RRBs asked to open at least 25 pc branches in unbanked areas

MUMBAI: RBI today asked regional rural banks ( RRBs) to open at least one-fourth of their proposed branches in unbanked parts of the country, a move aimed at increasing financial inclusion.

The Reserve Bank said that there is a need to step up the opening of branches in unbanked rural centres in order to meet the objectives of increasing banking penetration and financial inclusion rapidly.

"RRBs are, therefore, advised to allocate at least 25 per cent of the total number of branches proposed to be opened during a year in unbanked rural (Tier 5 and Tier 6) centres," the central bank said.

An unbanked rural centre mean a rural (Tier 5 and Tier 6) centre that does not have a brick and mortar structure of any scheduled commercial bank for customer based banking transactions.

RBI said that RRBs, which are RRBs are integral part of the rural credit system, are expected to play an increasingly important role in the development of rural areas.

RRBs can open branches in Tier 2 to Tier 6 centres (population up to 99, 999 as per Census 2001) without prior permission of the RBI.

However, opening of branches in Tier 1 centres (population of 1,00,000 and above) require prior permission of the Reserve Bank.

As per 2011 census, about 58.7 per cent households had reported availing of banking facilities. Out of the 24.69 crore households, 14.48 crore reported availing banking services. Nearly 10 crore households were not availing the services.