What changed
The maximum distance criterion for a Business Correspondent's place of business from the base branch was increased from 15 km to 30 km for all area categories. This change was announced in the Annual Policy Statement for 2009-10 and supersedes the earlier 15 km limit set in the April 2008 circular. All other existing instructions on BC operations remain unchanged.
What it means for you
Banks can now deploy BCs in locations up to 30 km from the base branch, expanding their reach into underserved areas without needing new branches. This relaxation directly supports financial inclusion goals by enabling banks to serve more remote customers at lower cost. Lenders should review their BC network planning to leverage the extended radius for deeper rural and semi-urban penetration.
What you must do
- Update internal BC deployment policies to reflect the new 30 km distance limit from the base branch.
- Reassess existing BC coverage gaps and identify new locations within the expanded radius for onboarding.
- Communicate the revised distance criteria to all branch managers and BC partners to ensure compliance.
- Monitor BC operations to ensure adherence to all other unchanged guidelines from the April 2008 circular.
Who it affects
All Scheduled Commercial Banks (including RRBs), Local Area Banks, Business Correspondents and their partner organizations, Rural, semi-urban, and urban customers in underserved areas
Does this circular change any other BC eligibility or operational norms?
No, only the distance criterion is increased from 15 km to 30 km. All other instructions from the April 2008 circular remain unchanged.
Is the 30 km limit applicable to all areas or only rural?
The circular explicitly states the increase applies to rural, semi-urban, and urban areas uniformly.
When did this change take effect?
The circular was issued on April 24, 2009, and was effective immediately from that date.