ANDHRA PRAGATHI GRAMEENA BANK HEAD OFFICE :: KADAPA CHAIRMAN S SECRETARIAT & FINANCIAL INCLUSION DEPARTMENT

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1 ANDHRA PRAGATHI GRAMEENA BANK HEAD OFFICE :: KADAPA CHAIRMAN S SECRETARIAT & FINANCIAL INCLUSION DEPARTMENT Cir: BC-CS & FID Date: FINANCIAL INCLUSION INCENTIVE SCHEME TO THE BUSINESS CORRESPONDENTS The Government of India, RBI, NABARD, SLBC, Sponsor Bank are attaching greater importance to the timely implementation of Financial Inclusion. The Bank has covered the allotted 531 FI villages with population above 2000, by covering 34 villages under Brick & Mortar Model and 497 villages with BC model. Further, the Bank has initiated all required measures for enrolling the uncovered persons under FI in the above villages, uploading the data to data center of HCL (FI vendor) and opening of accounts in CBS. The FI customers are provided with Smart Cards and the Business Correspondents with Master Card & Hand Held Machines (HHMs) to conduct operations. The scope and range of activities under Financial Inclusion is on increasing trend in the recent past and the methodology and policy initiatives are updated at frequent intervals by the apex agencies and so is the case with the policy on business correspondents. According to the agreement entered into between the Bank and the Technology Service Provider (HCL), the TSP shall pay a lump sum commission of Rs. 1200/- per month to each Business Correspondent towards the services rendered by the BC under FI. The BCs are expected to visit the Base Branch at least twice a week to remit the excess cash and to reconcile the transactions/balances., there by incurring reasonably good expenditure from out of their pocket. In view of the paltry sum of commission paid to the BCs, there are huge attrition levels among the BCs. In order to encourage the BCs to continue to take up the FI work and to provide them reasonable income, the Bank has approached the Board in the Board Meeting held on , proposing certain incentives for discharging various business services favoring the Bank. The Board vide Board Note number 21/BM-5/2013 dated approved the following incentive scheme to the Business Correspondents. The scheme comes into effect from

2 1. Transaction Incentive To encourage the Business Correspondents to improve the transaction levels, the Bank may pay Transaction Incentives at the following rates, payable from the date on which the BC commences operations in Hand Held Machine. No. of Transactions through HHT by BCs Incentive Proposed 2. Incentive for mobilization of Deposits S.No Category of Deposit canvassed by BC Incentive 1. Canvassing and opening of Pragathi Lakshadhikari Rs. 10/- per Account (RD) account 2. Canvassing other Fresh Term Deposit of Rs to Rs. 50/- per Account Rs for period of 1 year and above 3. Canvassing other Fresh Term Deposit of above Rs for period of 1 year and above Rs. 100/- per Account 3. Recovery of loans by BCs S.No Category Incentive 1. NPAs under Doubtful/Loss Assets category 2% of the Cash recovery amount 2. Written of Accounts 5% of the Cash recovery amount. 1. Transactions : Important aspects for consideration of Incentive to BCs The No. of transactions conducted by the BCs can be accessed by the branches / regional offices by viewing statement of account (450 Screen/700 Screen) of BC settlement account of the Business Correspondent, by choosing the period from 01 st to month end. 2. Mobilization of Deposits: 150 to 250 Transactions per month Rs. 200/- 251 to 400 Transactions per month Rs. 300/- Above 400 Transactions per month Rs. 400/- 1. Only fresh cash deposits canvassed by the BC shall be taken into account. 2. The deposits received at the counter in normal course of business shall not be considered. 3. The BC shall mobilize the deposits on his own and it shall not be the result of branch / staff efforts. 4. However, the branches may provide the details of prospective depositors to enable the BCs to contact them and mobilize the deposits. 5. The BC shall not be allowed to accept the cash directly from the depositors 6. The BC shall only convince the customers and bring them to the bank for payment of the deposit amount. 7. Branches shall maintain strict vigil on the deposit mobilization efforts of the BC, so that the BC is not allowed to gain any pecuniary advantage.

3 3. Recovery of NPAs/ Written off accounts 1. Recovery by way of cash shall only be considered 2. Branches may provide the details of NPAs/ written off accounts to the BC for making efforts for recovery. 3. However, the matter of the account being written off may not be disclosed. 4. The BC shall only convince the customers and bring them to the bank for payment of the recovery amount. 5. The BC shall not be allowed to accept the cash directly from the borrowers. 6. Branches shall maintain strict vigil on the recovery efforts of the BC, so that the BC is not allowed to gain any pecuniary advantage in the course of recovery. 7. The BCs are not entitled to get incentive for recovery of the NPAs/ written off accounts settled under OTS. In all the above cases the branches shall record the details of deposit canvassed and recovery effected with full details such as date, account no, type of account, name of the customer, amount etc., so that the same can be used for preparing the monthly statement which is to be submitted to the Regional Office for sanction. Claim Procedure: Once in a month, branches shall submit the statement in the enclosed format to the Regional Office for sanction of Incentive. The Regional Offices are authorized to sanction the eligible incentive to the BCs according to the norms cited above, duly cross checking the data provided by the branches. Time schedule: The branches shall submit the statement to Regional Office on or before 05 th of the following month. The Regional offices shall scrutinize the claims, sanction the same and accord sanction of the incentive amount to the branch concerned before 10 th. On receipt of sanction from RO, the branch shall debit the same to General Charges- Incentive to BC (935510BBBBC) Head and credit to Savings Bank account of the BC, duly obtaining an acknowledgement as per enclosed proforma. All the relevant papers as above shall be kept in a separate file for verification. The internal Inspectors/ Regional Managers/ Other visiting dignitaries may verify the correctness of incentives paid to the BCs and report deviations if any. The Incentive scheme is introduced to support and motivate the Business Correspondents to take up the FI work actively and to minimize the attrition levels of BCs. It will also help the Bank in improving the Business and for recovering the NPAs / written of accounts. Hence all the Branches and Regional Officers are advised to ensure that the incentive scheme is implemented strictly as per the guidelines mentioned above by motivating the BCs to improve the transactions and to canvass the deposits/ recoveries to the Bank. Clarifications required if any, may be sought from the Head Office, CS & FI Department through regional office as per extant guidelines. (D. SAMPATH KUMAR CHARY) C H A I R M A N

4 ACKNOWLEDGMENT I Sri/Smt., BC of Village received an amount of Rs. (Rupees), from APGB branch, towards the incentive for mobilization of Deposit / conducting of transactions and in recovery of NPA/WO accounts, for the month of towards the credit of my SB account no on. I am aware that the above incentive is provided by the Bank to motivate/ encourage me to do the effective service to the public under Financial Inclusion / DBT. (SIGNATURE OF THE BC)

5 ANDHRA PRAGATHI GRAMEENA BANK HEAD OFFICE :: KADAPA BRANCH Monthly Statement of Incentive to Sri/Smt BC of Village for Month Year Transaction Incentive: No. of transactions conducted during the month Eligible Amount of Incentive payable to BC Remarks, if any Deposit Mobilization Incentive S.No Type of Date of Deposit Mobilization Name of the customer Account No. Amount mobilized (Rs) Period Deposit of Eligible payable Incentive Recovery Incentive: S.No Type of Loan (NPA/ W/O) Status of account (D1/D2/D3/Loss) Date of recovery Name of the customer Account No. Amount of cash Recovered Eligible payable Incentive We certify that the above particulars are true and correct and in accordance with the HO: Circular No BC-CS&FID dated. and the total incentive of Rs. (Rupees. ) may be sanctioned to the above Business Correspondent. Date: Officer- Advances Manager For RO Use: 1. Amount Claimed : Rs. 2. Amount Rejected : Rs. 3. Net Amount Payable : Rs. SIGNATURE VERIFYING OFFICER SIGNATURE of REGIONAL MANAGER

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