RBI Panel for Easing Bank Branch Norms (Download PDF)

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The Reserve Bank of India (RBI) Internal Working Group (IWG) chaired by Lily Vadera on Rationalization of Branch Authorization Policy has suggested changes in bank branch norms.The panel proposed relaxing bank branch such as building, number of employees etc. to promote financial inclusion.

Key Recommendations

  • Bank branches manned by business correspondents need to provide minimum 4 hours of service for 5 days a week to qualify as full-service branch.
  • Banks not observing minimum working period at any fixed-point unit to be measured as a ‘part-time banking outlet’. A part-time banking outlet can be released in any centre.
  • This calculation would factor into the requirement to have 25% branches in rural areas.
  • Un-banked rural centre (URC) should be redefined as a rural (tier V and VI) centre which does not have a core banking solution-enabled ‘banking outlet.’
  • This proposal (if accepted) will reduce costs for a bank when opening new branches in un-banked rural centers and in turn, boost financial inclusion by promoting outlets which give basic banking services.
  • By implementing this suggestion, Banks can use technology to offer services in far off areas.

About RBI

  • RBI stands for Reserve Bank of India.
  • Central banking organization in India.
  • Controls the financial policy around Indian rupee.
  • Founded on 1st April 1935 during the British Rule.
  • Nationalized on 1st January 1949.
  • Four headquarters are at Mumbai, Kolkata, Chennai, and New Delhi.
  • Leading member of the Alliance for Financial Inclusion.

- Published/Last Modified on: October 10, 2016

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