Reserve Bank of India
FIDD.CO.LBS.BC.No. 82 /02.01.001/2015-16
December 31, 2015
The Chairman and Managing Director
SLBC Convenor Banks
Roadmap for opening brick and mortar branches in villages with population more than 5000 without a bank branch of a scheduled commercial bank
You are aware that SLBC Convenor banks were advised vide circular RPCD.CO.LBS.BC. No. 86/02.01.001/2011-12 dated June 19, 2012 to prepare a roadmap to provide banking services in all unbanked villages with population less than 2000 through a combination of business correspondents (BCs) and branches. Banks were also advised to ensure that there is a brick and mortar branch to provide support to a cluster of BC units at a reasonable distance of 3-4 kilometers. In February 2013, SLBC Convenor banks were advised to review the roadmap and increase the proportion of branches for covering the unbanked villages allotted to them such that about 5 percent of the unbanked villages identified in a State is covered through branch mode. Further, keeping in view the ongoing implementation of Pradhan Mantri Jan Dhan Yojana (PMJDY), SLBC Convenor banks and lead banks were advised vide circular FIDD.CO.LBS.BC.No. 47/02.01.001/2014-15 dated January 2, 2015 to complete the process of providing banking services in unbanked villages with population below 2000 by August 14, 2015.
2. On a review of the roadmap, it has been observed that coverage of banking services in unbanked villages is skewed towards the BC model and the ratio of branches to BC is very low. For increasing banking penetration and financial inclusion, brick and mortar branches are an integral component. Therefore, it has been decided to focus on villages with population above 5000 without a bank branch of a scheduled commercial bank. This will also enable banks to provide quality financial services and timely support to BC outlets that would help in sustaining and strengthening the services provided through BCs and also ensure close supervision of BC operations.
3. Accordingly, SLBC Convenor banks are advised to identify villages with population above 5000 without a bank branch of a scheduled commercial bank in their State. The identified villages may be allotted among scheduled commercial banks (including Regional Rural Banks) for opening of branches. The opening of bank branches under this Roadmap should be completed by March 31, 2017.
4. The finalised roadmap with details of allocated villages to various banks should be submitted to the respective Regional Office of Reserve Bank of India as per proforma in Annex “A” latest by January 31, 2016. Quarterly monitoring and review mechanism should be instituted by DCCs and SLBCs to evaluate the progress under this roadmap. The SLBC Convenor banks should arrange to furnish quarterly statement as in Annex “B” of the district-wise, bank-wise progress in opening branches starting from quarter ended March 2016 by the 15th of the following month to the respective Regional Office of Financial Inclusion and Development Department, RBI and also publish it on the respective SLBC website (s).
5. SLBC Convenor Banks may accord top priority to this roadmap and ensure completion of allotment of villages within the prescribed timelines.
6. Kindly acknowledge receipt.
Chief General Manager
Encl : as above