Synopsis
India's business correspondent sector is expected to surpass Rs 147 billion by FY25 due to rising demand for rural banking, government initiatives for financial inclusion, and digital advancements. This growth reflects a significant increase in formal financial service adoption among rural households.Key Takeaways
- The business correspondent sector is projected to exceed Rs 147 billion by FY25.
- Growth is driven by government schemes and technological advancements.
- Over 1.35 million business correspondents facilitate access to banking services.
- BSBDAs are expected to grow from 380 million in 2020 to 550 million by FY25.
- Technological integration has strengthened financial transactions.
New Delhi, April 4 (NationPress) Fueled by increasing rural banking needs, government-driven financial inclusion initiatives, and advancements in digital technology, India's business correspondent sector is projected to exceed Rs 147 billion in FY25, as indicated by a recent report.
The sector has witnessed an astounding growth trajectory, expanding from Rs 47 billion in FY18 to Rs 102 billion in FY23, and is anticipated to surpass Rs 147 billion by FY25, reflecting a 19 percent compound annual growth rate (CAGR).
Business correspondents serve as bank representatives, assisting rural residents in establishing bank accounts.
This growth is significantly influenced by the expansion of the Pradhan Mantri Jan Dhan Yojana (PMJDY), wider adoption of Basic Savings Bank Deposit Accounts (BSBDAs), and the growing acceptance of Direct Benefit Transfer (DBT) schemes that directly deliver subsidies and welfare funds to beneficiaries.
As rural households increasingly engage with formal financial services, transaction volumes have surged—especially in regions where traditional bank branches are limited.
“With over 1.35 million business correspondent agents operating across India as per the PMJDY report, these banking intermediaries are facilitating access to financial services for millions, particularly in rural areas,” stated Shikhar Aggarwal, Chairman of BLS E-Services.
Covering a range of services from cash deposits and withdrawals to remittances, bill payments, Aadhaar-enabled services, and microfinance lending, business correspondents have become a vital link between formal banking institutions and underserved populations, Aggarwal noted.
The increase in BSBDAs under PMJDY has also played a critical role in propelling the sector forward.
From 380 million accounts in 2020, the number is projected to rise beyond 550 million by FY25. A significant portion of these accounts belongs to rural customers, with the majority of transactions—such as benefit disbursals under DBT, cash withdrawals, and remittances—conducted through BCs utilizing Aadhaar authentication.
Technological integration has further bolstered the sector. Platforms like UPI, Aadhaar-enabled Payment Systems (AePS), RuPay, and IMPS, coupled with mobile banking apps, have made financial transactions more secure and accessible, even in the remotest areas of the country.
According to NPCI data, over 520 million AePS transactions are currently being processed each month, with Business Correspondents playing an essential role in this volume.
