Independent Research and Policy Advocacy

Uninterrupted Cash In Cash Out (CICO): An Agent Success Model

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Farmer

Abstract

Business correspondent (BC) agents are crucial last-mile infrastructure that support India’s vision for efficient, population-scale delivery of financial and other government services using Digital Public Infrastructure (DPI). These agents primarily facilitate cash deposits, cash withdrawals (together known as cash-in cash-out or CICO), and optionally facilitate access to insurance, savings products, and various welfare schemes for rural and low-income India. They bridge the gap between a digitized and futuristic vision of India, where services are instantaneously delivered digitally; and an India which is still cash-reliant and prefers face-to-face interaction.

The crucial role played by BC agents became apparent during the pandemic, as CICO agent networks facilitated emergency support withdrawals for low-income individuals nationwide. Agents provide access to a variety of financial services, though the most important among them is arguably cash deposits and withdrawals through the Aadhaar-enabled Payment System (AePS). While the idea of the BC business took birth in 2006 with RBI’s guidelines Over the past few years, the AePS system has emerged as the predominant mode of accessing one’s bank account, especially in remote and rural India. It has enabled the banking system to transform itself into a utility provider, ensuring individuals can access their funds kept in custody of their banks, conveniently and securely. Online access (as opposed to offline physical bank branch), interoperability, and the permissions to for-profit corporates to enter the BC business to manage agent networks, have been three instrumental landmarks in the growth of the business correspondent network in the country

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