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An Agent Success Framework – Part I: Why must agent networks offer access to reliable CICO services?

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The business correspondent (BC) network has become the backbone of last-mile delivery systems in India, connecting citizens to crucial social protection and financial inclusion programs. Agents help customers withdraw and deposit money in their own bank accounts, most importantly in locations where traditional modes of cash-in cash-out (CICO) such as ATMs and bank branches are not feasible. This function of BC networks has been pivotal in providing emergency support during the pandemic. Agents assisted low-income individuals all over the country by facilitating withdrawals of the emergency social protection support sent to citizen bank accounts.[1] The Reserve Bank of India (RBI) posits that, in rural locations, access to banking services is predominantly provided through BC agents.[2] It is apparent that BC networks are critical to the success of financial inclusion and social protection safety nets in India. Accordingly, it becomes imperative to evaluate the quality of infrastructure that allows people to access the money sitting in their own bank accounts.

More importantly, as more formalization and digitalization of financial services becomes a day-to-day reality for India’s low-income households, their easy access to their own money must be treated as non-negotiable. If such access is unreliable or risky, the backlash in terms of loss of trust will push the inclusion agenda backwards by many years. And in this sense, the banking system becomes a true utility provider, that of providing access to own funds when and where the owner of the account needs it.

In this blog post, we collate evidence of the various reasons that prevent the BC network from offering access to reliable CICO services all over the country. We rely on a mix of evidence in the form of qualitative case studies, survey results, and secondary sources. We identify following major causes of friction for the customer in their interactions with BC networks:

  1. Density of access points

Access to CICO services in many remote and rural locations is still a problem, despite the initial motivation behind BC network being to make banking accessible to all. The Global Findex Database 2021 reports that approximately 43% of unbanked Indian adults cited distance to a financial institution as a barrier to account ownership.[3] A nationally representative survey shows that 52.6% of BC users who faced some issue during the cash withdrawal process reported that the cash-out point was far away from them, indicating that access to BC agents is still a problem.[4]

While the RBI states that the number of BC outlets is increasing in both urban and rural locations[5], data on the number and spread of BC agents in the country is not made publicly available. This makes it difficult to ascertain the nature and extent of the access problem in the country, despite evidence indicating that it does exist.

  1. Operational issues

Even when a customer can physically access a BC agent to withdraw/deposit cash, there may be operational issues that hamper the success of the transaction. Between January and July 2020, 46% of households who faced some issues during their attempts to withdraw cash from their accounts cited transaction failures which caused failed withdrawal attempts.[6] A survey by Libtech (2020) of 2000 workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) found that 40% of CSP/BC users faced biometric authentication failure at least once in their last 5 transactions.[7] Other estimates place the biometric authentication failure rate in the Aadhaar-enabled  Payments System (AePS) at 19-20%.[8] Transactions may also fail due to failure of internal banking systems or an inoperative switch.[9]

From the customer’s perspective, failed transactions can cause a great deal of anxiety and uncertainty, in addition to tangible costs. For instance, customers must re-visit the BC point multiple times in pursuit of a successful transaction, which implies lost wages and travel costs. Further, in situations wherein the customer’s account has been successfully debited but the transaction is unsuccessful, customers must wait until the money is automatically reversed into their account.[10]

  1. Fraudulent activity and opportunistic behavior:

Case Study [11] 1:

Illiterate and female customers in a community of migrant households in Madhya Pradesh noticed unfamiliar transactions in their bank accounts. It was found that the customer service point (CSP) operator was skimming cash from customer accounts. The customers suspected that the operator added his own fingerprint to the bank accounts as a joint accountholder for the accounts he opened. The operator would also obtain biometric authentication more than once when approached for withdrawal transactions.

Case Study 2:

A migrant laborer hailing from Uttar Pradesh and residing in Noida, wanted to apply for financial assistance of INR 55,000 as per the Kanya Vivah Sahayta Yojana under the Building and Construction Workers (BOCW) Act. She applied for the scheme through a Common Service Centre (CSC)[12]

, but the application was rejected by the Labour Department. The CSC operator suggested she approach the department directly. Upon doing so, she was asked to pay Rs. 5000 to obtain the benefit, and another Rs. 5000 after successful receipt into her bank account.

Over the past years, multiple media reports and case studies have emerged of customers being defrauded during AePS transactions. The severity of these cases may range from being disproportionately charged for AePS transactions[13], receiving only some part of the withdrawn amount, or being asked to provide biometric authentication multiple times for illegitimate transactions, to more flagrant violations such as graft, and large-scale fraud using illegally obtained biometric information. These customer experiences are not universal and may vary by the agent’s business model and/or location.

Click here to access the Part II and Part III of the series.

[1] As part of the Pradhan Mantri Garib Kalyan Yojana (PMGKY) announced by the Ministry of Finance, ex-gratia cash transfers were deployed for women Pradhan Mantri Jan Dhan Yojana (PMJDY) account holders and below poverty line (BPL) pensioners, and free ration was announced for approximately 80 crore poor citizens.

September 2021. Retrieved from

[3] World Bank (2021). The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19. Retrieved from

[4] Results from the Dvara-CMIE Survey on Access to Cash and Coping Mechanisms during COVID-19, a nationally representative survey.

[5] Reserve Bank of India. 2021.  RBI Bulletin September 2021. Retrieved from

[6] Results from the Dvara-CMIE Survey on Access to Cash and Coping Mechanisms during COVID-19, a nationally representative survey.

[7] LibTech India. 2020. Length of the Last Mile. Retrieved from’s%20experiences,%2C%20Rajasthan%2C%20and%20Andhra%20Pradesh.

[8] Economic Times. 2020. Facial recognition, iris scans may be used for welfare scheme payouts. Retrieved from

[9] Raghavan, M. 2020. Transaction Failures in the Aadhaar enabled Payment System. Retrieved from

[10] While the NPCI mandates an automatic reversal of funds into the customer’s account within T+5 days, customers may not be aware of these rules, or may not trust the BC agent.

[11] These case studies are sourced from Dvara Research’s upcoming project (Voice of Aggrieved Customers) documenting the authentic experiences of customers of digital financial services.

[12] While CSCs are not strictly business correspondents, many BCs also hold CSC licenses.

[13] While AePS transactions are supposed to be free, sometimes prices are bilaterally set between the agent and customer.

Cite this blog:


Narayan, A. (2023). An Agent Success Framework – Part I: Why agent networks must offer access to reliable Cash-in Cash-out (CICO) services? Retrieved from Dvara Research.


Narayan, Aishwarya. “An Agent Success Framework – Part I: Why agent networks must offer access to reliable Cash-in Cash-out (CICO) services?” 2023. Dvara Research.


Narayan, Aishwarya. 2023. “An Agent Success Framework – Part I: Why agent networks must offer access to reliable Cash-in Cash-out (CICO) services?” Dvara Research.


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