Village over 5,000 residents to have bank branches by Mar 2017

Reserve Bank today said every village with a population over 5,000 should have a bank branch by March 2017 and asked the SLBC's to identify such villages without a bank branch in their state.
Earlier in 2012, State Level Bankers' Committee (SLBC) Convenors were asked to prepare a roadmap to provide banking services in all unbanked villages with population less than 2,000.
For increasing bank penetration and financial inclusion, brick and mortar branches are an integral component, RBI said in a notification today, and said it has decided to focus on villages with population above 5,000 without a bank branch of a scheduled commercial bank.

"Accordingly, SLBC Convener banks are advised to identify villages with population above 5,000 without a bank branch of a scheduled commercial bank in their state.
"The opening of bank branches under this Roadmap should be completed by March 31, 2017," RBI said.
SLBC Convenor Banks may accord top priority to this roadmap and ensure completion of allotment of villages within the prescribed timelines, it added.

The identified villages may be allotted among scheduled commercial banks, including regional rural banks, for opening of branches, RBI said.
The apex bank said opening open of bank branches in such villages will also enable banks to provide quality financial services and timely support to Business Correspondent outlets.

It would help in sustaining and strengthening services provided through BCs and also ensure close supervision of BC operations, RBI said.
The SLBCs, in 2013, were further asked to review the roadmap and increase the proportion of branches for covering unbanked villages alloted to them so that about 5 per cent of the unbanked villages identified in a state were covered through branch mode.
Further, keeping in view the implementation of Pradhan Mantri Jan Dhan Yojana, SLBC Convenor banks and lead banks were advised to complete the process of providing banking services in unbanked villages with population below 2,000 by August 14, 2015.

However, RBI said that it was observed that the coverage of banking services in unbanked villages was skewed towards BC model and the ratio of branches to BC is very low.
RBI has further asked the SLBCs to submit the finalised roadmap with details of allocated villages to various banks by January 31, 2016.