Reserve Bank of India panel moots easing bank branch norms

An internal working group set up by the Reserve Bank of India (RBI) has proposed to relax bank branch norms by suggesting that branches, including those manned by business correspondents that provide minimum 4 hours of service for 5 days a week, be allowed to be treated as a full-service branch.

Any other fixed point service delivery unit of the bank which does not comply with the above prescription regarding minimum working period would be considered a ‘part-time banking outlet’, the panel said in its report which was made public by the central bank. The panel, according to the report, recommended that for banks to open such outlets they should meet the 25 per cent norm of opening banking outlets in un-banked rural centres. It has redefined the un-banked rural centre (URC) as a “rural (tier 5 and 6) centre that does not have a core banking solution-enabled ‘banking outlet.’

 A part-time banking outlet opened in any centre will be counted in for computing compliance with the 25 per cent branch opening norm, according to the panel. The move will significantly reduce costs for a bank while for opening branches in un-banked rural centres. According to bankers, opening full-fledged banks in such areas are not always profitable due to lower footfalls.

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