As part of the ongoing efforts to promote financial inclusion in unbanked areas, the

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Reserve Bank of India (RBI) plans to introduce new guidelines on the business correspondent (BC) model that would facilitate greater spread of banking services to remote areas.

“We are working on a fresh set of guidelines for the business correspondents model that would help in greater financial inclusion. At present, the model is too restrictive and we are constantly examining the correspondent model to make it more operative,” H R Khan, executive director, RBI, said at function on Friday at Ranikhera village, a rural area near New Delhi. Khan was talking at a function organised to commence banking facilities in the unbanked area.

To provide banking facilities in the area Punjab National Bank, in coordination with RBI, has opened a biometric ATM at Ranikhera village. The biometeric facility will help to operate the ATM with the help of physical identification such as impression of finger or the palm.

Several other banks such as Syndicate Bank, State Bank of India, Oriental Bank of Commerce are also in the fray to open many such ATM branches.

“PSU banks can set up an international benchmark with its strong technology with a focused approach to expand access to finance for the common man staying in unbanked areas,” Khan said.

The ATM counter will service four villages and approximately 300,000 villagers.

“There is an immense potential in the far-flung areas of our country. Around 65 per cent of India doesn’t have a bank account. Therefore, our approach is always to work towards the financial inclusion and provide knowledge of banking in those areas,” said Nagesh Pydah, executive director, Punjab National Bank.

BCs are intermediaries who facilitate banking transactions with the formal banking system in villages or in areas where it is not possible for the people to reach a bank branch. BCs include entities such as kirana shop owners, public call office operators and retired teachers, among others.

Speaking on the occasion, Sandip Ghose, regional director, Reserve Bank of India, said the central bank hopes to improve financial literacy among the people.

“We are adopting a cluster approach by setting up a platform that will cater to the underprivileged in a cluster of villages. We are also trying to increase the level of financial literacy among them,” said Ghose.