Branches to make way for cost-effective banking

Mumbai: RBI plans to move away from brick and mortar based branches and enable cost effec tive banking to drive financial inclusion in rural areas, pro viding a leg-up to small fi nance and payment banks to expand their branch net works easily . “We are moving away from emphasis on brick and mortar branch to fixed location where banking services are available and the idea is this will enable banks to provide cost efficient service,“ said NS Vishwanathan, deputy governor, RBI. “We believe that this will help in propping financial services measure by banking industry in general and facilitate small finance banks to do their job better."

The regulator said the final guidelines, expected later this month, will supersede existing branch licensing norms.The move brought cheer to differentiated banks which have just been licensed.Strict branch regulations were becoming a hindrance for driving financial inclusion. “We are required to submit a detailed plan to RBI for opening of branches. Further, there are regulations around rural and urban branch configuration,“ said Rishi Gupta, MD, FinoPaytech, which got approval from RBI to start payments banking operations.