically opened in CBS in T+2

days. The Branch has to ensure that all other parameters like sector code,
subsector code, etc.(V details) entered in the CBS system are correct.
:1 2
8. After ensuring all parameters have been properly entered in the system, the
Branch will disburse the loan debiting customer’s loan account.
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9. Recovery of loans will be done through Standing Instructions linked to

savings account of the borrower. In case of default by any borrower on any
scheduled day of depositing EMI, CBC/BC team would visit the borrower in
21
person and collect the EMI.

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10. CO & ZO team would be provided with a live dashboard showing the data of
Branches and Regions for monitoring purposes. It would provide Branch wise
3
and regions wise position of Pending/Sanctioned/Rejected loans along with brief

information about individual proposals. A separate report on Asset quality would
also be provided on daily basis for monitoring of the portfolio.
06

Annexure-I
Grievance Escalation Matrix

S. No Level Officer in charge
All complaints/
grievances Base Branch Manager
01 of FI customers first to be Phone Number :
addressed to Email :
If not satisfied with the reply/action taken by the above, they can escalate the matter
to :
Circle Head, with contact details

02 Circle Office Phone Number :
:1 2
Email :
AGM (FI, Coordinator) Zonal Office, with contact
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details
03 Zonal Office Phone Number :
21
Email :
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AGM-PS&FI Division, Head Office, Delhi

3
04 Head Office Phone No :

Email :
06

Annexure – II
CHECK LIST FOR BUSINESS

CORRESPONDENTS
DO'S
1. The BC should identify customers with strict adherence to KYC norms.
2. BC should encompass clients irrespective of class, creed and religion and its
activities should be available to all eligible citizens of India.
3. Should maintain customer confidentiality.
4. Should posses knowledge of local area & language.
5. The BC should enter into an MOU with the bank and all the terms and
conditions of - the Agreement should be strictly complied with.
2
6. BC should be able to isolate and clearly identify the Bank's customer
:1
information, documents, records and assets to protect the confidentiality of the
information. 15
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7. System generated on-line receipt shall be issued to the customer invariably
for all transactions carried out by him/ her on behalf of the Bank.
21
DON'Ts
/06 26
1. The BC should not collect any service charges directly or indirectly from the
customers.
3
2. The BC is not vested with any powers for sanction of any loan.
3. There should not be any exploitation of ill informed poor people.
4. Should not give any scope for customer complaints and grievances affecting
the image of the bank.
06
5. Should not be affiliated to any political/ religious organizations.

6. There should not be any criminal record/adverse reports.
7. Should not use any sub contracts unless and otherwise stipulated in the
agreement.
8. Should not resort to intimidation or harassment of any kind either physical or
verbal against any person in their debt collection efforts.

Annexure - III
ROLE OF FINANCIAL INCLUSION COORDINATORS (Chief Manager/Asst.

General Manager) IN CIRCLE OFFICE/ ZONAL OFFICE
1. Financial Inclusion Coordinators (FICs) at COs/ FGMOs are

responsible for all financial inclusion projects and related areas in their
Circles/FGMOs. They shall also be responsible for meeting targets
allocated to the Circle/FGMOs under Financial Inclusion.
2. To coordinate with Financial Inclusion Division, HO for all FI related
matters.
3. To monitor activities of Vendors, BC, etc. working in their Circles
through LDMs/DCOs.
4. Should review the performance of the Base Branches once in a month.
Necessary guidance and support can be provided to the base
2
branches for managing the FI activity effectively.
5. To monitor the quality and the level of services extended by the BC
:1
operators.
6. A close monitoring of the implementation of the FI projects is to be
15
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done. They should specifically look into the functioning of BCs during
their periodical visits to the branches and the field.
7. To contact the local Government Departments for executing NREGA
21
and other social security payments/ Government benefits schemes

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through BC network.
8. Progress of all the products/facilities provided regarding financial
inclusion like savings, small overdraft, GCC/KCC, insurance, loan,
3
remittance products. etc. by the LDMs and DCOs is to be closely

monitored for achieving the targets allocated to the Circle/FGMOs by
HO.
9. To identify problems/bottlenecks in implementing the financial inclusion
initiatives/ pilot projects, opening of the BSBDA Accounts/flow of
credit/infrastructure inputs, etc. and initiate necessary steps to
06
overcome them.
10. A periodic evaluation of ground level implementation of various FI
Schemes and benefits accruing there under to the identified
beneficiaries is to be done.
11. Monitoring of Financial Literacy cum Credit Counseling Centers
(FLCCs) in their lead districts is to be done for facilitating financial
education and Financial Literacy activities.
12. FICs in consultation with LDMs/DCOs, may chalk out a programme
with definite time frame for carrying out publicity and awareness
campaign on the objective of Financial Inclusion Initiatives.
------0------

Annexure - IV
ROLE OF LEAD DISTRICT MANAGERS / DISTRICT COORDINATORS IN NON

LEAD DISTRICTS
a. LDMs & DCOs are to act as Financial Inclusion Coordinators for

attending to financial inclusion related areas and projects in their
respective districts.
b. They have to report to FI Coordinators in the Circle Office.
c. To coordinate with Vendors, BC, etc. working in their districts.
d. To review the performance of the Base Branches once in a month.
Necessary guidance and support can be provided to the base
branches for managing the FI activity effectively.
e. LDMs & DCOs have to monitor the quality and the level of services
extended by the BC operators
2
f. They are to contact the local Government Departments for executing
NREGA and other social security payments/ Government benefits
:1
schemes through DBT/DBTL under Bank’s Financial Inclusion initiative.
g. BCs are to be identified and recommended to FI Coordinators.
15
/20 342
h. Progress of all the products/facilities provided regarding financial
inclusion like issuance of smart cards, savings, small overdraft, GCCs,
insurance, loan, remittance products. etc. by the branches be closely
21
monitored and targets allocated to the Circles by HO should be got

/06 26
achieved.
i. LDMs & DCOs have to identify problems/bottlenecks in implementing
the financial inclusion initiatives/ pilot projects (opening of the No Frill
3
Accounts/flow of credit /infrastructure inputs, etc. and initiate necessary

steps to overcome them.
j. Taking up the FI issues at the District level Forum and ensuring proper
follow up thereof including security arrangements, lack of infrastructure
support, etc.
k. A periodic evaluation of ground level implementation of various FI
06
Schemes and benefits accruing there under to the identified

beneficiaries may be done.
l. LDMs & DCOs have to chalk out a programme with definite time frame
for carrying out publicity and awareness campaign on the objective of
Financial Inclusion Initiatives.
m. They have to monitor the compliance of KYC norms by branches / BC
agents.

Annexure - V
SPECIMEN OF IDENTITY CARD TO BE ISSUED TO BC AGENT
Photo
Name of Sub Service Area:
Under BO: (Branch Distinctive No.: )
District: Circle Office: State :
2
Name of Business Correspondent Agent :
:1
Mr. / Ms. KIOSK Operator Code No. :
15
/20 342
Father’s Name:
Address of BC Agent:
21
/06 26
Village : Post Office : Police Station:
Block : Tehsil : District :

3
Signatures of the BC Agent

Mobile No.
Name of SCA /Corporate BC/ Existing TSP/BC / Circle Office:
Signatures of Authorized Official (SCA/Corp BC/Existing TSP &BC / Circle Office) (With Seal)
Name: Designation:
06
Date of Issue :
Counter signed / Attested by

Signatures of the Base Branch Manager
Name: Designation:
(With seal)
(The card should be laminated)

Annexure - VI
:1 2
15
/20 342
21
/06 26
3
06

Annexure – VII
:1 2
15
/20 342
21
/06 26
3
06

Annexure - VIII
:1 2
15
/20 342
21
/06 26
3
06


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HO: Priority Sector & Financial Inclusion Division (Financial Inclusion Department)

All concerned are advised to ensure meticulous compliance of policy guidelines.

Encl : Policy for Business Correspondents

Division : Priority Sector & Financial

“strictly for internal 1 Policy on Business

Policy Contact hofid@pnb.co.in

Policy Version Control

S. No. Version Number Version Date

1 2021_PSFID_1.0 23 March 2021

Last reviewed on 25.03.2020

Approval Path ORMC > RMC > BOARD

Supersedes Circular No. HO/FID/ 03/2020 dated 25.03.2020

“strictly for internal 2 Policy on Business

26 Fraud and Embezzlements 34

27 Confidentiality and Secrecy 34

30 Risk and Risk Mitigation 36

37 Adoption of Micro-Credit scheme through JLGs (by sourcing through BC 42

“strictly for internal 3 Policy on Business

Executive Committee in its meeting dated 05.12.2013 had approved deployment of

Ministry of Finance (MOF), Govt. of India (GOI).

Technology to be used, accounting of transactions, Audit and grievance redressal

“strictly for internal 4 Policy on Business

Guidelines on Financial Inclusion using BC Model

The outsourced model of Business Correspondents compliments the existing

1000-1500 households. The gist of the guidelines is as under:

“Each SSA is required to be covered by Branch/ Business Correspondent Agents.

continued and remaining households in the allocated sub-service areas should be

“strictly for internal 5 Policy on Business

Imparting Financial Inclusion to the excluded and underserved population in

1. To provide comprehensive financial services to the underprivileged

efficiencies by providing Doorstep/ near-doorstep Banking service through

business expansion to make it a profitable venture for them.

2. Selection Procedure for Business Correspondent

2.1 Corporate BC - Entity:

Executive Committee in its meeting dated 05.12.2013 had approved deployment

“strictly for internal 6 Policy on Business

Performance of Corporate BC shall be reviewed on quarterly basis through a

Corporate BCs will in turn appoint BC agents on behalf of bank at various

While engaging Corporate BC / BC Agents, it must be ensured that the Code of

Moreover, to keep a check on deployment of BC agents by the Circle offices, it

3. Eligibility Criteria for Business Correspondents

As per the directives of Department of Financial Services(DFS), Ministry of

“strictly for internal 7 Policy on Business

I. Individuals like honourably retired bank employees, retired teachers,

3.2 Selection criteria for eligible individuals and/or entities by Corporate

 Should know the local language/dialect

 Should satisfy the norms of due diligence.

 Should have knowledge about the area.

 Should not affiliate to any political party/ religious organization.

 The agent should be referred by two customers of our bank having

“strictly for internal 8 Policy on Business

 Should not be a defaulter borrower to any Bank.

 Past dealings, if any, with Bank should have been satisfactory.

 There is no minimum educational qualification for Business correspondents,

 The Business Correspondent should be a resident of the area in which the

 In case of individual, he should not be a director or officer/ employee of the

 Should have the capability to infer information, perform documentation,

should be non-discriminative secular, non-exploitative, transparent and have

 Entities should have significant rural/ semi-urban presence.

generate funds required for rendering services.

 All BC Agents will be appointed under a Corporate BC framework and bank

“strictly for internal 9 Policy on Business