Andhra Pradesh: In a significant move, Bank of Baroda has committed to repaying ₹67.52 lakh to 64 Self Help Groups (SHGs) in East Godavari district, Andhra Pradesh. The repayment follows a mishandling of funds by the bank’s Business Correspondent at the G. Yerrampalem branch, M. Naani Babu, who collected deposits from these SHGs but failed to credit the money into their respective accounts. Click here to read more news related to Bank of Baroda.
The issue came to light when the SHGs reported the missing funds, prompting an investigation. According to officials, the Business Correspondent was responsible for collecting ₹67.52 lakh from the groups, but the amount never made it to their accounts.
In an official statement, District Collector P. Prasanthi confirmed that Bank of Baroda has agreed to repay the affected SHGs, with the repayment process scheduled to begin on September 16. The District Rural Development Agency (DRDA) will oversee the repayment process to ensure that the funds are properly returned to the SHGs. Click here to read more news related to Bank of Baroda.
This prompt response by Bank of Baroda is aimed at restoring the trust of the public in the Bank and ensuring that the public does not face any financial hardships due to the misconduct of the Business Correspondents.
Business Correspondents (BCs) and Accountability
Business Correspondents (BCs) play a crucial role in extending banking services to rural and remote areas, where formal bank branches are often few and far between. They are responsible for opening accounts, collecting deposits, facilitating withdrawals, and assisting with loan recovery. However, incidents like the recent case involving the Business Correspondent at Bank of Baroda’s G. Yerrampalem branch, where ₹67.52 lakh meant for Self Help Groups (SHGs) went missing, highlight the need for stricter oversight and management of BCs.
The primary concern with BCs is the lack of direct accountability compared to full-time bank employees. Since they are often hired through third-party agencies, BCs may not undergo the same rigorous background checks, training, or ethical guidelines as regular bank employees. This gap in oversight can lead to cases of misconduct, like failure to deposit customer funds, and create a significant risk for both the bank and the customers, particularly in rural areas.
The incident at G. Yerrampalem, where a BC collected ₹67.52 lakh from SHGs but failed to deposit it, underscores this issue. SHGs and other rural customers rely on these funds for critical livelihood activities, and any delay or mishandling of deposits can have a severe impact on their financial well-being. While Bank of Baroda has pledged to repay the money, the incident raises questions about the long-term safety and reliability of the BC model.
