RBI Proposes New Framework for Banking Correspondents

The Reserve Bank of India (RBI) has unveiled a proposal to introduce a dual-category system for banking correspondents, aiming to streamline their assignments and standardize their remuneration. According to the draft norms released on Monday, this initiative is part of efforts to enhance the efficiency and reach of retail banking operations in rural and remote regions.

In the proposed framework, three types of delivery points are envisaged: traditional bank branches, Business Correspondent-Banking Outlets (BC-BO), and Business Correspondent-Banking Touchpoints (BC-BT). These changes are intended to unify the payout structure for business correspondents, whose current commissions vary widely between different banks, thereby bringing consistency to their ecosystem.

Driving bank operations to underserved areas forms a cornerstone of the RBI's financial inclusion strategy. In light of over 16 lakh banking correspondents engaged across India by June 2025, the new norms also propose to integrate Business Facilitators into the existing model. Stakeholders have until May 5, 2026, to provide feedback, following which the recommendations will be fine-tuned. These proposals were formed based on a committee's findings, composed of representatives from key financial institutions, underscoring the collaborative approach to improve banking outreach.