Press Information Bureau

Government of India

Ministry of Finance

14-December-2012 16:29 IST

General permission has been granted by RBI to domestic Scheduled Commercial Banks (other than RRBs) to open branches in Tier 2 to Tier 6 centres (with population upto 99,999) which include rural centres; in rural, semi urban and urban centres of the North-Eastern States and Sikkim; and to open mobile branches in Tier 3 to Tier 6 Centres (with population upto 49,999) without permission from RBI in each case, subject to reporting. The New Private Sector Banks are also required to have 25% of their total number of branches in rural and semi-urban centres with population below one lakh on an on-going basis.

The Banks are also required to allocate at least 25% of the branches proposed to be opened during a year in unbanked rural Tier 5 and 6 centres.

Decision to open bank branches are taken by the banks concerned, inter-alia, keeping in view business potential, viability, profitability and availability of infrastructure.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Lok Sabha today.

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DSM/RS/bs

Branch expansion permission allows scheduled banks to open branches in smaller centres subject to reporting and rural allocation obligations. General permission is granted to domestic Scheduled Commercial Banks (excluding regional rural banks) to open branches in smaller centres and to operate mobile branches in smaller centres without prior permission, subject to reporting. New private sector banks must maintain a substantial share of branches in rural and semi urban centres, and banks must allocate a mandated portion of proposed annual branch openings to unbanked rural centres, with branch opening decisions taken by banks based on business potential and viability.