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In 2006, RBI(Reserve Bank of India) introduced a regulation that allows banks to deliver their services at the doorstep of the clients through third-party services. These representatives are known as “the Business Correspondents or Banking Correspondents(BC).”
Business correspondents are authorised bank representatives to offer banking services in small towns or villages where the client cannot find a branch.
Business correspondence refers to the giving/exchanging of information in a business regarding its activities. Business correspondence generally takes place within organisations or between customers and organisations.
Business Correspondents Agents
These are retail agents representing banks and are responsible for providing banking services at clients’ doorstep rather than a bank branch/ATM. BCs help banks provide their bounded range of services at a reasonable cost. Thus, they are vital to promoting economic inclusion.
However, the significant role of BCs is to lead the functioning and development of unorganised banking sectors.
They charge a commission from the respective bank for the sales of their services like opening new bank accounts, enrollment of new clients, financial transactions, cash deposits, etc.
Use of Technology and Correspondents-
The technology and banking correspondents together can help banks reach unorganised sectors effectively. Banks can smoothly utilise mobile and ATMs with banking correspondents to provide low-cost solutions to unbanked clients.
The Unique Identification Authority of India(UIDAI) would allow beneficiaries to withdraw their cash near their homes via the core banking system.
Services Available at BC Outlets
Essential banking services like Saving Account Opening, Cash Deposit (Own Bank/Other Bank), Cash Withdrawal (Own Bank/Other), Fund Transfer (within the bank), Balance Enquiry, Mini Statement, etc., and advanced services like IMPS, NEFT, Cheque Status Enquiry, Issuing Debit Card and Loan Application. They also sought to provide Financial Literacy to the consumers.
These BC outlets can be located from the government app Jan Dhan Darshak. Some services can be offered at the doorstep to senior citizens.
Business Banking Correspondence
“Any letter which is exchanged between at least two parties(banks and clients) or any other letter which is written to provide information regarding banking services to different banks or parties” is known as banking correspondence.
Banking Correspondence can also be considered a type of business communication. Banks are also business houses and play a crucial role in these fields. There are many similarities between banks and businesses. Every bank(public/private/foreign) faces tough competition like other business firms.
Business correspondence does not include oral communication or face-to-face communication. It refers to the written communication between two different persons/organisations.
One needs to be very careful while penning banking letters as they deal with finance and should maintain confidentiality. Also, the 7C’s of Communication need to be kept in mind (Clear, Complete, Consistency, Courteous, Consideration, Concise, Confidential).
Banking Correspondence Letters
Official banking letters can be handwritten or printed. With the emergence of new technology and means of communication, letters are exchanged through emails and faxes in printed forms.
Different types of business letters which are penned in Banking are as follows-
- Letters of inquiry like Requests for Loans/Overdrafts etc
- Letters of claim/complaints like Complaint Letter, Claiming the loan amount, etc.
- Letters of approval/dismissal like a letter for Approval of loans etc.
- Letters of recommendations Asking for contacts of previous creditors/suppliers, collaterals, etc.
- Letters of promise like Payment in the future for the loan.
Banking correspondence is exchanged:
- between a bank and their customers
- between a head office of a bank and its branches or employees
- between at least two different banks.
Conclusion
BCs aims at merely providing delivery of banking services to all households. To fulfil the Government of India’s vision, Small Financial Banks adopted the Business Correspondent (BC) model regulated by the RBI. In short, Business Correspondent acts as a link between the end-users of banking services and their respective banks.
Business letters or correspondence help in creating goodwill for the firm. A businessman needs to deal with some notes in his day-to-day life. A correspondence is written between any organisation or within an organisation to help exchange information or messages, which helps in the smooth functioning of the business activities.
