Banking and Financial Services (BFSI) - Theory: BC/BF Framework, KYC and Financial-Inclusion Schemes
This domain covers the theory paper of the PSEB NSQF Banking and Financial Services (BC/BF) trade - the Business Correspondent / Business Facilitator channel through which banks deliver basic services in unbanked areas. Expect questions on the RBI BC/BF framework, KYC and small accounts, the government financial-inclusion schemes routed through BCs, and the customer-protection rules that bind an agent.
BC versus BF
- A Business Facilitator only facilitates: identifying customers, helping fill forms, counselling on credit, savings, insurance and pension, and assisting recovery. A BF never touches cash.
- A Business Correspondent does all of that and handles cash - small deposits, withdrawals, remittances, balance enquiry - through an ICT device or micro-ATM.
- The BC is an agent of the bank, not a bank. The bank stays answerable to the customer for the BC's acts of omission and commission.
- A BC is paid commission by the bank and must not levy charges on the customer for these services.
- The outlet must display the sponsoring bank's name, the BC's name and ID, and contact details for grievances.
KYC and the small account
- Identity is proved with an Officially Valid Document (Aadhaar, passport, driving licence, voter card, MGNREGA job card) plus address proof; e-KYC uses Aadhaar with the customer's consent.
- A small account under the PMLA rules needs only a self-certified photograph and signature or thumb impression: total credits up to ₹1 lakh a year, withdrawals up to ₹10,000 a month, valid 12 months, extendable once by another 12 months.
Schemes at the counter
PMJDY gives a zero-balance Basic Savings Bank Deposit Account with a RuPay card, ₹2 lakh accident cover and an overdraft of ₹10,000 after six months of satisfactory operation; PMSBY (₹20 a year) and PMJJBY (₹436 a year) give ₹2 lakh cover each; APY builds a pension corpus. Benefits reach accounts through the Aadhaar Payment Bridge.
Worked example
A customer opens a small account on 10 May 2024 on self-certification. By 31 March 2025 she has deposited ₹95,000 in total, withdrawing ₹9,000 each month. Annual credits (₹95,000) are inside the ₹1 lakh cap and monthly withdrawals (₹9,000) inside the ₹10,000 cap, so operation is valid. However, the 12-month validity ends on 9 May 2025: without OVDs for full KYC the bank may extend once, and if KYC is still incomplete at the end of that extension it must close the account and pay the balance.
Traps that cost marks
- Treating a Business Facilitator as a cash-handling role.
- Assuming a BC may quote service charges to the customer.
- Checking only the credit cap and ignoring the withdrawal cap or the 12-month clock.
- Believing the bank is not liable for the agent's errors.
- Swapping PMSBY and PMJJBY premiums and age bands (PMJJBY is 18–50 years; PMSBY is 18–70 years).