RBI issues new branch expansion policy

The Reserve Bank of India (RBI) has linked banks' branch expansion plans to their overall mid-term corporate strategy.

According to a ciruclar issued by the central bank, the move is aimed at emphasising the developmental needs of unbanked regions and potential for growth available across the country.

For this purpose, the RBI has identified 391 under-banked districts for enabling banks to formulate their plan. The banks have been asked to formulate a detailed mid-term corporate plan for branch expansion for a three-year period with the approval of their respective boards.

The plan should cover all categories of branches/ offices having customer contact, including specialised branches, extension counters and ATMs.

It should have details of number of branches proposed to be opened in metropolitan/ urban/ semi-urban/ rural areas in each districts.

For the current year, the plan should include upgradation of extension counters to full fledged branches and conversion of specialised branches into regular branches.

The proposal for branch expansion should be submitted on an annual basis by December every year.