08 July 2025
Ref No. NB.HO.DMFI/54627 - 54637/ DMFI-23/2025-26
Circular No. 165/DMFI-06/2025
The Chairman/Managing Director/Chief Executive Officer
All Scheduled Commercial Banks (including Small Finance Banks and Payment Banks)/Regional Rural Banks/State Cooperative Banks/District Central Cooperative Banks
(Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim, Himachal Pradesh, Jammu & Kashmir, Ladakh and Uttarakhand)
Madam/ Dear Sir
Revised Incentive Scheme for Customer Service Points (CSPs)/Business Correspondents (BCs) of Banks operating in Northeastern (NE) and Hilly States/UTs
The Monitoring Committee on the functioning of Business Correspondents (BCs) constituted by Department of Financial Services (DFS), Government of India, in its Third meeting held on 13 October 2022, suggested that a scheme may be formulated by NABARD to compensate BCs operating in difficult areas. Accordingly, a scheme for compensating BCs operating in northeastern states was rolled out. The scheme was later extended to the hilly states/UTs.
2. In this regard, it is informed that the scheme has been revised based on the recommendations made by Monitoring Committee on functioning of BCs and other stakeholders.
3. As you are aware, the incentive under this scheme will be over and above the fixed commission and variable commission already being paid by the banks. The amount is an incentive payable directly to individual BC or BC agent or CSP operator henceforth referred to as “Operator” facilitating customer transactions upon meeting the minimum number of transactions.
4. The details of the modified scheme are as follows:
a.Operative Period: The revised scheme is effective from 01st April 2025 and will be operational up to 31st March 2026.
b.Eligible Institutions: The scheme will be applicable to all Banks operating in northeastern and hilly states/UTs (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim, Himachal Pradesh, Jammu & Kashmir, Ladakh and Uttarakhand).
c.Eligible Individuals: Operators directly engaged by Banks or Operators engaged by Banks through Corporate BCs. In other words, the individual providing the service will be eligible for the incentive and not the agency which has engaged them. The operator will be eligible for singular incentive irrespective of the number of villages served by him/her.
d.Eligible Locations: The Operators working in rural centres, i.e., Tier 5 & Tier 6 Centres (population up to 9,999) as per population Census 2011.
5.Activities eligible for Support: The indicative list of broad activities that may be made available at Operator outlets is indicated in Annexure 1.
Procedure for claiming reimbursement from NABARD:
a.The incentive of Rs.1500/- per month per operator is to be given to all eligible operators.
b.Banks to submit the proposal to the respective Regional Office of NABARD in the state where the operators are providing their services with details. Banks are required to obtain prior approval from the Regional Office of NABARD. The format of the application to be submitted by Banks is enclosed (Appendix I).
c.Upon sanction by NABARD, banks to pay incentive to BCAs/ CSPs on quarterly basis and submit reimbursement claim for the quarter within one month of close of the quarter in the prescribed format (Appendix – II).
d.Banks will be eligible to claim incentive under FIF for those operators who were attached to them for the entire quarter. However, for new operators engaged midstream during a quarter, performance of minimum one month will be taken into consideration.
e.To work out the monthly average number of financial transactions done by the operator, the total financial transactions done by the Operator in a quarter will be divided by 3 or number of months of engagement of Operator (subject to minimum of 1 month).
f.Banks need to submit a declaration that they have credited the incentive to the eligible operator’s bank account within 30 days from the end of the relevant quarter.
g.Banks to ensure review of performance of operators on a quarterly basis by their branches and on a half-yearly basis by the Controlling Offices for taking stock of performance and for providing guidance and trouble shooting.
h.All the operators to be supported will have to be enrolled by the Banks concerned on Jan Dhan Darshak portal, BC registry portal or any such portal maintained by DFS/IBA/RBI/NABARD.
7.Other important conditions:
a.Banks to make sincere efforts to enhance the credit flow in the financially excluded areas by setting self-imposed targets.
b.All the Operators under the scheme may be covered under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) & Atal Pension Yojana (APY).
c.Banks are encouraged to obtain a group medical insurance scheme for such Operators.
d.Banks to connect with Lead District Manager (LDM) & State Government Authorities for prioritizing placing of operators within a radius of 5 km of every uncovered village.
8.This circular overrides the previous circular Ref. Nos. 171/DFIBT-04/2023 dated 11 August 2023, 77/DFIBT-01/2024 dated 26 April 2024, 285/DFIBT- 05/2024 and 286/DFIBT- 06/2024 dated 26 November 2024.
Yours faithfully,
(Suseela Chintala)
Chief General Manager