State Bank of India signs up Reliance Money Infra as business correspondent

            In a big boost to Indian unbanked prospective customers, State Bank of India has signed up Reliance Money Infrastructure Ltd (RMIL) as one of its Business Correspondent.

            RMIL is party of Anil Ambani Group.  The deal was signed on 25/02/2014, but is effective from a back-date i.e 05/10/2013.

            As part of the deal RMIL on the Assets side can:

• can identify borrowers;
• collect, process, and submit loan applications;
• promote credit groups;
• take up post-sanction monitoring, follow-up,
• and recovery.

Apart from the above, RMIL as SBI’s service provider  

• collect small-value deposits;
• sell micro-insurance, mutual fund and pension products; and
• Receive and deliver small-value remittances.

At present, the agreement covers the following products:

• no-frill savings bank accounts through kiosk banking model;
• home loans/loans against property;
• auto loans; gold loans;
• SME loans;
• general purpose credit card;
• kisan credit card;
• current account;
• savings bank account (other than no-frill account);
• term deposit;
• recurring deposit;

The above products will be on a referral mode.  Additional products may be added by mutual consent. Products may be also amended from time to time.

The agreement binds RMIL to the Fair Practices Code for lending as also its own code for collection of dues.  In the absence of such a code, it should abide by the Indian Banks’ Association code for collection of dues and repossession of security.

The agreement clearly specifies that it is essential that the service provider refrains from action that could damage the integrity and reputation of the bank.

            RMIL or its employees should not resort to intimidation or harassment of any kind, either verbal or physical, against any person in debt collection efforts, including making threatening or anonymous calls or making false and misleading representations.

            As on date there are no specific certifications to be obtained by Business Correspondents employees. The employees engaged in Recovery Process should have undergone 100 hours mandatory training for the certificate course for DSA/DMA/Recovery Agents conducted by IIBF accredited institutions.

            As on date the details of this tie-up are yet to be mentioned on SBI website or Reliance Money website.

            As per the RBI guidelines, the following entities are eligible for appointment of  Business Correspondents (BCs) for banks:

• NGOs/ MFIs set up under Societies/ Trust Acts,
• societies registered under Mutually Aided Cooperative Societies Acts or the
• Cooperative Societies Acts of States,
• Section 25 companies that are stand alone entities or in which NBFCs, banks, telecom companies and other corporate entities or their holding companies did not have equity holdings in excess of 10 per cent,
• post offices ,
• retired bank employees,
• ex-servicemen ,
• retired government employees.
• Individual kirana/medical/fair price shop owners
• Individual Public Call Office (PCO) operators
• Agents of Small Savings Schemes of Government of India/Insurance Companies
• Individuals who own petrol pumps
• Retired teachers
• Authorised functionaries of well run Self Help Groups (SHGs) linked to banks
• Non deposit taking NBFCs (non-banking finance companies) in the nature of loan companies whose micro finance portfolio is not less than 80 per cent of their loan outstanding in the financially excluded districts as identified by the Committee on Financial Inclusion

Scope of Activities to be undertaken by BCs

The scope of activities undertaken by BCs are as under :

• Creating awareness about savings and other products and education and advice on managing money and debt counseling.
• Identification of potential customers
• Collection and preliminary processing of various forms for deposits including verification of primary information / data
• Filling of applications / account opening forms including nomination clause and submission to the Bank.
• KYC will also be completed by the BCs.
• Opening of no frill deposit accounts and other products as permitted from time to time by leveraging technology.
• Collection and payment of small value deposits and withdrawals; Min : nil; Max : as decided from time to time, per transaction.
• Receipt and delivery of small value remittances / other payment instruments.
• In respect of all such transactions, the BC/his agent will be authorized to accept / deliver cash either at his place of work or at any convenient location subject to the ceilings per customer  as decided from time to time.
• Furnishing of mini account statements and other account information, for a period of 3 months.
• Any other service on behalf of the Bank, duly authorized by the appropriate authority.
• In respect of all such transactions, the BC/his/her agent will be authorized to accept / deliver cash either at his place of work or at any convenient location subject to the ceilings per day / per customer as laid down.
• The Business Correspondents will be linked to a nearby branch (base Branch).
• Cross-selling of other financial products like insurance / mutual fund products / pension products / any other third party product, as and when they are assigned to do so.
• In case duly appointed sub-agents of BCs, BCs to take care of reputational risks involved in such appointments.