In a bid to promote financial inclusion, the Reserve Bank of India (RBI) has allowed the opening of mini branches or banking outlets across the country without taking permission from the regulator on a case by case basis.
These guidelines are applicable to all domestic scheduled commercial banks except Regional Rural Banks, reports The Economic Times.
In a new set of guidelines released recently the central bank said that banks need to open atleast 25 per cent of their banking outlets in a year in unbanked rural centres.
“Banking outlet is a fixed point service delivery unit manned by either the bank staff or its business correspondents where services of acceptance of deposits encashment of cheques withdrawal or lending of money is provided,” said the RBI.
The RBI also clarified that ATM kiosks, cash depositing counters and mobile branches will not be treated as banking outlets. They have to be left open for atleast four hours per day for five days in a week manned either by business correspondents or by bank officials.
This set of regulations come as a breather for payment banks and small finance banks who are planning to take banking to rural India mostly through small physical business correspondent touch-points.
Giving further breather for banks and small finance banks the RBI said that the first branch opened in a tier five or tier six city will be counted as a banking outlet.
In order to enhance the micro finance branches of small finance banks to banking outlets, the RBI has given a time period of three years by which they should need to extend their infrastructure with the newly released guidelines.
In an attempt to ensure that banking outlets are not mere lip service of banks towards financial inclusion the RBI has made the banks’ management board responsible for overseeing their deployment and their proper functioning.
