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| RBI relaxes branch licensing, biz correspondent norms |
| Press Trust of India / Mumbai Oct 27, 2009, 19:05 IST |
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To increase banking penetration and promote financial inclusion, the Reserve Bank today relaxed branch opening norms for lenders while allowing more entities to work as business correspondents.
Announcing the monetary policy, RBI Governor D Subbarao said that banks can now appoint kirana, medical shop owners, agents of small savings schemes, petrol pump owners, retired teachers among others as correspondents.
This move is expected to give a push to the financial inclusion programmes in a big way by increasing the reach of business correspondents, who will act as the agents of banks.
Also, authorised functionaries of well-run self-help groups linked to banks, insurance agents and individual public call office operators are also permitted to work as BCs, Subbarao said.
Further, the central bank also relaxed norms for domestic Scheduled Commercial Banks to open branches in tier-3 to tier six centres under general permission, the RBI said.
"Permitting more categories as business correspondents will definitely enhance the efficiency of this model. Banks now have more tools to work as BCs," Bank of India Executive Director M Narendra said.
With a view to make BC model more effective, RBI said banks can collect 'reasonable' service charges from the customers to deliver services through BCs.
Relaxing the branch licensing norms, the apex bank said that banks should plan their branch expansion in such a manner that atleast one-third of such branches are in under banked areas.
Also, the RBI has advised the lead banks to constitute a sub-committee of the District Consultative Committees (DCCs) to draw a road map by March, 2010 to provide banking services through a banking outlet in every village having a population of over 2,000 by March, 2011.
The apex bank, in the policy, also observed that the role of micro-finance institutions in providing financial services to the poor is growing in importance.
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