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Since 2006, when the Reserve Bank of India permitted to use services of third parties as business correspondents (BCs), banks have been trying to create a sufficiently large retail footprint to offer banking services to the last mile customer in a seamless and cost efficient manner. In order...
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Sustainability of BC Network Managers (BCNMs) - Review of Commission Structures

Author: Chris Linder, Shivshankar V., Ghiyazuddin Mohammad
Published: July 25, 2011


Business correspondents (agents) and their managing support organisations, BCNMs, play a very important role in promoting Financial Inclusion in India, yet they often face the biggest challenge of sustainability. This Note critically analyses the different commission structures and the implications this has on the top-line revenue of the BCNMs. For this purpose, MicroSave analysed six actual branchless banking commission structures offered by three major banks in India. The objective of this note is to present common ways banks use to compensate BCNMs for various services and provide an indication of commissions that may be relatively more rewarding.

Tags: India , South Asia , Eko , FINO , ICICI bank , State Bank of India , IFN72 , IFN 72 , Digital Financial Services , Agent networks , Costing and pricing , Agent banking , Business model

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