₹14700 Crore Boom: Incredible Growth & Untapped Potential in India’s Business Correspondent Sector by FY25
India’s Business Correspondent (BC) sector is witnessing remarkable growth and is projected to exceed ₹14,700 crore by FY25, according to a report by BLS E-Services. This represents a solid CAGR of 19% since FY18, driven by expanding financial inclusion programs such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), Direct Benefit Transfers (DBT), and the rising number of Basic Savings Bank Deposit Accounts (BSBDAs).
The industry has grown from ₹4,700 crore in FY18 to ₹10,200 crore in FY23, reflecting the increasing reliance on BCs in rural and underserved areas. Over 1.35 million BC agents across India are providing essential banking services like deposits, withdrawals, bill payments, and microloans. Their commission-based model allows them to earn income while helping bridge the gap between formal banks and remote communities. With most new BSBDAs being opened in rural regions, the sector is poised for further expansion.
Digital tools such as UPI, AePS, and mobile banking have enhanced access and convenience, empowering BCs to handle over 520 million AePS transactions monthly. Experts from BLS E-Services highlight that this ecosystem is playing a pivotal role in reshaping financial inclusion across the country.
₹14700 Crore Boom: Incredible Growth & Untapped Potential in India’s Business Correspondent Sector by FY25
India’s business correspondent (BC) network, a critical pillar of the country’s financial inclusion drive, is projected to grow rapidly, with its market value expected to exceed ₹14,700 crore by the financial year 2024–25. A recent analysis by BLS E-Services reveals that the sector has expanded at a steady annual growth rate of 19% since 2018, reflecting its rising importance in bridging the gap between formal banking systems and underserved populations.
Explosive Growth Fueled by Government Initiatives
The sector’s value skyrocketed from ₹4,700 crore in FY18 to ₹10,200 crore in FY23, and this upward trajectory shows no signs of slowing. Key government schemes like the Pradhan Mantri Jan Dhan Yojana (PMJDY), which promotes universal access to banking, and the Direct Benefit Transfer (DBT) system—used to disburse subsidies and welfare payments—have been central to this growth. Additionally, the surge in Basic Savings Bank Deposit Accounts (BSBDAs), designed for low-income households, has brought millions into the formal financial ecosystem.
Business correspondents, often local agents partnered with banks, operate in rural and remote areas where physical branches are scarce. They enable basic services such as deposits, withdrawals, remittances, and bill payments, earning commissions based on transaction volumes or fixed fees. This model not only empowers communities by creating local livelihoods but also ensures that welfare funds reach beneficiaries directly, reducing leakage and delays.
Rural Outreach and Digital Adoption Drive Momentum
With over 1.35 million BC agents currently active nationwide, these intermediaries have become the backbone of rural banking. Their presence has led to a dramatic increase in transaction volumes as more households embrace formal financial services. PMJDY data highlights that rural customers dominate the BSBDAs, which are projected to grow from 380 million in 2020 to over 550 million by FY25.
Digital innovation has further accelerated this transformation. Tools like the Unified Payments Interface (UPI), Aadhaar-enabled Payment Systems (AePS), and mobile banking apps have simplified access to secure transactions. For instance, the National Payments Corporation of India (NPCI) reports over 520 million AePS transactions monthly, many facilitated by BCs in areas with limited internet connectivity.
Leaders Highlight Key Growth Drivers
Shikhar Aggarwal, Chairman of BLS E-Services, emphasized the BC network’s role in democratizing financial access: “Business correspondents are the lifeline for rural India, ensuring even the most remote communities can participate in the formal economy.” He linked the sector’s expansion to the rising number of BSBDAs and the government’s push for direct benefit transfers.
Lokanath Panda, COO of BLS E-Services, added that the combination of increased rural account openings, higher transaction activity, and technology adoption has created a virtuous cycle. “As BCs expand their reach, they’re not just facilitating transactions—they’re building trust in digital financial systems,” he noted.
The Road Ahead
The BC model’s success lies in its adaptability. Agents now offer services beyond basic banking, including microfinance, insurance, and Aadhaar-linked utilities. This diversification, coupled with India’s push for a cashless economy, positions the sector for sustained growth.
However, challenges like infrastructure gaps in remote regions and the need for continuous agent training remain. Addressing these will be crucial to maintaining the sector’s 19% growth rate and ensuring that financial inclusion translates into equitable economic progress.
In summary, India’s business correspondent network is more than a banking channel—it’s a catalyst for rural empowerment. By merging grassroots presence with digital tools, BCs are reshaping how millions interact with money, paving the way for a more inclusive financial future.