Financial inclusion: India's business correspondent sector to cross Rs 147 billion in FY25

The sector is experiencing a remarkable surge, from Rs 47 billion in FY18 to Rs 102 billion in FY23, and was on course to cross Rs 147 billion by FY25, a 19 per cent compound annual growth rate (CAGR).

Business correspondents are bank representatives who help villagers to open bank accounts.

This 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.

As rural households adopt formal financial services, transaction volumes have spiked — particularly in areas where physical bank branches remain scarce.

“With over 1.35 million business correspondent agents operating across India as per PMJDY report, these banking intermediaries are enabling millions of people — especially in rural regions — to access financial services,” said Shikhar Aggarwal, Chairman, BLS E-Services.

From cash deposits, withdrawals, and remittances to bill payments, Aadhaar-enabled services, and microfinance lending, business correspondence has become an essential bridge between formal banking institutions and the underserved population, Aggarwal added.

The rise in BSBDAs under PMJDY has also contributed significantly to the sector’s momentum.

From 380 million accounts in 2020, the number is expected to exceed 550 million by FY25. 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.

Technological integration has further strengthened the sector. Platforms such as UPI, Aadhaar-enabled Payment Systems (AePS), RuPay, and IMPS, along with mobile banking applications, have made financial transactions more secure and accessible, even in the country’s most remote corners.

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.