The business correspondent model was designed by the RBI in the year 2006 wherein NBFCs which do not accept public deposits, Non Governmental Organizations (NGOs), Micro Finance Institutions (MFIs) and other organizations of the kind can act as business correspondents and thereby finance the rural community.
But the entire process has to take place under banks' vigil. Banks can only authorize those entities as business correspondents who are financially solvent enough for the process. The process was initiated taking into consideration the good amount of penetration of NBFCs into rural sections of India.
This indicates that there have been efforts carried out every now and then to carry forward with the objective. But despite such efforts, the motive of complete financial inclusion could not be achieved till today.
The basic factors which are accounted for the failure of such efforts are absence of technology, absence of reach and coverage, inefficient delivery mechanism, and last but not the least lack of compassion by the rich for the poor.
In order to combat these problems, the Reserve Bank of India has again started a fresh drive towards financial inclusion this year. The drive has been marked as a token of Platinum Jubilee Celebrations of the Central Bank.
The RBI feels that financial literacy is important not only for upliftment of the weaker sections but also to curb anti social activities like currency frauds which are tightening their grip on the society. RBI has emphasized that once people are made aware of currency notes and how to judge their authenticity it will be easier to combat such malpractices. The poor people would thus be able to save themselves from fraudulous activities. The RBI wishes to make the common man aware of the existence of the Central Bank, its functions and its importance.