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supported villages to the total numbers of bank branch–served villages, from
3.39 to 8.02 and further to 12.47, respectively. The latest RBI Annual Report
for 2010-11 (p.86) sets out the broad prospective policy in this regard thus:
“In future, banks would focus more on opening of brick and mortar
branches in unbanked villages. It may be a low cost intermediary
kiosk with a simple structure, requiring minimum infrastructure for
operating small customer transactions and supporting up to 8-10 BCs
at a reasonable distance of 2-3 Kms”.
Even more unrealistic is the expected increase in the coverage of small-
size peripheral villages with less than 2,000 population with banking services.
The increase is expected to be much more rapid in these villages, that is,
by 188% within a year during 2011-12 as against an increase of 68% in the
villages with more than, 2,000 population. Banks had been asked to reach out
to another 1.2 lakh villages over the next 15-odd months, i.e., by March 2012,
to cover all villages that have a population of 1,000-2,000 in what is described
as the third round of banking push (For a rough estimate, see Table 9.5). The
need for such a push has apparently been necessitated by the government’s
decision to move to a system of cash transfers of subsidy entitlements ranging
from fuel subsidy to payments for the rural employment guarantee scheme
(RBI, 2010: 92-94).
As the bulk of these have to be covered by BCs, it is the increase in the
number of BCs employed by banks that seems truly mind-boggling. As at the
end of March 2010, the number of BCs covered was 30,042 and it would gallop
six-fold to 1,87,972 within the above three years, that is, by March 2013. The
RBI’s latest Annual Report for 2010-11 (p.85) has revealed that as at end–
March 2011, domestic commercial banks have reported deploying 58,361
BCs/customer service providers (CSPs), providing banking services in 76,801
villages. A CAB (Pune) study quoted below has reported that there were 96,000
CSPs serving rural and urban locations by the end of Marhc 2012. These BCs
CSPs would require an equally large size of infrastructures, particularly staff
and IT-related technology platforms and arrangements. The quality of such
infrastructural facilities would be a major question to be watched.
That there is something amiss in the operation of the BC system is
evident from Dr. K. C. Chakrabarty’s laments in this regard:
“We are trying to use BCs to take banking to the people’s
doorsteps. The BC model is aimed at reducing the transaction costs
of banking services as the cost of regular bank employees is very high,
