The Reserve Bank of India (RBI) has permitted ICICI Bank to open new branches and set up off-site ATMs. This signifies the lifting of ban, imposed by the banking regulator, on branch expasion of a slew of commercial banks involved in the initial public offer (IPO) allotment scam. These banks were also penalised for their role in the scam.Sources said, HDFC Bank would also soon be allowed to open new branches. The central bank has called officials of HDFC Bank, another bank tainted in the scam, for a meeting to discuss its branch expansion plans. It had asked the bank officials to furnish details on the current state of its risk management procedures.RBI Governor Y V Reddy had last month stated that the RBI would allow these banks to open new branches once it is convinced about the improvements in their risk control systems.In a one-line statement, ICICI Bank, the country's second largest bank, said it has "received Reserve Bank of India's approval for establishing new branches and additional off-site ATMs." It, however, did not disclose the number of branches and off-site ATMs it can open.The ban on expansion was imposed following penalties imposed in January 2006 on nine banks - Bharat Overseas, Citibank, HDFC Bank, ICICI bank, Indian Overseas bank, Standard Chartered Bank, Vijaya Bank, IDBI Bank and ING Vysya Bank - for violation of RBI instructions on extending finance to retail customers for purchase of shares in initial public offers.Initially, RBI wanted to impose a three-year ban. These banks were not allowed to open new branches last calendar year. This year too they have not been permitted to open new branches. The permission to open branches will probably take effect in January. In other words, the ban continued for two years. Licences for opening new branches are given in a calendar year after the banks submit their annual plans.Banking sources said ICICI Bank has received permission to open branches in rural areas and off-site ATMs primarily in semi-urban centres.
