Question 24 from UPSC CSE 2014 - Economy

Question

What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas?
1. It enables the beneficiaries to draw their subsidies and social security benefits in their villages.
2. It enables the beneficiaries in the rural areas to make deposits and withdrawals.
Select the correct answer using the code given below.

IASCODEX · Accepted Answer

Correct Option: C. Both 1 and 2

Strategy: Highlight the dual role of Business Correspondents in facilitating government benefit withdrawals and providing essential banking services like deposits and withdrawals in rural and branchless areas.

Key Info: Business Correspondents (BCs), also known as Bank Saathi, are engaged by banks to provide financial services in remote and branchless areas, especially under financial inclusion initiatives like Swabhimaan and Pradhan Mantri Jan-Dhan Yojana. BCs offer a range of basic banking services including:

- Cash withdrawal and deposit services at the doorstep using micro-ATM or POS devices.
- Disbursement of government subsidies, social security benefits, pensions (e.g., MGNREGA wages, old age pension) directly to beneficiaries in villages, eliminating the need to visit a bank branch.
- Collection of small value deposits, balance enquiry, and mini statement requests.
- Account opening and KYC facilitation for basic savings bank deposit accounts.
- Promoting financial literacy and serving as an interface between banks and customers in underbanked areas.

BCs operate under guidelines issued by the Reserve Bank of India (RBI), and their actions are subject to regulatory oversight to ensure credibility and financial integrity. They facilitate wider access to formal banking, especially for rural populations, migrant workers, women, and marginalized communities.

IASCODEX · Answer

Option A: 1 only

IASCODEX · Answer

Option B: 2 only

IASCODEX · Answer

Option D: Neither 1 nor 2