As I explained earlier, monetary easing means achieving a real interest rate that is lower than the natural rate of interest. In pursuing monetary policy in Japan, the challenges resulting from the decline in the natural interest rate had been compounded by the increasing difficulties in lowering real interest rates.
The success of the BC model is highly dependent on the kind of support provided by base branches, especially for cash management, documentation and redressal of customer grievances. Hence, it is necessary that a bricks and mortar structure is available to support about 8–10 BCs at a reasonable distance of 2–3km.