Very soon, a grocery shop, a petrol pump or a PCO could offer an array of banking services such as opening accounts from their premises.

RBI has recently allowed the banks to appoint these units to act as their agents and carry out various banking operations. However, this would entail a fee, pre-decided by your bank.

The banking regulator has permitted entities like individual kirana/medical/fair price shop owners, PCO operators, agents of government-sponsored small savings scheme, petrol pump owners, insurance agents and retired teachers to act as ‘business correspondents' (BCs) of banks. An RBI notification said that allowing banks to appoint BCs was a part of its financial inclusion initiative.

In August, an RBI working group had suggested the banks to follow this BC model saying that the traditional model hindered penetration in remote areas of India. It held a view that the model could enable the backs to reach inaccessible areas in a cost effective manner.

RBI has considered two factors while appointing BCs. Firstly, the BCs should be experienced enough to handle cash inflow and outflow as part of their normal activities and secondly the BCs should be local residents.