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Financial Inclusion through Business Correspondents

No longer current — withdrawn, no replacement on file yet

Issued by RBI: 22 Mar 2006

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📄 Source: Reserve Bank of India · RBI/2005-06/331

Quick answerRBI advises banks to defer selection of NBFCs as Business Correspondents until eligibility criteria are finalized.

What changed

RBI is examining eligibility criteria for NBFCs to act as Business Correspondents. Banks are advised to defer selection of NBFCs until the criteria are finalized.

What it means for you

This affects banks' ability to use NBFCs as Business Correspondents for financial inclusion. Banks must wait for RBI's finalization of eligibility criteria before proceeding.

What you must do

Wait for RBI's finalization of eligibility criteria for NBFCs as Business Correspondents
Use NBFCs licensed under Section 25 of the Companies Act, 1956 as Business Correspondents in the meantime

Who it affects

Scheduled Commercial Banks, Regional Rural Banks, Local Area Banks, NBFCs

Regulatory timeline

Decoded by BankPulse 2026-07-05 22:32 IST
Status change: withdrawn 12 Jul 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the current status of NBFCs as Business Correspondents?

RBI is examining eligibility criteria for NBFCs to act as Business Correspondents. Banks are advised to defer selection of NBFCs until the criteria are finalized.

What can banks do in the meantime?

Banks can use NBFCs licensed under Section 25 of the Companies Act, 1956 as Business Correspondents.

📜 Read the original circular — full text as issued by RBI

RBI/2005-06/331
 DBOD.No.BL.BC. 72/22.01.009/2005-2006 
 March 22, 2006 
 Chaitra 01, 1928 (S) 
 The Chairmen & CEOs
 (All Scheduled Commercial Banks including
 Regional Rural Banks and Local Area Banks) 
 Dear Sir, 
 Financial Inclusion by Extension of Banking Services - Use of Business Facilitators and Correspondents 

 Please refer to our Circular DBOD.No.BL.BC. 58/22.01.001/2005-2006 dated January 25, 2006 on the above subject. 
 2. In terms of the above circular, under the 'Business Correspondent' Model, registered NBFCs not accepting public deposits are among the eligible entities that can be engaged as intermediaries by banks. RBI is in the process of examining the eligibility criteria, etc. of NBFCs who can be assigned the role of Business Correspondent/s by banks. Pending the exercise, banks are advised to defer selection/use of NBFCs as Business Correspondent/s. However, banks can use NBFCs licensed under Section 25 of the Companies Act, 1956 as Business Correspondents. 

 Yours faithfully, 

 (P. Vijaya Bhaskar)
 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/331 · issued 22 Mar 2006. The plain-English explanation above is BankPulse’s own independent summary.

Test yourself

Quick self-check built only from the facts already on this page — tap a question to reveal the answer.

Q1. In one line, what does this circular do?

RBI advises banks to defer selection of NBFCs as Business Correspondents until eligibility criteria are finalized.

Q2. Who does this circular apply to?

Scheduled Commercial Banks, Regional Rural Banks, Local Area Banks, NBFCs

Q3. What is the first thing you should do about it?

Wait for RBI's finalization of eligibility criteria for NBFCs as Business Correspondents

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Who does what — compliance checklist

📜 Compliance

Wait for RBI's finalization of eligibility criteria for NBFCs as Business Correspondents
Use NBFCs licensed under Section 25 of the Companies Act, 1956 as Business Correspondents in the meantime

Grouped from the action items above — a single circular may involve more than one team.

Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Scheduled Commercial Banks, Regional Rural Banks, Local Area Banks, NBFCs), your first concrete step on “Financial Inclusion through Business Correspondents” is: “Wait for RBI's finalization of eligibility criteria for NBFCs as Business Correspondents” (RBI issued this 22 Mar 2006).

Circular: RBI/2005-06/331 -- Financial Inclusion through Business Correspondents
Issued: 22 Mar 2006
Action required: Wait for RBI's finalization of eligibility criteria for NBFCs as Business Correspondents
Action required: Use NBFCs licensed under Section 25 of the Companies Act, 1956 as Business Correspondents in the meantime
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

AI-drafted · 1-model AI consensus fact-check · under the editorial review of our expert review panel · decoded & published by BankPulse · 06 Jul 2026, 11:26 IST

Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2787&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert review panel. Independent platform, not affiliated with the Reserve Bank of India; never reproduces RBI text verbatim.