Open 25% of new branches in unbanked areas: RBI to banks

In order to take banking to the remote and rural areas in the country, the RBI today asked all the lenders, including private ones, to open one in every four of their new branches in unbanked areas.

As an incentive, the banks will get authorisation to open an additional branch in Tier - I and II towns (population of 50,000 and above).

"...while preparing their Annual Branch Expansion Plan (ABEP), they (banks) should allocate at least 25% of the total number of branches proposed to be opened during a year in unbanked rural (Tier 5 and Tier 6) centres," the Reserve Bank said in a communication to all commercial banks.

With an aim to bringing banking services to identified 72,800 villages with population above 2,000 by March 2012, and thereafter to all the villages, the RBI said that there was a need for opening more number of brick and mortar branches in rural centres, besides the use of Business Correspondents.

The Monetary Policy Statement 2011-12 had focussed on the need to step up the opening of branches in rural areas to increase the banking access to the poor across the country under the government's financial inclusion programme.

In view of the requirement for opening at least 25% of the branches under ABEP, the RBI said it would now not be mandatory to open at least one third of the total number of branches proposed to be opened in Tier 3 to Tier 6 centres in underbanked districts of underbanked States.

"..for each branch proposed to be opened in Tier 3 to Tier 6 centres of underbanked districts of underbanked States...authorisation will be given for opening of a branch in a Tier 1 or Tier 2 centre," the RBI said.

This will be in addition to the authorisation given for branches in Tier 1 and Tier 2 centres.

Tier 5 and 6 centres mean unbanked rural areas.     

Financial inclusion, meaning all Indians in banking network, is one of the top priorities of both the Government and RBI.

A multi-media campaign 'Swabhimaan' has been launched to inform, educate and motivate people to open bank accounts.