To promote financial inclusion and ease banking access for individual entrepreneurs, the Government of India has directed public and private sector banks to deploy Business Correspondents (BCs) to assist sole proprietors in opening and managing business bank accounts. This move, initiated by the Ministry of Finance in coordination with the Reserve Bank of India (RBI), is part of a broader push to integrate small, informal businesses into the formal financial system through simplified onboarding and doorstep services.

Under the new initiative, Business Correspondents—local banking agents trained and authorized by banks—will provide end-to-end guidance to sole proprietors in rural and semi-urban areas. Their support includes helping with Aadhaar and PAN-based KYC, filling out application forms, choosing the appropriate type of account (current vs. savings), and educating the business owners on maintaining records for GST, UPI, and digital transactions. The aim is to reduce the friction faced by first-time entrepreneurs who lack access to traditional banking infrastructure or struggle with digital processes.

Banks have been instructed to prioritize outreach to Udyam-registered businesses, self-employed artisans, street vendors, and small traders, many of whom operate with personal accounts and lack a dedicated business account. Officials noted that opening a formal business account is essential for credit eligibility, loan disbursal, tax compliance, and participation in government schemes such as MUDRA, Stand-Up India, and MSME subsidies. The initiative is expected to bring lakhs of sole proprietors into the fold of secure and traceable banking practices, further strengthening the country’s drive for financial transparency and grassroots entrepreneurship.