UPSC Prelims 2014 · Question 12 of 100
UPSC Prelims 2014 question on Business Correspondent Bank Saathi
- ExamUPSC CSE
- Year2014
- PaperGeneral Studies Paper I
- SubjectInternational Relations
- TopicCurrent Affairs
- DifficultyMedium
- TypeStatement
What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas?
1. It enables the beneficiaries to draw their subsidies and social security benefits in their villages.
2. It enables the beneficiaries in the rural areas to make deposits and withdrawals.
Select the correct answer using the code given below.
Show answer
Answer: C. Both 1 and 2 only
Verdict
The answer is both 1 and 2. A Business Correspondent, branded Bank Saathi, delivers both benefit payments and basic deposit and withdrawal services in areas without a bank branch.
Analysis
Statement 1 is CORRECT. The Business Correspondent model was used under the Swabhimaan financial inclusion drive precisely so that subsidies and social security benefits could be drawn in the village itself instead of at a distant branch. Statement 2 is CORRECT. Business Correspondents are authorised to accept small value deposits and to disburse withdrawals on behalf of the bank, using a handheld device linked to the account. The two functions are complementary: benefit transfer is worthless if the beneficiary cannot then withdraw the money locally.
Source
Government scheme documents and India Year Book.
How to crack it
For financial inclusion questions, reason from the purpose of the intermediary rather than from a memorised mandate. A Business Correspondent exists to substitute for a branch, so anything a branch counter routinely does for a small customer is likely permitted. The one thing to remember on the other side is that a Business Correspondent is an agent of the bank and does not itself hold deposits or take credit decisions. That single boundary answers most questions in this family.
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