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Banks to expand branches in unbanked rural regions: RBI

The move is aimed to increase bank penetration and financial inclusion

May 29, 2013 11:22 IST | India Infoline News Service
The Reserve Bank of India (RBI) has asked banks to expand their branches in unbanked rural centres and draw up their next financial inclusion plan (FIP) for 2013-16.

The move is aimed to increase bank penetration and financial inclusion.

“To facilitate speedier branch expansion in unbanked rural centres for ensuring seamless roll out of the Direct Benefit Transfer / EBT (Electronic Benefit Transfer) Scheme of the government, banks are advised that they may consider front-loading (prioritising) the opening of branches in unbanked rural centres over a three-year cycle co-terminus with their FIP(2013-16),” RBI said in a notification on Tuesday.

RBI said credit will be given for the branches opened in unbanked rural centres in excess of the required 25% of the Annual Branch Expansion Plan (ABEP) for the year which will be carried forward for achieving the criteria in the subsequent ABEP/year of the FIP, it added.

At present banks are required to allocate at least 25% of the total number of branches proposed to be opened during a year in unbanked rural (Tier-V and Tier-VI) centres while preparing their ABEP.

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