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"Considering the need for close supervision and mentoring of the business correspondent agents by the respective banks and in order to ensure that a range of banking services are available to the residents of such villages, ultra-small branches are being set up in all villages covered through business correspondent agents under financial inclusion," it said.
Under this model, ultra-small branches are set up on 100-200 square feet of space. The officer designated by the bank will be available on these branches on pre-determined dates. According to bankers, typically these branches are opened for two to three days in a week for few hours. The branches offer basic banking services to local villagers.
"While cash services will be offered by the business correspondent agents, the bank officer will offer other services, undertake field verification, and follow-up banking transactions. The periodicity and duration of visits can be progressively enhanced depending upon business potential in the area," the Economic Survey report said.
Apart from public sector banks, several private sector lenders have also opened ultra-small branches. "It helps the bank in promoting financial inclusion. The cost involved in setting up these branches is not high. Hence, this is now a preferred model to offer banking services in remote locations," a senior executive with a large private bank said.
