New Delhi: India’s Business Correspondent (BC) sector will cross Rs 147 billion by financial year 2025 (FY25). The sector is reporting a compound annual growth rate (CAGR) of 19 per cent. A report published by digital service provider, BLS E-Services showed this.
As per the report by growth is being driven by the expansion of the Pradhan Mantri Jan Dhan Yojana (PMJDY), deeper penetration of Basic Savings Bank Deposit Accounts (BSBDAs), and the increasing popularity of Direct Benefit Transfer (DBT) schemes that channel subsidies and welfare funds directly to beneficiaries.
Business Correspondents (BCs) are bank-appointed representatives who deliver essential banking services in underserved and remote areas. BCs operate as the extended arm of formal banking institutions, enabling last-mile delivery of financial services. They function on a commission-based model. They earn either a fixed fee or a percentage of the transaction value, depending on the type of service provided.
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According to the report, the industry grew from Rs 47 billion in FY2018 to Rs 102 billion in the financial year 2023 (FY23). As per the report, the number is expected to exceed 550 million by FY2025 from 380 million accounts in 2020.
‘With over 1.35 million BC agents operating across India as per PMJDY report, these banking intermediaries are enabling millions of people–especially in rural regions–to access financial services. From cash deposits, withdrawals, and remittances to bill payments, Aadhaar-enabled services, and microfinance lending, BCs have become an essential bridge between formal banking institutions and the underserved population,’ said Shikhar Aggarwal, Chairman, BLS E-Services.
Most of these accounts are held by rural customers, and the majority of transactions–such as benefit disbursals under DBT, cash withdrawals, and remittances–are executed through BCs using Aadhaar authentication.
According to Lokanath Panda, COO, BLS E-Services, ‘The Business Correspondent (BC) industry is projected to grow at a 19 per cent CAGR from FY22 to FY25P, expanding from ?102.9 billion to ?147.4 billion. Key growth drivers include the expanding rural outreach of BCs, rising BSBDA accounts and deposits, increased transaction volumes, and the growing adoption of government DBT schemes.’
According to NPCI data, over 520 million AePS transactions are already being processed every month, with Business Correspondents playing a pivotal role in this volume.
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