RBI issues new branch expansion norms

In order to take the banking service to the remote areas of the country RBI has permitted the opening of mini branches or mini outlets in the country for all domestic scheduled banks except Regional Rural Banks (RRBs) without having to take permission from the regulator on a case by case basis.

In a fresh set of guideline released by RBI, the central bank said that banks need to open atleast  25% of their banking outlets in a year in unbanked rural areas.

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 4hours 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.