YES Bank to get aggressive on the business correspondent model

Business opportunities being thrown up by the financial inclusion drive are so vast that the ‘business correspondent’ model has a huge potential, says Ganesh Narayanan, President of YES Bank’s Indian Financial Institutions division.

Narayanan told BusinessLine that YES Bank had already signed up with 40 financial service providers as BCs for taking its services to the under-banked population and the rural customers.

He said the bank would appoint more BCs as there was a huge untapped area waiting for financial services. The bank was looking for service providers which were strong and which had established a track record of service in specific geographies.

Narayanan was in Kochi to launch the first YES Bank-Muthoot Fincorp business correspondent (BC) outlet. The bank had, two month ago, appointed Muthoot Fincorp, which is a member of the Muthoot Pappachan Group, as its BC. Muthoot Finance Limited was also a correspondent for YES Bank.

Narayanan said one area where the BC system had unlimited potential was domestic remittances. The pan-India movement of migrant labourers was now requiring facilities to make large number of remittances each day as these labourers needed to transfer money to their families’ upkeep back in their villages.

The BCs could facilitate transfer of money by the labourers to the bank account and the families could withdraw the money at their convenience.

For instance, Kerala had lakhs of migrant labourers from Assam, Bengal, Orissa and Jharkhand. The BC outlet could help them transfer money at their convenience.

However, there was a limit to transferring money using the BC route. Those who could not provide KYC (know-your customer) documents, would be allowed to transfer a maximum amount of ₹25,000 a month. Those with KYC, could transfer ₹2lakh over a month.