RRBs get more space for network expansion

MUMBAI: Regional rural banks (RRBs) will now have more leeway when it comes to expanding their operations.

RBI has liberalised the branch licensing norms for RRBs in keeping with annual policy statement of April ’06.

RRBs no longer need the mandatory approval of their sponsor banks for expanding their branch network.

They can seek approval directly from the regulator. RBI said on Tuesday that RRBs can now submit applications for opening new branches to respective regional offices of Nabard, with advance copies thereof to the concerned regional office of RBI.

The empowered committees for RRBs, constituted by RBI, at its regional offices would deliberate and make recommendations on applications for branch licences. RBI would take into account the EC’s recommendation and dispose of such applications swiftly. No separate approval of the sponsor bank would be required.

RBI would also consider requests from RRBs for conducting foreign exchange business, as limited authorised dealers for current account transactions, after clearance by the empowered committee.