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Branch Licensing Policy - Opening of branches in unbanked rural centres


 Notice Date : 06 November 2012

RBI/2012-13/283

RPCD.CO.RRB.BC. No.43/03.05.90/2012-13

November 6, 2012

All Regional Rural Banks

Dear Sir,

Branch Licensing Policy - Opening of branches in unbanked rural centres

RRBs are an integral part of the rural credit system and are expected to play an increasingly important role in the development of rural areas. Presently, RRBs which satisfy the stipulated conditions as provided in our circulars No. RPCD.CO.RRB.BL.BC.No. 19/03.05.90/2011-12 dated August 1, 2012 and RPCD.CO.RRB.BC.No.28/03.05.90-A/2011-12 dated November 18, 2010 are permitted to open branches in Tier 2 to Tier 6 centres (population up to 99, 999 as per Census 2001) without prior permission in each case, subject to reporting. However, opening of branches in Tier 1 centres (population of 1,00,000 and above) would require prior permission of the Reserve Bank.

2. There is a need to step up the opening of branches in unbanked rural centres in order to meet the objectives of increasing banking penetration and financial inclusion rapidly. It is also vitally important to meet the targets set out for providing banking services in all villages by opening more number of brick and mortar branches in unbanked rural centres, besides the use of Business Correspondents.

3. RRBs are, therefore, advised to allocate at least 25 percent of the total number of branches proposed to be opened during a year in unbanked rural (Tier 5 and Tier 6) centres. An unbanked rural centre would mean a rural (Tier 5 and Tier 6) centre that does not have a brick and mortar structure of any scheduled commercial bank for customer based banking transactions.

4. Please acknowledge receipt to our Regional Office concerned.

Yours faithfully

(C. D. Srinivasan)

Chief General Manager

 

Guest
on 07 November 2012
Notification No : RBI/2012-13/283
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