Finance Ministry Calls Emergency Meeting to Boost Rural Banking Efficiency

In a bid to strengthen rural banking networks in the country, the Department of Financial Services under the Finance Ministry called an emergency meeting on January 21 to address concerns around the functioning of business correspondents (BCs).

According to sources, the key agenda items for discussion include the payment of fixed commission to BCs operated at the grassroots level by banks and the waiver of penalties faced by these representatives. The meeting is also slated to explore the setting up of an infrastructure and equity fund specifically tailored for corporate BCs, with potential options including tapping into reserve funds managed by institutions such as the National Bank for Agriculture and Rural Development (NABARD) and the Reserve Bank of India's (RBI) Payments Infrastructure Development Fund.

The meeting is expected to bring together representatives from various stakeholders in the banking sector, including state banks, private lenders, and industry bodies to discuss ways forward in enhancing the rural banking ecosystem. By fostering greater cooperation and investing in these sectors, the goal is to expand access to basic banking services in rural areas, a challenge that has long plagued the country's economic development.