In a bid to take banking services to the remote locations of the country, the Reserve Bank of India has permitted the opening of mini branches or banking outlets accross the country for all domestic scheduled commercial banks except Regional Rural Banks without having to take permission from the regulator on a case by case basis. In a fresh set of guidelines released, the central bank said that banks need to open atleast 25% 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 has 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 4 hours per day for 5 days in a week manned either by business correspondents or by bank officials. If the space is not kept open for the minimum hours mentioned it will be considered as a part time banking outlet. 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.
The guidelines also give the scope to banks to open part time banking outlets in left wing extremism affected states and states in the north east to be counted as full-fledged banking outlets. Giving further breather for banks and small finance banks the RBI said that the first branch opened in a tier 5 or tier 6 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 3 years by which they sould need to extent 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.
Re-disseminated by The Asian Banker from The Economic Times