RBI revises norms on Rural Branches

Mumbai, June 18 (UNI) The Reserve bank today revised norms for banks to set up branches in rural unbanked sectors.

As per the revised norms, concerned Empowered Committee for Regional Rural Banks (RRBs) can decide on certain matters like ratio of Non Performing Assets (NPA), Performances of banks in preceding years and on fresh recruitments, which was earlier mandated for opening Rural branches.

RBI, in an earlier circular issued on July 11, 2006, had made it necessary for RRBs to keep their net NPA levels less than the national average and had also insisted on profit making performance in last two years.

This apart, the banks were also not permitted to resort to fresh recruitments for the new branches.

However, in the new notification issued today, the central bank has said '' With a view to encourage RRBs to open branches in hitherto uncovered districts, it has been decided that the compliance with conditions prescribed in the above circular may be left to the discretion of the concerned Empowered Committee for RRBs.'' UNI