Bc Agreement with Bank
BC Agreement with Bank: A Comprehensive Guide
A BC agreement with bank is a formal agreement between a business correspondent (BC) and a bank. The BC is appointed by the bank to perform banking services on its behalf. The agreement specifies the terms and conditions of the partnership between the two parties.
The Reserve Bank of India (RBI) has allowed banks to appoint BCs to extend their reach to remote and rural areas. BCs act as representatives of banks, providing services such as opening accounts, cash deposits and withdrawals, remittances, and loans. The partnership between a BC and a bank aims to bring banking services to the unbanked and underbanked population of the country.
Here are the key aspects of a BC agreement with bank:
1. Appointment and Scope of Work
The agreement specifies the appointment of the BC and the scope of work assigned to them. The BC is responsible for providing banking services to the identified customer segments in the assigned area. The scope of work includes the services to be provided and the service charges applicable to each service.
2. Service Charges
The agreement sets out the service charges to be levied by the BC for the services provided. The service charges are determined by the bank and are subject to change from time to time. The BC is responsible for collecting the service charges from the customers and remitting them to the bank.
3. Performance Standards
The agreement sets out the performance standards expected from the BC. The BC is required to maintain the minimum number of accounts, transactions, and balances as specified by the bank. The performance of the BC is reviewed periodically, and penalties are imposed for non-compliance with the performance standards.
4. Responsibility of the BC
The agreement specifies the responsibilities of the BC. The BC is responsible for maintaining the confidentiality of the customers` information and ensuring compliance with the Anti-Money Laundering (AML) and Know Your Customer (KYC) norms. The BC is also responsible for maintaining the necessary records and submitting periodic reports to the bank.
5. Liability and Indemnity
The agreement specifies the liability and indemnity clauses. The BC is liable for any loss caused to the bank due to non-compliance with the agreement or any fraudulent practices. The BC is required to indemnify the bank for any loss incurred due to their actions.
In conclusion, a BC agreement with bank is an important document that outlines the partnership between a BC and a bank. The agreement is designed to ensure that the BC provides high-quality banking services to the unbanked and underbanked population of the country. The agreement specifies the terms and conditions of the partnership, including the appointment and scope of work, service charges, performance standards, responsibility of the BC, and liability and indemnity clauses.