State Bank of India has signed up Reliance Money Infrastructure (RMIL), an Anil Ambani Group company, in a ‘business correspondent’ deal to source a range of banking services.

The deal was concluded on February 25 but has been made effective with retrospective effect from October 5, 2013.

SBI strategy



The deal authorises RMIL to identify borrowers; collect, process, and submit loan applications; promote credit groups; take up post-sanction monitoring, follow-up, and recovery.

As the service provider, RMIL will also collect small-value deposits; sell micro-insurance, mutual fund and pension products; and receive and deliver small-value remittances.

An industry analyst called this a mother-of-all-business-correspondent agreement, part of an SBI strategy to outsource listed services for ‘facilitating business growth.’ It is particularly significant since it comes after the latest round of issuance of banking licences in which Reliance Capital, another group company, was an applicant but failed to make the grade.

Products list



Among products the service provider will dabble in are: no-frill savings bank accounts through kiosk banking model; home loans/loans against property; auto loans; gold loans; SME loans; general purpose credit card; kisan credit card; current account; savings bank account (other than no-frill account); term deposit; recurring deposit; and mutual fund on a referral basis.

Additional products may be added by mutual consent. Products may be also amended from time to time.

The agreement binds RMIL to the Fair Practices Code for lending as also its own code for collection of dues.

In the absence of such a code, it should abide by the Indian Banks’ Association code for collection of dues and repossession of security.

The agreement specifies that it is essential that the service provider refrains from action that could damage the integrity and reputation of the bank.

It shall not resort to intimidation or harassment of any kind, either verbal or physical, against any person in debt collection efforts, including making threatening or anonymous calls or making false and misleading representations.

Performance standards



The service provider shall also adhere to performance standards in respect of services and products set by the bank, which will be entitled to inspect and audit records maintained by the service provider.

Persons authorised by the Reserve Bank of India also shall have the right to obtain copies of records and information in possession of the service provider.

The agreement shall be valid for a period of one year from its execution and shall stand automatically renewed for another year unless specifically terminated by either of the parties.