Branchless Banking is driving financial inclusion

A large part of Bharat rural India is still tech-shy, plagued by technological inhibitions, and lacks trust in any form of digital financial transaction. This growing need to amplify reach and break through untapped markets is coaxing financial institutions to go branchless and offer their services in an assisted mode to the last mile with the help of fintech startups.

Branchless banking facilitated by the Business Correspondents (BCs) is the new mantra of the banking industry. This is evident in RBI’s 2021-2022 Annual Report, which states that the total number of outlets serviced by the BCs saw a 114% increase shooting up to 32+ lakhs in December 2021, from just 15+ lakhs in 2021.

The lack of financial literacy and scarcity of traditional financial institutions has forced the rural population to rely on age-old informal mechanisms that are often insufficient, unreliable and expensive. To provide financial services to everyone, everywhere, various financial institutions have started offering branchless banking facilities to a wider spectrum of consumers.

However, for India to be financially inclusive, branchless banking should go beyond solely a banking transaction and cover associated services such as savings, lending, and insurance while developing a holistic service model.