The Reserve Bank of India, RBI, and the finance ministry seem to have differences on the way banks should go about ensuring financial inclusion. While both the regulator and the ministry are passionate about providing banking services at low cost to the disadvantaged, a difference of opinion between the two has confused bankers. 

Recently, the finance ministry told banks that every business correspondent outlet should be converted into an ultra-small branch. So far, business correspondents - agents appointed by banks to provide banking services to the financially excluded in rural India - reached out to individuals on their own and operated from home. 

On the other hand, the RBI, in a recent circular, told banks to set up an ultra-small branch for 8-10 business correspondents operating in an area. 

While PSU banks will make significant savings by following the RBI's diktat, they cannot completely ignore the finance ministry's directive. (Economic Times)